Strategic Decisions of New Technology Adoption under Asymmetric Information: A Game‐Theoretic Model*

In this paper we explore strategic decision making in new technology adoption by using economic analysis. We show how asymmetric information affects firms' decisions to adopt the technology. We do so in a two‐stage game‐theoretic model where the first‐stage investment results in the acquisition of a new technology that, in the second stage, may give the firm a competitive advantage in the product market. We compare two information structures under which two competing firms have asymmetric information about the future performance (i.e., postadoption costs) of the new technology. We find that equilibrium strategies under asymmetric information are quite different from those under symmetric information. Information asymmetry leads to different incentives and strategic behaviors in the technology adoption game. In contrast to conventional wisdom, our model shows that market uncertainty may actually induce firms to act more aggressively under certain conditions. We also show that having better information is not always a good thing. These results illustrate a key departure from established decision theory.     

The Role of Interorganizational and Organizational Factors on the Decision Mode for Adoption of Interorganizational Systems*

The dramatic growth of interorganizational systems (IOS) has changed the way organizations conduct their business, and has resulted in significant tangible and intangible benefits being realized by participating firms. However, the implementation of these IOS requires the cooperation and commitment of all the participating members. These members may have complex economic and business relationships among themselves that can result in a number of social, political, and economic factors influencing the adoption and implementation of IOS. This study examines the role of interorganizational and organizational factors on the decision mode for adoption of IOS, in the specific context of electronic data interchange (EDI). Four interorganizational factors, based on the socio-political framework derived from research in marketing, and five organizational factors based on research in IS were used in the study. The data for the study were collected through a large scale field survey. Two respondents, the sales/purchase manager and the IS manager, from 201 firms responded to the survey. The results of discriminant analysis of the data reveal that two interorganizational variables, competitive pressure and exercised power, and two organizational variables, internal need and top management support, are important variables to differentiate firms with proactive decision mode from firms with reactive decision mode. The study also evaluates the differences between proactive and reactive firms on three implementation outcomes. Proactive firms are found to have greater extent of adaptation, more external connectivity with trading partners, and better integration of EDI information in their internal IS applications.     

Discretionary Use of Computers: An Empirically Derived Explanatory Model*

This study identifies variables that explain variations in computer use. Factor analysis of data gathered from 422 business administration faculty reveal eight themes among the independent variables. Seven of these factors significantly discriminate among non, minimal, and high users. These results suggest an empirical model for future studies and provide policy insights for decision makers seeking to stimulate computer usage. Additionally, the study shows that there is much commonality between the previously separate organizational innovation and information systems implementation streams. It also demonstrates that motivation theory may be a valid framework within which to study computer use.     

An Empirical Investigation into Factors Relating to the Adoption of Executive Information Systems: An Analysis of EIS for Collaboration and Decision Support*

This study focuses on the organizational adoption of Executive Information Systems (EIS). A distinction is made between two related, complementary EIS capabilities—EIS for collaboration support (EIS_c) and EIS for decision support (EIS_d). EIS_c is relatively standardized and replicable, while EIS_d has to be developed in situ given the specific characteristics of the user and task. The adoption process is conceptualized as an initial transition from a state of nonadoption to adoption (adoption status) and subsequent internal propagation of the technology (adoption level). Data collected from a national survey are used to test hypotheses between identified contextual variables and the adoption status and adoption level of EIS_c and EIS_d. Adopters and nonadopters of both EIS_c and EIS_d do not differ in their organization size, suggesting that the traditional paradigm of “EIS as a technology for large firms” is no longer true. Environmental uncertainty is found to promote the transition from a state of nonadoption to adoption of both EIS_c and EIS_d while continuing to catalyze the internal propagation of EIS_d. While no differences are observed in IS department size between adopters and nonadopters of EIS_c, our results suggest that larger IS departments provide the resource base to explore the less standardized of the two capabilities, EIS_d. IS support is also found to be critical for the subsequent internal propagation of EIS_d. Furthermore, the adoption level of both EIS_c and EIS_d are found to be promoted by top management support. Implications of these results are discussed for the organizational adoption of EIS.     

