Management DecisionA multidimensional approach to the adoption of innovationJuett R. Cooper

Article information:To cite this document:Juett R. Cooper, (1998),"A multidimensional approach to the adoption of innovation", Management Decision, Vol. 36 Iss 8pp. 493 - 502Permanent link to this document:http://dx.doi.org/10.1108/00251749810232565

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Management Decision36/8 [1998] 493–502

© MCB University Press [ISSN 0025-1747]

A multidimensional approach to the adoption of innovation

Juett R. CooperAssistant Professor, Marshall University, College of Business Management andMarketing Division, Huntington, USA

A major emphasis of modernstrategic thinking involves therole innovation plays in theprofile of the organization.Academics and practitionersalike have devoted significantamounts of time and organi-zational resources for nearlyfour decades to the identifica-tion of organizational andindividual correlates of inno-vation. This work calls intoquestion the practice ofresearchers, which treatsinnovation unidimensionally,such as a process innovationor a product innovation. Amodel is presented whichencourages practitioners andacademics alike to treatinnovations as they exist,possessing multiple dimen-sions, such as product,radical and technological.

Introduction

Organizational theorists and managers alikehave long shown more of an interest in therole of innovation in organizations, primarilybecause of the crucial role innovation playsin securing sustained competitive advantage(Porter, 1980). As organizations seek to dis-tance themselves from competitors, theydevelop and/or adopt new products,processes, techniques or procedures. In pur-suit of these innovations the organizationincurs significant costs, which the firm seeksto recoup in the form of prices, fees, member-ships, and/or grants. The process is furthercomplicated because as the firm seeks toinnovate, other organizations competedirectly or indirectly by engaging in innova-tion themselves (Simon, 1997).

More than ever before it is recognized thatcompeting through innovation is not a one-time event. The firm must seek to stay out ofthe rut – innovate, concurrently. The concur-rent nature of this “innovation imperative” isa key driver in the pursuit of competitiveadvantage because managers must do morethan develop, implement or approve innova-tions; they must serve as the architects of theinnovation imperative. Consequently such,managers are compelled to help the organiza-tion develop the necessary skills and charac-teristics that precede innovation. Of course,this must all be done in a way that promotesand stabilizes performance while cultivatingan atmosphere of successful transition andadaptation in the face of a changingenvironment.

Researchers have identified a number oforganizational correlates of the adoption ofinnovation, including organizational struc-ture, market structure, institutionalizedexpectations, organizational determinants,organizational climate, and leadership(Gopalakrishnan and Damanpour, 1992).Among these, organizational structure playsa conspicuous role, explaining as much as 60per cent of the variation in the adoption ofinnovation in organizations (Kimberly andEvanisko, 1981). Even though investigatorsconcur on some of issues about innovation, adefining characteristic of innovationresearch seems to be the lack of consensus as

to which aspects of organizational structure(e.g. centralization, structure, etc.) correlatewith innovation, especially in terms of thedegree and direction of these correlations(Damanpour, 1988). Certainly the sheer com-plexity of the innovation phenomenon con-tributes in large part to the aforementionedconfusion (Van de Ven, 1986), but two keycontributors to the controversy include afailure to adequately define what is meant byinnovation, and under-specification of theinnovation model.

Practitioners and investigators often treatinnovation as an all-inclusive term, eventhough they may be referring to very differ-ent events or processes. Additionally, in muchof the literature innovation is described inunidimensional terms, referring to a newidea, process or product offering as either aprocess innovation or product innovation.When referring to the adoption of a giveninnovation or set of innovations, under-speci-fication of the innovation(s) being studiedbecomes problematic in that there can belittle or no comparison of findings acrossstudies or innovation experiences. Resolutionof the dilemmas posed by inadequate defini-tions and under-specification of the innova-tion model does not require complex calcula-tions, nor does resolution require vastresources for managers and researchers whowish to unravel the innovation mystery. Whatthey require is a common point of referenceand a theoretical framework that deals withthe complex nature of innovation.

The purpose of this paper is to advance theunderstanding of innovation by addressingthese two problems. I will first articulate theneed for clear definition of innovation amongstudents, practitioners and other stakehold-ers of organizational innovation. Pursuant tosuggestions for defining innovation inresearch and practice, I will outline the diffi-culties associated with the under-specifica-tion of innovation in practice and research. Iwill conclude with the proposition of a multi-dimensional model of innovation, which maybe used and built upon in practice andresearch.

