Do market leaders lead in business process innovation? The case(s) of e-business adoption

摘要

Technological innovations in information technology poses challenges such as misalignment between demands and existing firm capabilities, technology diffusion in a market, patterns of new product introduction, market entry and exit and firm growth and survival. Prior research has focused on internal capabilities of a focal firm in adoption. This research focuses on how adjustment costs for customers may affect behavior of incumbent firms at the onset of technological change. A framework is developed to predict whether and when market leaders will pursue new information technology (IT)-based business practices, considering adjustment costs that lie both within and outside the firm. It has primarily focused how customers' existing capabilities and the requirements of new technologies affect leader choices. Three hypotheses are framed and tested on U.S. Census Bureau data on both IT use and salient organizational features for over 34,000 plants across 86 manufacturing industries. Three business process innovations are chosen namely, internet-based purchasing (e-buying), internet-based sales (e-selling) and enterprise resource planning (ERP) adoption. Results show that market share is associated with a 20% greater likelihood of adopting e-buying, 48% greater probability of adopting ERP software, despite its high internal adjustment costs and leaders were 36% less likely to adopt e-selling. The comparison of e-selling adoption across different market contexts showed that heterogeneity in this relationship. Thus it was inferred that market leaders did not resist innovating as a result of disproportionately high internal adjustment costs, but their discretion was based on misalignment between the demands of the new business technology and the capabilities possessed by their external customers. (97 refs.)