An Empirical Test of the Strategic-Grid Model of Information Systems Planning*

Contingency models of information systems planning predict that no single planning approach will suit all organizations' needs. Little empirical research has been undertaken, however, to evaluate this prediction. Accordingly, we used McFarlan, McKenney, and Pyburn's (1983) strategic-grid model to study the information systems planning problems encountered by 49 governmental agencies. Twenty-seven agencies were required to follow a planning approach best suited to organizations that had a high level of dependence on both their existing and proposed systems. We predicted that agencies not having these characteristics would encounter the most problems with the approach. The remaining 22 agencies could choose their own planning approach. We studied this latter group to determine whether the problems encountered by the first group could be attributed to the mandated approach. Overall, the empirical results obtained were equivocal. Some results indicated that more planning problems were encountered by agencies in which the mandated approach was not appropriate to their position in the strategic grid. Other results were not supportive of this proposition. More work needs to be undertaken, therefore, to evaluate the predictive and explanatory power of contingency models of information systems planning. In addition, our research indicates a need to develop more rigorous theories of information systems planning behaviors, to improve the instruments needed to measure these behaviors, to explore the relationship between information systems planning behaviours and organizational effectiveness, to investigate how organizational learning impacts planning behaviors, and to determine the types of information systems planning problems that diffuse through organizations and those that remain localized.     

The Industry-Level Impact of Information Technology: An Empirical Analysis of Three Industries*

As noted by several observers, information technology (IT) has rapidly evolved from “part of the organizational overhead” into a strategic resource capable of changing patterns of competition within industries [8, p. 275]. However, while this evolution has become part of the fabric for literature exploring the strategic impact of IT, very few studies have been undertaken to determine the specific influence(s) of technology-based competition on industry structure. The development of analytical frames for capturing aspects of industry behavior provides a potentially powerful tool for evaluating the influence strategic IT initiatives may have on current bases of competition. Drawing from the theoretical disciplines of industrial economics and strategic management, this study develops a framework for analyzing longitudinal changes in industry structure. Working within this frame, the study then analyzes the nature and change of structure in three industries during and after the introduction of strategic information technology. The findings suggest that in each of these industries structural characteristics were dramatically altered subsequent to the introduction of competitive-based IT. In two of the industries (airlines and industrial chemicals), early adopters broke away from other industry participants, in effect, forming unique bases of competition. In the remaining industry (drug wholesalers), previously distinct bases of competition consolidated, resulting in a more competitive industry structure than that which existed prior to the technological innovation.     

A Framework for Examining the Interface between Operations and Information Systems: Implications for Research in the New Millennium*

Even though much research has been published in operations and information systems, both functional areas find their roots in other disciplines. While operations management evolved from operations research in the 1960s, the field of information systems is of more recent vintage and traces its original roots to computer science. Both disciplines now naturally have come closer together as information and process-technology-based changes force manufacturing firms to become more efficient and customer focused. Market and technology-driven e-commerce initiatives that are likely to dominate business strategies in the future cannot be successfully achieved without a successful integration of operations and information systems. In this paper, we present a unifying framework that can be used to better understand the management of the functional interface between operations and information systems. We also categorize and highlight the contributions of the articles that appear in this special research focus issue. Finally, research directions that emerge from our understanding of this interface are outlined in an effort to stimulate further thinking and research that can advance our knowledge of this interface area.     

Critical Success Factors for Strategic Alliances in the Information Technology Industry: An Empirical Study*

Intense competition in the marketplace is forcing organizations to examine different ways by which they could enhance or retain their competitive edge. Strategic alliance is one such option through which an organization can leverage its resources to emerge as an effective competitor. Such alliances are burgeoning in the information technology industry, which is characterized by rapid change and short innovation cycles. Successful management of alliances has proved to be very elusive for the most part, and there is a lack of theoretical and empirical work in this area. Literature on critical factors was synthesized, and then a parsimonious set of critical factors was identified using a combination of interview and survey methodologies. Our study has implications for both practice and future research.     

Swiftness and Intensity of Administrative Innovation Adoption: An Empirical Study of TQM in Information Systems

Considerable attention has been directed toward developing a more complete understanding of innovation adoption by Information Systems (IS) departments. Much of this research has focused on the adoption of technological innovations, and limited research has focused on the adoption of administrative innovations. This paper focuses on an administrative innovation that is increasingly becoming popular among IS departments, namely Total Quality Management (TQM) in systems development. A synthesis of the IS innovation and TQM literatures was conducted to identify environmental, organizational, and task‐related factors that should relate to both the swiftness and the intensity of TQM adoption. The relationships between the identified variables and TQM adoption were examined using data collected from 123 IS departments in Fortune 1000 firms and large government agencies in the U.S. The results indicate that TQM adoption in systems development is influenced by the host organization's quality orientation and factors internal to the IS department including IS management support for quality, the presence of a separate quality assurance function, and the structural complexity of the IS department. Implications of this study for theory, future research, and practice are discussed.     