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Juett R. CooperA multidimensional approachto the adoption of innovation

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The importance of a cleardefinition

Researchers and practitioners have definedinnovation in several different ways (Burgel-man and Sayles, 1986), at times applying theinnovation label to phenomena that involveradically different management styles andstructures (Utterback, 1994). For example, ithas been shown that organizational formsthat favor the adoption and implementationof new manufacturing processes may beimproper for the generation of new products(Kimberly and Evanisko, 1981). Even so, areview of numerous textbooks for principlesof management and strategic managementshowed that most offer little more than asingle line devoted to the definition of innova-tion, often in terms that differ significantly.Another consequence of a non-differentialapproach to defining innovation is the ten-dency to suggest one organizational formaccommodates all forms of innovation. InDrucker (1998), for instance, organic organi-zational structures generally improve inno-vation, where centralization is low, formaliza-tion is low, and firms are entrepreneurial intheir strategy. Such generalizations are toogross for such a complex phenomenon.

Innovation – process or discrete event?One of the more common debates concerningthe definition of innovation asks whetherinnovation should be regarded as a process ora discrete event. Those who see innovation asa process focus on the various stages that thepotential adopter goes through over thecourse of an innovation effort. These stagesinclude identifying problems, evaluatingalternatives, arriving at a decision, andputting innovation into use (Rogers, 1983).According to this approach, specific tasks androles of organizational participants change asthe process of innovation continues in anorganization (Burgelman and Sayles, 1986).From the process perspective, the interplaybetween events and people at each stage of theprocess influences events in subsequentstages, determining whether the adoptionprocess will continue or not. For proponentsof process definitions of innovation there areseveral issues of interest. These include therole of communication in facilitating success-ful innovation, best practices in terms ofsequencing the stages of innovation, the char-acteristics of individuals and teams in suc-cessful and unsuccessful processes, and thenature of the relationships between partiesinvolved in the innovation process (Gopalakr-ishnan and Damanpour, 1992; Rogers, 1983).

Advocates of innovation as an event do notnecessarily ignore the processes involved ininnovation. For them, however, implementa-tion of innovation occurs when there is actualacceptance of risk and the commitment ofresources occurs. From this perspective dif-ferentiation between innovators and non-innovators occurs when the innovation is putto use within the organization. Consequently,questions involving innovation often take amore macro approach. Points of interest forenthusiasts of innovation as a discrete eventinclude organizational characteristics suchas firm size or age, and conditions of theindustry that promote or impede innovation,such as market concentration or the maturityof the industry. It is the student of innovationas a discrete event that asks what types offirms are more prone to the adoption of inno-vation, or in what types of organizations willthe adoption of innovation be more successful(or unsuccessful, as the case may be).

Does specifying a process perspective ver-sus a standpoint that emphasizes a discreteevent matter? The firm that adopts a giveninnovation does so through a series of actionsthat occur over time (Rogers, 1983). It has alsobeen suggested that since firms which suc-cessfully innovate often follow the same orsimilar phases during the course of the inno-vation process, firms which omit or rejectthese phases will run the risk of a failed inno-vation attempt (Burgelman and Sayles, 1986).The firm that has chosen to adopt a giveninnovation would do well to take care in iden-tifying obstacles that may be encounteredduring the implementation process.

Those who adopt innovation share somecommon organizational characteristics, justas do those who do not adopt innovation(Leonard-Barton, 1985). Consequently, thediscrete event approach to studying innova-tion is appropriate for those seeking to differ-entiate between adopters and non-adopters ofinnovation. Others who would benefit fromthis approach include parties seeking to iden-tify potential innovation adopters such asthose selling new technologies. Thisapproach to innovation also aids those firmsthat wish to become more innovative them-selves, and seek to do so by mimicking theorganizational characteristics ofbenchmarked firms (Abrahamson, 1991). Thiswill be more likely when firms believe inno-vation adoption to be a critical success factorwithin a given market or industry.

Which perspective constitutes innovation?Both the process approach and the discreteevent perspective have merit in that adoptersmay be differentiated from non-adopterswithin a referent set of organizations. Fromthe process perspective the issue of concern

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Juett R. CooperA multidimensional approachto the adoption of innovation

Management Decision36/8 [1998] 493–502

is the adoption stage or phase of implementa-tion which ultimately spells success or fail-ure for subsequent phases of the adoption andof the innovation itself. Use of the discreteevent approach is fitting for assessing themerits of particular organizational struc-tures and business strategies in the adoptionof innovation.

