Drawing from institutional and bandwagon theories, we develop and examine how characteristics of an innovation—radicality and scope—affect diffusion rates—the extent and speed of diffusion. The hypotheses are empirically tested with a sample of 82 new product innovations in three separate industries over a sixteen-year time span. We find that: (1) the greater the radicality of innovation, the higher the extent and faster the speed of diffusion and (2) the greater the scope of innovation, the faster the speed of diffusion. We advance the innovation diffusion literature by using the institutional and bandwagon literature to explain how micro-characteristics of each innovation influence diffusion rates.
Get full access to this article
View all access options for this article.
References
1.
Abrahamson, E.1991. Managerial fads and fashions: The diffusion and rejection of innovations. Academy of Management Review, 16: 586–612.
2.
Abrahamson, E., & Rosenkopf, I.1993. Institutional and competitive bandwagons: Using mathematical modeling as a tool to explore innovation diffusion. Academy of Management Review, 18: 487–517.
3.
Abrahamson, E., & Rosenkopf, I.1997. Social network effects on the extent of innovation diffusion: A computer simulation. Organization Science, 8(3): 289–309.
4.
Barney, J. B.1988. Returns to bidding firms in mergers and acquisitions. Strategic Management Journal, Special Issue: 71–78.
5.
Banerjee, A. V.1992. A simple model of herd behavior. The Quarterly Journal of Economics, 107(3): 797–817.
6.
Bikhchandani, S., Hirshleifer, D., & Welch, I.1992. A theory of fads, fashion, custom, and cultural change as informational cascades. Journal of Political Economy, 100(5): 992–1026.
7.
Capon, N., Farley, J. U., & Hoenig, S.1990. Determinants of financial performance: A meta-analysis. Management Science, 36: 1143–1159.
8.
Chen, M., & MacMillan, I.1992. Nonresponse and delayed response to competitive moves. Academy of Management Journal, 35: 539–570.
9.
Chen, M., Smith, K. G., & Grimm, C. M.1992. Action characteristics as predictors of competitive responses. Management Science, 38: 439–455.
10.
Cox, D. R.1972. Regression models and life tables. Journal of the Royal Statistical Society, 34: 187–202.
11.
D’Aveni, R. A.1994. Hypercompetition: Managing the dynamics of strategic maneuvering. New York: Free Press.
12.
Damanpour, F.1991. Organizational innovation: A meta-analysis of effects of determinants and moderators. Academy of Management Journal, 34(3): 555–590.
13.
Damanpour, F.1992. Organization size and innovation. Organization Studies, 13(3): 375–402.
14.
Davies, S.1979. The diffusion of process innovations. Cambridge: Cambridge University Press.
15.
Drazin, R., & Schoonhoven, C. B.1996. Community, population, and organization effects on innovation: A multilevel perspective. Academy of Management Journal, 39(5): 1065–1083.
16.
DiMaggio, P., & Powell, W.1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48: 147–160.
17.
Glick, W. H.1985. Conceptualizing and measuring organizational and psychological climate: Pitfalls in multilevel research. Academy of Management Review, 10: 601–616.
18.
James, L. R.1982. Aggregation bias in estimates of perceptual agreement. Journal of Applied Psychology, 67: 219–229.
19.
Klein, L. J., & Sorra, J. S.1996. The challenge of innovation implementation. Academy of Management Review, 21(4): 1055–1080.
20.
Lee, H., Smith, K. G., Grimm, C. M., & Schomburg, A.2000. Timing, order and durability of new product advantages with imitation. Strategic Management Journal, 21: 23–30.
21.
Leonard-Barton, D.1992. Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13: 111–125.
22.
Li, H., & Atuahene-Gima, K.2001. Product innovation strategy and the performance of new technology ventures in China. Academy of Management Journal, 44(6): 1123–1134.
23.
Lieberman, M. B., & Montgomery, D. B.1988. First-mover advantages. Strategic Management Journal, 9: 41–58.
24.
MacMillan, I., McCaffrey, M. L., & Van Wijk, G.1985. Competitor’s responses to easily imitated new products: Exploring commercial banking product introductions. Strategic Management Journal, 6: 75–86.
25.
Mahajan, V., Muller, E., & Bass, F. M.1990. New product diffusion models in marketing: A review and directions for future research. Journal of Marketing, 54: 1–26.
26.
Mansfield, E.1961. Technical change and rate of imitation. Econometrica, 61: 741–766.
27.
Mansfield, E.1985. How rapidly does new technology leak out?Journal of Industrial Economics, 34(2): 217–233.
28.
Mansfield, E.1993. The diffusion of flexible manufacturing systems in Japan, Europe and the United States. Management Science, 39: 149–159.
29.
McGrath, R. G.1999. Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Journal, 24(1): 13–30.
30.
Meyer, M., & Rowan, B.1977. Institutional organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83: 340–363.
31.
Nelson, R. R., & Winter, S. G.1982. An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.
32.
Oliver, C.1991. Strategic responses to institutional processes. Academy of Management Review, 16: 145–179.
33.
O’Neill, H. M., Pouder, R. W., & Buchholtz, A. K.1998. Patterns in the diffusion of strategies across organizations: Insights from the innovation diffusion literature. Academy of Management Review, 23(1): 98–115.
34.
Pennings, J. M., & Harianto, F.1992. The diffusion of technological innovation in the commercial banking industry. Strategic Management Journal, 13: 29–46.
35.
Pfeffer, J.1994. Competitive advantage through people. Boston: Harvard Business School Press.
36.
Porter, M. E.1980. Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.
37.
Reinganum, J. F.1989. The timing of innovation: Research, development, and diffusion. In R. Schmalensee & R. Willig (Eds.), Handbook of industrial organization: Vol. 1, 849–908.
38.
Robinson, W. T.1990. Product innovation and start-up business market share performance. Management Science, 36: 1279–1289.
39.
Rogers, E. M.1995. The diffusion of innovations. New York: Free Press.
40.
Schumpeter, J. A.1934. The theory of economic development. Cambridge, MA: Harvard University Press.
41.
Shrout, P. E., & Fleiss, J. L.1979. Intraclass correlations: Uses in assessing rater reliability. Psychological Bulletin, 86: 420–428.
42.
Smith, K. G., Grimm, C. M., & Gannon, M. J.1992. Dynamics of competitive strategy. Knobbier Park, CA: Sage Publications.
43.
Tolbert, P. S., & Zucker, L. G.1983. Technological discontinuities and organization environments. Administrative Science Quarterly, 31: 439–465.
44.
Tushman, M. L., Newman, W. H., & Romanelli, E.1986. Convergence and upheaval: Managing the unsteady pace of organizational evolution. California Management Review, 29(1): 26–45.
45.
Van de Ven, A. H., Polley D. E., Garud, R., & Venkataraman, S.1999. The innovation journey. New York: Oxford University Press.
46.
Wade, J.1995. Dynamics of organizational communities and technological bandwagons: An empirical investigation of community evolution in the microprocessor market. Strategic Management Journal, 16: 111–133.
47.
Walsh, J. P., & Ungson, G. R.1991. Organizational memory. Academy of Management Journal, 16: 57–91.