Information Technology Acceptance by Individual Professionals: A Model Comparison Approach*

The proliferation of innovative and exciting information technology applications that target individual “professionals” has made the examination or re‐examination of existing technology acceptance theories and models in a “professional” setting increasingly important. The current research represents a conceptual replication of several previous model comparison studies. The particular models under investigation are the Technology Acceptance Model (TAM), the Theory of Planned Behavior (TPB), and a decomposed TPB model, potentially adequate in the targeted healthcare professional setting. These models are empirically examined and compared, using the responses to a survey on telemedicine technology acceptance collected from more than 400 physicians practicing in public tertiary hospitals in Hong Kong. Results of the study highlight several plausible limitations of TAM and TPB in explaining or predicting technology acceptance by individual professionals. In addition, findings from the study also suggest that instruments that have been developed and repeatedly tested in previous studies involving end users and business managers in ordinary business settings may not be equally valid in a professional setting. Several implications for technology acceptance/adoption research and technology management practices are discussed.     

The Information Problems in Organizations: A Research Model for the Value of Information and Information Systems*

Growing recognition of the need for better management information system (MIS) theory and practice centers around problems with identifying the value of information and information systems in organizations. This paper addresses this issue by showing that existing theory in organizational economics and industrial organization directly relates to information problems in organizations (their nature, and their effects in terms of organization structure and performance). The paper categorizes these problems and associated theories into four distinct classes and shows that MIS research and practice can be mapped to information problems of each type. Because the economic theory pertinent to specific information problems includes the nature of the organizational response to information constraints, it also provides insight into the nature of the improvement to be realized if information constraints can be overcome. These improvements can then be interpreted as the value of the associated information systems which suggests using the resultant classification scheme to map between information problems and system value. The paper shows that this methodology provides a more appropriate level of focus than either traditional normative or business value methods, especially because many improvements have structural as well as performance consequences.     

The Determinants of DSS Success: An Integrated Model*

The results of a field study investigating the determinants of decision support systems (DSS) success are presented. A multivariate model was developed and tested using multiple regression hierarchical analysis on responses from 118 DSS users. Several specific hypotheses are also proposed and tested. Data analyses indicate that DSS success, as measured by DSS satisfaction and perceived benefits, depends on several factors: previous user experience with DSS, user involvement, user training, top management support, information sources, the level of managerial activity, and task structure, difficulty and interdependence. Based on the research results, several suggestions are made to improve the likelihood of successful DSS implementation.     

Information Systems Adaptation and the Successful Implementation of Advanced Manufacturing Technologies*

Few plants have initial success with advanced manufacturing technologies (AMTs), and adaptations are commonly required after installing new technologies. We especially know little about the outcomes of adaptations that manufacturers regularly employ in the context of AMTs. Sociotechnical theory and the technology literature suggest that AMTs commonly require four types of adaptations including those to process technologies, human resources, operational structures, and information systems. This study investigates which of these four adaptations and their interactions lead to improved operational performance. Data were collected on 104 plants that implemented a single type of manufacturing AMT. Findings indicate that information systems (IS) adaptation during the course of AMT implementation was the most important action. Surprisingly, human resource and process technology adaptations were linked to lower performance, and no interactions had any clear effects. The results also show that practitioners underestimated the relevance of IS adaptations during contemporary or “second-generation” AMT implementation projects and overemphasized the need for shop floor changes.     

An Exploratory Analysis of the Value of the Skills of IT Personnel: Their Relationship to IS Infrastructure and Competitive Advantage

Determining and assessing the requisite skills of information technology (IT) personnel have become critical as the value of IT has risen in modern organizations. In addition to technical skills traditionally expected of IT personnel, softer skills like managerial, business, and interpersonal skills have been increasingly cited in previous studies as mandatory for these employees. This paper uses a typology of IT personnel skills—technology management skills, business functional skills, interpersonal skills, and technical skills—and investigates their relationships to two information systems (IS) success variables, IS infrastructure flexibility and the competitive advantage provided by IS. The study investigates these relationships using the perceptions of chief information officers (CIOs) from mostly Fortune 2000 companies. The contributions of this study are: IT personnel skills do affect IS success, technical skills are viewed as the most important skill set in affecting IS infrastructure flexibility and competitive advantage, and modularity is viewed as more valuable to competitive advantage than integration. Several explanations are offered for the lack of positive relationships between the softer IT personnel skills and the dimensions of IS success used in this study.     

Construct Measurement in Information Systems Research: An Illustration in Strategic Systems

This study seeks to highlight construct measurement issues in information systems (IS) research. It describes the normative process of construct measurement and identifies the difficult problems involved in measurement and some ways in which these difficulties may be overcome. An illustrative construct-operationalization study in the area of strategic systems outlines how the normative guidelines may be applied to IS. Some specific recommendations for IS include developing a preliminary model of the construct even if there is little previous measurement research, devoting greater attention to predictive validity because a lack of theories in IS precludes the examination of nomological validity, verifying the assumptions underlying the computation of an overall index, and examining the measurement properties of the index.     