Innovation defined as invention, first use,and relative to the agentAnother source of confusion in the study ofinnovation adoption deals with the scope ofbehaviors that constitute an innovation.Definitions of innovation range from treatinginnovation and invention synonymously, toregarding any idea, practice, process, or prod-uct that is new to the user organization asinnovation.

The narrowest definition of the term viewsinnovation and invention synonymously. Inthis context, both terms refer to creativeprocesses involving the application of exist-ing ideas to create a unique solution to aproblem (Duncan, 1972). In this purest senseof the word innovation occurs very infre-quently and involves very few organizations.In theory this understanding of innovationcould help identify firms that achieve sus-tained competitive advantage through radicalchange. In practice however inventor organi-zations often seek to develop new process ofoutputs as ends in themselves, choosing torefrain from commercial use of the inventionfor long periods (Utterback, 1973). It is alsowell known that many firms achievesustained competitive advantage not byinvention, but by the clever use of existingprocesses, products, or technologies, thusclouding the relationship between inventionand strategy.

A broader interpretation of innovationspecifies that the first use of an idea by agiven set of organizations with a commongoal constitutes innovation (Kimberly andEvanisko, 1981). This definition of innovationrestricts recognition of the phenomenon tofirst movers within a given industry. Otherscontend that the definition of innovationshould include success as a qualifier, arguingthat use of the term should be limited to thecommercial development of a new idea,process, or technology (Krasner, 1982).Although this approach to defining innova-tion has intuitive merit, a number of practi-cal problems arise with this approach. Infor-mation does not diffuse throughout sets oforganizations or markets simultaneously, butis influenced by spatial, economic, social andpolitical proximity to information sources ormarkets. A firm may therefore be first oramong the first in an industry to adopt or

commercialize an innovation as a matter ofluck or happenstance more than a matter ofstrategic choice (Midgley and Dowling, 1978).In addition two separate firms may adopt thesame innovation having the same motives,using the same techniques – yet only the firmthat achieves some level of economic successwould be called innovative. Classifying iden-tical, simultaneous behaviors by individualsor organizations differently based on somecontrived ex post measure of success may veilthe understanding of the underlying behav-ior.

Others share the belief that innovativenessis based on when the adopter acted relative toothers. Rogers (1983) proposed the first 2.5 percent of those within a referent group to adopta given innovation were innovators, whileMidgley and Dowling (1993) proposed that asmany as the first 29 per cent of actors thatadopt a given innovation display the attrib-utes of innovators. Thus, validating a con-trived measure of innovativeness based onthe relative time of adoption could be prob-lematic.

So what constitutes innovation? Manyrecent works on the adoption of innovationseparate the term from measures of absolutetime since the first use or introduction of theidea, practice or process. Additionally,Bigoness and Perreault (1981) provide con-vincing arguments that the adoption of asingle process, product, or technology by afirm does not equate to a tendency towardinnovativeness. They propose that it is thefirm that consistently adopts innovativeprocesses and ideas that appropriatelydemonstrates innovative tendencies.

A growing number of practitioners andresearchers define innovation as any idea,practice, or object that the adopting individ-ual or organization regards as new (Daman-pour and Evan, 1984; Damanpour, 1991). Fromthis perspective, the newness attached to aninnovation remains a matter of perception, sobeing first to adopt does not matter. This isnot to say that being the first mover within amarket or industry is not relevant, it cer-tainly is. But in this approach to understand-ing innovation the key question for the adopt-ing unit involves uncertainty associated withthe idea, process or object. Uncertainty arisesbecause the adopter has incomplete knowl-edge with which to evaluate and make judge-ments about the appropriateness of the inno-vation and the long-term consequences ofadoption (Robertson and Gatignon, 1986).

The preceding discussion of the mostprominent definitions of innovation shouldarticulate the importance of clarity in refer-ence and intent when discussing innovation.If one holds to the perspective that innovation

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is appropriate and desirable in a given situa-tion, and if it is acknowledged that innova-tion is a non-chance event that is influencedby strategic intent, managerial action, andorganizational policy, then a common under-standing of what is meant by innovation iscrucial. While I have identified the strengthsand drawbacks of some of the more promi-nent definitions of innovation, which inter-pretation of innovation researchers or practi-tioners should adopt in their instance shouldbe based on the intended outcomes of thework. My purpose has been to demonstratehow important it is to be specific when articu-lating the interpretation of innovation beingused. Simply saying innovation is not suffi-cient. Specificity in defining what is meant byinnovation is critical for establishing thevalidity of the findings, propositions, andpolicies that are consequent to any investiga-tion. By failing to define the set of organiza-tional behaviors that qualify as innovation,both the study and management of innova-tion will continue to be encumbered withconflicting and inconclusive findings.

Nohria and Gulati (1996, p. 1251) provide anexcellent example of clearly communicatingwhat they mean by innovation, noting “verybroadly to include any policy, structure,method or process, product or product oppor-tunity that the manager of the innovatingunit perceived to be new”. The care thatNohria and Gulati exercise in defining whatthey mean by innovation serves as a goodexample for others to follow. Policy makers,researchers and practicing managers maynot always agree as to the definition of inno-vation, or what innovative behavior consti-tutes. But when we take time to communicatewhat we mean by innovation, others will havean idea as to the applicability of our ideas totheir work or given situation.

Dimensions of innovation

Regardless of the definition used to identifyorganizational behaviors that constituteinnovation, practitioners and students ofinnovation widely agree that innovationcomes in many forms (Gopalakrishnan andDamanpour, 1992; Utterback, 1994). For somethe invention of the now famous Post-it Note®that began as a bookmark for a 3M engineeris the quintessential innovation. Others inthe household wood furniture industry iden-tify the application of electrostatic finishingto wood as a textbook innovation. MIS profes-sors see the use of Internet technologies fordata gathering, literature review and class-room instruction as a fundamental innova-tion. Upon closer observation, however, each

of the aforementioned innovations are verydifferent in nature. While the Post-it involvedthe end product of the company, electrostaticfinishing may never be “noticed” by the aver-age customer since it involves the productionprocess. Similarly, though the use of InternetTechnologies may be an incremental changefor MIS faculty, it may be a much more radi-cal change for English professors.

The fact that there are various types ofinnovation does not in itself merit the inter-est of managers and researchers. The rele-vance of the dimensionality issue comes fromthe interplay between variations in organiza-tional characteristics and the various types ofinnovation. Research in recent years suggeststhat structural characteristics of organiza-tions (such as centralization or size) varywith the type of innovation being adopted(such as process or product innovations)(Daft, 1978; Damanpour, 1991). In other words,the propensity for a firm to adopt innovationis not constant across all innovations. Thevarious characteristics of an organizationinteract together with the various dimen-sions an innovation possesses to determinethe probability of innovation adoption.Debate continues, however, as to what/howorganizational characteristics interplay withthe various types of innovation.

There are a number of explanations for arelationship between organization structureand innovation type, though the two mostprominent involve strategy and power. Chan-dler (1962) showed that the firm that hopes tosurvive and enjoy competitive success overtime should adopt an organizational struc-ture that matches and facilitates its strategy.In addition, his observations of the develop-ment of the multi-divisional form, with itsnew approaches to assigning authority,responsibility and communication, qualify asa type of innovation in the management coreof the firm, establishing a link between strat-egy, structure and the adoption of innovation.Porter (1980) argued that a key aspect of real-izing a low cost business strategy rests withthe firm’s ability to reduce costs throughprocess innovation, while a differentiationstrategy depends on the firm’s ability to gen-erate totally new product ideas or new combi-nations of features in existing products.While debate continues as to which organiza-tional form matches which type of innova-tion, it is clear that some of the relationshipbetween structure and innovation exists dueto a relationship between strategic intent andinnovation type.

A second reason innovation type may varywith organizational structure relates to rela-tive power within the organization. Daft’s(1978) dual core model of innovation suggests

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technological innovation flourishes in orga-nizations or their sub-units where organicstructures exist, while more mechanistic(bureaucratic) forms promote administrativeinnovation. As we will see later, administra-tive innovations include changes that affectthe policies, allocation of resources, and otherfactors associated with the social structure ofthe organization (Daft, 1978) and originatewith professional managers. Technologicalinnovations represent adoption of an ideathat directly influences the basic outputprocesses of the firm (Daft, 1978) and oftenoriginate with technical specialists, such asengineers and those trained in the hard sci-ences. Since innovation type in a generalsense is related to the professional orienta-tion of the innovator, then organizations thatare dominated by people of one orientation orthe other should be more prone to particulartypes of organizations (Cooper, 1996; Kim-berly and Evanisko, 1981; Leonard-Barton,1985).