An Integrative Framework of the Information Systems Development Process*

Despite more than 25 years of research on the processes and outcomes of information systems development in organizations, deficiencies exist in our knowledge about the effective management of complex systems development processes. Although individual studies have generated a wealth of findings, there is a need for a cumulative framework that facilitates interpretation of what has been learned and what needs to be learned about the process of information systems development. This paper reviews prior research on ISD processes and identifies the different types of contributions that have been made to our growing knowledge. More important, it generates a cumulative framework for understanding the process of ISD that could provide a valuable template for future research and practice.     

Intermediate Performance Impacts of Advanced Manufacturing Technology Systems: An Empirical Investigation*

A large-scale random sample is used to empirically examine the relationships between implementation of Advanced Manufacturing Technology (AMT) and three organization-level measures that have historically been attributed to AMT, but not fully tested along the AMT spectrum: market-oriented flexibility of the production process, organizational integration of production processes, and administrative intensity of the organization. Results indicate that as an organization moves along the technology scale from stand-alone AMT (e.g., CNC machines) through functionally oriented AMT (FMS and CAM) toward CIM, not only do its production processes become more integrated with each other, but those processes become more integrated with other functional systems of the organization, and the quality and timeliness of production information increase. Furthermore, this relationship becomes stronger as companies increase their level of implementation for the latter two technologies. Conversely, market-oriented flexibility decreases and administrative intensity is not observed to change as companies move along the technology spectrum. Future research should examine how organizational redesign and implementation strategies that accompany AMT implementation can concomitantly enhance organizational integration of the production process and market-oriented flexibility.     

Task-Structure Relationship of Information Systems Development Subunit: A Congruence Perspective*

Several studies have examined the influence of organizational context (e.g., organization size, environment, strategy) on information systems (IS) performance/success. But very few studies have examined IS structure, and those studies have focused on a particular element of IS structure (e.g., decentralization). Thus, the multidimensional structural configuration of IS as an organizational subunit has escaped research attention. Further, the nature of the task to be performed by the IS subunit as a contextual factor has been virtually ignored in the IS research literature. In this paper, we first develop a congruence model for the task-structure relationship in an information systems development (ISD) subunit setting. Then we test this model as a multivariate relationship followed by subordinate bivariate analyses. Analysis of data from 41 hospitals’ ISD subunits reveals that a congruence relationship between task context and the structure of an ISD subunit is present. Our findings also show that an exclusive association exists between uncertainty in the task environment and the decision-making structure. Likewise, the association between equivocality of task content and the control structure of the ISD subunit is also exclusive. Implications of these findings for decision makers and researchers are discussed.     

Examining the Impact of Interorganizational Systems on Process Efficiency and Sourcing Leverage in Buyer–Supplier Dyads

Manufacturing firms are increasingly seeking cost and other competitive advantages by tightly coupling and managing their relationship with suppliers. Among other mechanisms, interorganizational systems (IOS) that facilitate boundary‐spanning activities of a firm enable them to effectively manage different types of buyer–supplier relationships. This study integrates literature from the operations and information systems fields to create a joint perspective in understanding the linkages between the nature of the IOS, buyer–supplier relationships, and manufacturing performance at the dyadic level. External integration, breadth, and initiation are used to capture IOS functionality, and their effect on process efficiency and sourcing leverage is examined. The study also explores the differences in how manufacturing firms use IOS when operating under varying levels of competitive intensity and product standardization. In order to test the research models and related hypothesis, empirical data on buyer–supplier dyads is collected from manufacturing firms. The results show that only higher levels of external integration that go beyond simple procurement systems, as well as who initiates the IOS, allow manufacturing firms to enhance process efficiency. In contrast, IOS breadth and IOS initiation enable manufacturing firms to enhance sourcing leverage over their suppliers. In addition, firms making standardized products in highly competitive environments tend to achieve higher process efficiencies and have higher levels of external integration. The study shows how specific IOS decisions allow manufacturing firms to better manage their dependence on the supplier for resources and thereby select system functionalities that are consistent with their own operating environments and the desired supply chain design.     

Adoption of the mobile Internet: An empirical study of multimedia message service (MMS)

Multimedia message service (MMS) provides more multimedia communication with entertainment effects than current text-based short message service (SMS). While many reports indicate that the mobile Internet market will be huge, little is known about whether people will accept MMS. This study applies innovation diffusion theory to examine the factors that influence the adoption of MMS. The proposed model was empirically evaluated by using survey data collected from 207 users concerning their perceptions of MMS. The findings indicate that perceptions of use were different over innovation diffusion stages. Specifically, there was a significant difference between potential adopters and users. The results may provide further insights into MMS marketing strategies.