Previous work into the adoption of innova-tion has revealed numerous dimensions ofinnovation. While others may exist, the mostprominent innovation dimensions (withregard to organizational structure) are radi-cal, incremental, product, process, adminis-trative and technological (Utterback, 1994).Research into the structural correlates ofeach dimension of innovation remainslargely inconclusive, giving rise to the ques-tion whether to treat various types of innova-tion as completely different phenomena, or asdifferent dimensions of a more complexprocess/event. I will propose that innovationexists as a multidimensional concept, andjust as failing to define terms contributes tomisunderstanding about the organizationalcorrelates of innovation, so does under-speci-fication of innovation based on its type. Previ-ous studies into the relationship betweeninnovation type and organizational structurehave dealt with each dimension alone or haveset juxtaposed seemingly opposite dimen-sions and compared them with firm struc-ture. In keeping with the literature and forpurposes of clarity, these dimensions will beset pairs (Tushman and Anderson, 1986) witha summary of findings regarding the compar-isons. These include the juxtaposition ofradical against incremental innovations,technological versus administrative innova-tions, and product versus process innova-tions

Radical versus incremental innovationThe decisive factor in traditional distinctionsbetween radical and incremental innovation isthe degree of strategic and structural changethat the firm must undergo to accommodate

the innovation in question. Incrementalchanges “enhance and extend the underlyingtechnology and thus reinforce the establishedtechnical order” (Tushman and Anderson,1986, p. 441). Radical innovations, on the otherhand, represent advances so significant thatrevolutionary alteration of the organizationand its support networks must occur toaccommodate and implement change. Asinnovations become more radical or compe-tence destroying, they entail clear, riskydepartures from existing practices.

Study of innovation along the radical andincremental dimensions has been shown tobe inconclusive and problematic. Scuilli’s(1998) study of innovation adoption in thebanking industry proposed that incrementalinnovations were associated with economiesof scale, which would favor larger firms. Still,the results of her study showed that adoptersof incremental innovations were smallerfirms with lower levels of formalization. Oth-ers, however, found incremental innovationswere more prominent in large, complex,decentralized organizations (Ettlie et al.,1984). What would explain such disparatefindings? Ettlie and his colleagues’ study ofincremental innovation included changes inboth product and process areas of the organi-zation, while Scuilli’s (1998) classification ofincremental innovation included only achange in process aspects of the firm. Thissuggests the types of innovation compared toorganizational structure in the two studieswere not entirely representative of oneanother, because only one dimension of inno-vation was correlated with organizationalstructure. Scuilli also assessed the relation-ship between investment banking, what shetermed a product innovation, and organiza-tional structure. While investment banking isa product innovation, in the banking indus-try at the time of her study it was also anincremental innovation. When correlatingthe organizational form and incremental-product innovation in the Scuilli (1998) study,it matches well with the organizational formof the adopter of incremental-product innova-tion in the Ettlie et al. (1984) study. If innova-tion is multidimensional in nature, and asproposed here, all of the dimensions of eachinnovation should be considered when tryingto ascertain the organizational form thatfacilitates innovation. Doing so helps resolvethe findings of Scuilli and Ettlie et al..

Other explanations may also account forthe inconsistency in findings about the rela-tionship between structure and incrementalinnovation. Since the adoption of incremen-tal innovations may not require a significantalteration in firm strategy (Whipp and Clark,1985), alterations in firm structure may not be

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necessary in a strict sense. This wouldexplain the relative absence of publishedwork that deals extensively with the relation-ship between organizational structure andincremental innovation.

The adoption of radical innovation hasbeen shown to relate significantly to a num-ber of organizational characteristics. But aswith incremental innovation, the availableattempts to correlate firm structure and theadoption of radical innovation fail to recog-nize the complexity of the construct. Forexample, some have argued that highly cen-tralized organizations that have low formal-ization are more apt to adopt radical innova-tions (Ettlie et al., 1984), while others proposethat it is the firm that is low in centralizationthat is conducive to radical innovation adop-tion (Scuilli, 1998). Some suggest firm sizecorrelates negatively with the adoption ofradical innovation because of difficulty inconnecting the necessary processes,resources and strategies that must accom-pany the event (Dougherty and Hardy, 1996).Other proponents of the small firm approachto radical innovation maintain that it is thesmall firm which possesses the entrepreneur-ial culture needed to grasp the market oppor-tunities that lie outside the firm’s boundaries(Rothwell, 1983). Different studies favor radi-cal innovation adoption by the large firm,where organizational resources are moreavailable (Scuilli, 1998). As with incrementalinnovation, a more detailed analysis of theresearch on radical innovation suggests thatdisparate findings could be the consequenceof other intervening innovation dimensions.When adding product-process dimensions tothe radical innovation studies, there seems tobe more consistency among studies that havefocused on radical product innovations, whilefirms that adopt radical process innovationsalso show similar structural configurations.

Technological versus administrativeinnovationThe distinction between technological andadministrative innovation involves the prox-imity of the change in relation to the organi-zation’s operating core. Technological inno-vation involves the adoption of an idea thatdirectly influences the basic outputprocesses, while administrative innovationsinclude changes that affect the policies, allo-cation of resources, and other factors associ-ated with the social structure of the organiza-tion (Daft, 1978). Numerous researchers havestudied the correlation between organiza-tional characteristics and the adoption oftechnological innovation. Still, results involv-ing the direction and degree of correlationbetween organizational characteristics and

technological innovation adoption varywidely. The inconsistency in many of thesefindings is due in large part to the fact thatchanges termed as technological innovationinclude both product innovations and processinnovations (Damanpour, 1987). This is prob-lematic since firms adopting process innova-tions often pursue different strategies (Porter,1980) and consequently different organiza-tional structures (Utterback, 1994) than thoseadopting product innovations. In addition, ithas been shown that technological innova-tion can be separated according to radicaland incremental dimensions (Lawless andAnderson, 1986). Thus, while recognition ofthe technological dimension of innovation isrelevant and necessary, it is not sufficient initself to reconcile the disparate understand-ing of innovation adoption in organizations.

The correlation between organizationalstructure and administrative innovation hasalso been problematic, both in terms of con-sistency and significance of results. As withtechnological innovations, it has been sug-gested that the administrative innovation beintegrated with the radical and incrementaldimensions of innovation (Damanpour, 1988),which may explain why a number of studieshave failed to record significance in correla-tions between administrative innovation andstructural variables (Kimberly and Evanisko,1981; Damanpour, 1987). Again the evidencesuggests that thinking in terms of adminis-trative innovation alone under-specifies theevent, suggesting a more robust approach tostudying and managing innovation is inorder.

Studying the adoption from solely anadministrative or technological perspectiveis also complicated by the possibility of areciprocal relationship between administra-tive innovation and technological innovation(Damanpour et al., 1989). There is evidencethat in the organizational change processadministrative innovation may lead to tech-nological innovation in some instances, whilethe reverse is true in other instances. Thesole use of administrative and technologicaldimensions in the assessment of innovation/organizational fit therefore falls shortbecause of the potential attachment of the twodimensions over time, as well as failure ofeither dimension to fully partition the con-cept into its contingent types.

Product versus process innovationAs noted above, product innovation reflectschange in the end product or service offeredby the organization, while process innovationrepresents changes in the way firms produceend products or services (Utterback, 1994).Firm strategy and organizational structure

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has been linked to both product innovation(Parthasarthy and Sethi, 1992) and processinnovation (Dess and Davis, 1984). In addi-tion, both process and product innovationhave been shown to be potentially significantsources of strategic advantage.

Product innovations have been linked toentrepreneurial organizational forms andleadership styles (Miller and Friesen, 1982),but the organizational correlates of productinnovation in service firms often contradictthe correlates of product innovation in goodsproducing firms. It must also be kept in mindthat product innovation may represent noth-ing more than an organization’s response toneeds of outside firms. For example, the adop-tion of electronic data interchange (EDI) as atype of product innovation is often inresponse to demands of important customers(Cooper et al., 1997). In the banking industryand health care, for example, the federal gov-ernment often imposes EDI as a new producton firms that have no choice but to comply.This may shed light into the inconsistency ofthe relationship between organizationalstructure and product innovation. Scuilli(1998) found that large, complex, participativefirms adopt product innovation, while Roth-well’s (1983) research favored small firms interms of product innovation, as did Doughertyand Hardy (1996). In these instances the adop-tion of the innovation may represent a changenot so much in strategy or structure in theadopting firm as in the client that calls for thechange. Thus, a multidimensional model ofinnovation appears in order to resolve theuncertainties associated with product innova-tion and organizational structure.

As is the case with the other dimensions ofinnovation the relationship between processinnovation and organizational structure isuncertain. Scuilli (1998) found that in thebanking industry it was the small firm thatwas more apt to adopt process innovation,while Damanpour and Evan (1984) proposedthat large firms are more likely to adopt inno-vation. Process innovation historicallyseemed to favor the large, bureaucratic firm(Porter, 1980), operating in mature marketswith high organizational slack. Since smallorganizations tend to utilize fewer inputmaterials, the social and economic costs ofinnovations that apply to small proportionsof these materials may exceed the benefitsthat these innovations yield. In larger firms,however, even processes that contribute asmall proportion of a firm’s output may jus-tify the adoption of innovations on the basisof economies of scale or through the produc-tion critical masses at which innovationbecomes efficient. However, changes in theapproach to strategy and the adoption of

recent technologies and techniques such asflexible manufacturing and total qualitymanagement, management information sys-tems, EDI would seem to challenge this wis-dom (Cooper et al., 1997; Parthasarthy andSethi, 1992). As computer technologyadvances, the cost of systems and softwaredecline and technological sophistication ofthe workforce improves, no longer are adapta-tions reserved for the technologically élite,opening the doors for process innovation inthe small firm.

Taken together, the body of evidence sug-gests traditional approaches to the study andmanagement of innovation adoption fail toanswer persisting questions of researchersand practitioners alike. The abandonment ofthis area of investigation is far from war-ranted. Instead, it would seem that someanswers to prevailing questions depend ontreating innovation adoption as a multi-dimensional issue.

A multidimensional approach

As the foregoing discussion demonstrates,much of the misunderstanding and conflictsurrounding innovation adoption is owed to along-standing unidimensional concept of inno-vation. If innovations were either/or in termsof their dimensionality, as some have proposed,extant models of innovation adoption andmanagement would be sufficient in most situa-tions. However as I have shown, few innova-tions appear to be uni- or even bi-dimensionalin nature. When a firm adopts a new techniquefor assembling a given product, it has a techno-logical dimension, since it directly influencesthe basic output processes of the organization(Daft, 1978). The same innovation also consti-tutes a process innovation, since the firm usesthis technique in the production of an endproduct (Zaltman et al., 1973). This innovationmust also be assessed in terms ofradical/incremental dimensions based on theextent to which it departs from existing tech-niques within the firm (Ettlie et al., 1984).

As noted earlier, the advent of technologiessuch as EDI has resulted in the reality ofinnovations that possess both administrativeand product dimensions (as well as beingeither radical or incremental). Previous totechnological developments such as these,administrative-product innovations werethought by many to be a managerial unicorn– interesting to think about but unrealistic ina tangible sense. Organizations frequentlyuse Internet technologies and communica-tion by way of the World Wide Web toadvertise, distribute and/or service theirproducts in an attempt either to gain

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competitive advantage or to keep pace withcompetitors. The use of these technologiesconstitutes administrative-product innova-tion because they mean alteration of the prod-uct/service offered as well as alterations inorganizational power, procedure or structure.(The degree to which these technologies aug-ment or replace existing processes deter-mines whether they would be radical orincremental.)

Researchers and managers have tried vari-ous approaches to clarifying the relationshipbetween organizational characteristics andthe adoption of innovation in the face of mul-tiple dimensions of innovation. Hitt et al.(1996, p. 1096) combined the acquisition ofprocess innovations with the adoption ofproduct innovations and market innovationsinto a single variable termed external innova-tion. When using this approach, Hitt et al.(1996) found no significant relationshipbetween firm size and the adoption of exter-nal innovation. Notwithstanding, others havefound a significant relationship between firmsize and product innovation (Rothwell, 1983),as has also been demonstrated betweenprocess innovation and firm size (Cohn andTuryn, 1980). This would suggest that simplycombining various dimensions into one typefails to accommodate varying strategic moti-vations behind different combinations ofinnovation dimensions (Schroeder, 1990).

Another way of dealing with the multipledimensions of innovation has been to notdifferentiate between the various types ofinnovation at all – innovation is just innova-tion. When Nohria and Gulati (1996) tooksuch an approach, innovation did not corre-late significantly with centralization, yetcentralization was found to correlate signifi-cantly and negatively with process innova-tion by Cohn and Turyn (1980). The methodemployed by Nohria and Gulati may identifythe most gross organizational relations toinnovation in general, but it fails to giveproper credence to the role that innovationtype plays in determining the successfuladoption of innovation in organizations(Miller and Friesen, 1982; Tornatzky andKlein, 1982).

The preponderance of evidence suggeststhat it is most appropriate and beneficial totreat innovation as a phenomenon that con-sists of multiple dimensions at the same time.The model presented here (Figure 1) providesa multidimensional framework for thinkingabout and evaluating the relationshipbetween organizational characteristics andthe adoption of innovation. Though similar inconcept to Damanpour (1988), this model goesfurther by not only adding the product andprocess dimensions of innovation, butproviding for the simultaneous yet separate

consideration of the various dimensions oninnovation. The model suggests that strategicapproaches to the adoption of innovationmust at a minimum consider innovation interms of the three major dichotomies pre-sented above: product versus process, radicalversus incremental, and technological versusadministrative.

This model also proposes more than simplycombining innovation types into a singletype, as do Hitt et al. (1996). The approachsuggests that various dimensions are rele-vant, but only as they relate in total to theother dimensions that exist for a given inno-vation. The result is an approach in which agiven innovation is considered to exist inmultidimensional space. This model is notintended to emphasize the absoluteness ofthese dimensions alone, but is intended toserve as a springboard from which thesedimensions of innovation can be added to andamended as appropriate. As interest in andemphasis of the adoption of innovation con-tinues, the identification of new dimensionsto innovation will be identified. As thesedimensions come forth, the scope of themodel may be expanded.

The model also suggests that innovationsare not so much either/or, but that a giveninnovation possesses the characteristics ofvarious innovation types at the same time.Such an approach to thinking about innova-tion is much more reasonable than in pastyears. Historically, administrative innova-tions could not be product or process innature, since these were both sub-sets of tech-nological innovation. The use of innovationssuch as TQM (which is considered adminis-trative in nature) in advertising and productdifferentiation (such as Ford Motor Com-pany’s “Quality is Job One”) means firmsmust consider innovations in a broadercontext than before. Similarly advances inmanagement such as just-in-time inventory (aprocess innovation) results in changes in

Product

Process

Administrative Technological

Incremental

Radical

Figure 1A multidimensional model of innovation

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power and social structures within the firm,which has historically been the domain ofadministrative innovation. A multidimen-sional model of innovation means that bydefining innovations more narrowly in termsof the attribute combinations they possess (e.g.process-administrative-radical), researchersshould be more successful in describing rela-tionships between organizational variablesand the adoption of innovation.

Conclusions

The questions here will be answered in wholeor in part through extensive research. Theauthor is currently concluding a study aimedat involving the appropriateness and value ofa multidimensional approach to the study ofinnovation adoption. A valid critique of themultidimensional approach to the study andmanagement of innovation involves the num-ber of possible dimensions a given innovationor set of innovations may hold. Other dimen-sions of innovation may exist that are notdescribed here. Still, the pursuit of parsimonyand the preponderance of extant researchsuggest the dimensions described here appearto be most relevant in the adoption process.

A number of questions emerge from theissues discussed in this paper. The first andforemost relates to the relative importance ofthe dimensions of innovation. Does the degreeto which an innovation is radical or incre-mental overshadow other dimensions of inno-vation in determining the appropriateness ofan innovation (Damanpour, 1988)? If central-ization facilitates the adoption of radical inno-vation, does that outweigh the need for decen-tralization in the adoption of process dimen-sion? Furthermore what is the interplay oforganizational strategy? For example, if afirm is a low cost producer, will that elevatethe product-process dimension to primacy?

The ideas forwarded in this work and thequestions to which they will give rise promiseto play a relevant role in the advancement ofnew knowledge about the adoption of innova-tion. Although this work has focused on therelationship between innovation type andorganizational structure, the influence of themultidimensional innovation perspective onthe adoption process is an area of interest.The need for and characteristics of championsof innovation would quite possibly differ for aradical-technologic-process innovation thanin the case of a radical-process-administrativeinnovation. A multidimensional approach toinnovation is relevant and important to thepracticing manager, who may build or losesustained competitive advantage based onhis/her ability to turn a recipe for innovationadoption into a finished fit with the

organization. As has been the case with pre-ceding innovation typologies, the appropriate-ness of this model in the arsenal of manage-ment practice and research will only be ascer-tained with further research and dialogue.

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Application questions

1 Does an emphasis on quality andefficiency in organizations tend to leadtowards innovation in efficiency alone – arefinement of current thought andpractice rather than new ideas?

2 Think of one or more innovative peopleyou have worked with. What was their

contribution to the organization? Was it allit could be?

3 Is true innovation something which existsoutside organizational life in terms oftheorists and authors (process innovation)and licencing or reverse-engineering(product innovation)?

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