Management Decision

A multidimensional approach to the adoption of innovation

Juett R. Cooper

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Juett R. Cooper, (1998),"A multidimensional approach to the adoption of innovation", Management Decision, Vol. 36 Iss 8
pp. 493 - 502
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Jon-Arild Johannessen, Bjrn Olsen, G.T. Lumpkin, (2001),"Innovation as newness: what is new, how new, and new to
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E.C. Martins, F. Terblanche, (2003),"Building organisational culture that stimulates creativity and innovation", European
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A multidimensional approach to the adoption of

innovation

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Juett R. Cooper
Assistant Professor, Marshall University, College of Business Management and
Marketing Division, Huntington, USA
A major emphasis of modern
strategic thinking involves the
role innovation plays in the
profile of the organization.
Academics and practitioners
alike have devoted significant
amounts of time and organizational resources for nearly
four decades to the identification of organizational and
individual correlates of innovation. This work calls into
question the practice of
researchers, which treats
innovation unidimensionally,
such as a process innovation
or a product innovation. A
model is presented which
encourages practitioners and
academics alike to treat
innovations as they exist,
possessing multiple dimensions, such as product,
radical and technological.

Management Decision
36/8 [1998] 493502
MCB University Press
[ISSN 0025-1747]

Introduction
Organizational theorists and managers alike
have long shown more of an interest in the
role of innovation in organizations, primarily
because of the crucial role innovation plays
in securing sustained competitive advantage
(Porter, 1980). As organizations seek to distance themselves from competitors, they
develop and/or adopt new products,
processes, techniques or procedures. In pursuit of these innovations the organization
incurs significant costs, which the firm seeks
to recoup in the form of prices, fees, memberships, and/or grants. The process is further
complicated because as the firm seeks to
innovate, other organizations compete
directly or indirectly by engaging in innovation themselves (Simon, 1997).
More than ever before it is recognized that
competing through innovation is not a onetime event. The firm must seek to stay out of
the rut innovate, concurrently. The concurrent nature of this innovation imperative is
a key driver in the pursuit of competitive
advantage because managers must do more
than develop, implement or approve innovations; they must serve as the architects of the
innovation imperative. Consequently such,
managers are compelled to help the organization develop the necessary skills and characteristics that precede innovation. Of course,
this must all be done in a way that promotes
and stabilizes performance while cultivating
an atmosphere of successful transition and
adaptation in the face of a changing
environment.
Researchers have identified a number of
organizational correlates of the adoption of
innovation, including organizational structure, market structure, institutionalized
expectations, organizational determinants,
organizational climate, and leadership
(Gopalakrishnan and Damanpour, 1992).
Among these, organizational structure plays
a conspicuous role, explaining as much as 60
per cent of the variation in the adoption of
innovation in organizations (Kimberly and
Evanisko, 1981). Even though investigators
concur on some of issues about innovation, a
defining characteristic of innovation
research seems to be the lack of consensus as

to which aspects of organizational structure

(e.g. centralization, structure, etc.) correlate
with innovation, especially in terms of the
degree and direction of these correlations
(Damanpour, 1988). Certainly the sheer complexity of the innovation phenomenon contributes in large part to the aforementioned
confusion (Van de Ven, 1986), but two key
contributors to the controversy include a
failure to adequately define what is meant by
innovation, and under-specification of the
innovation model.
Practitioners and investigators often treat
innovation as an all-inclusive term, even
though they may be referring to very different events or processes. Additionally, in much
of the literature innovation is described in
unidimensional terms, referring to a new
idea, process or product offering as either a
process innovation or product innovation.
When referring to the adoption of a given
innovation or set of innovations, under-specification of the innovation(s) being studied
becomes problematic in that there can be
little or no comparison of findings across
studies or innovation experiences. Resolution
of the dilemmas posed by inadequate definitions and under-specification of the innovation model does not require complex calculations, nor does resolution require vast
resources for managers and researchers who
wish to unravel the innovation mystery. What
they require is a common point of reference
and a theoretical framework that deals with
the complex nature of innovation.
The purpose of this paper is to advance the
understanding of innovation by addressing
these two problems. I will first articulate the
need for clear definition of innovation among
students, practitioners and other stakeholders of organizational innovation. Pursuant to
suggestions for defining innovation in
research and practice, I will outline the difficulties associated with the under-specification of innovation in practice and research. I
will conclude with the proposition of a multidimensional model of innovation, which may
be used and built upon in practice and
research.

[ 493 ]

The importance of a clear

definition

Management Decision
36/8 [1998] 493502

Researchers and practitioners have defined

innovation in several different ways (Burgelman and Sayles, 1986), at times applying the
innovation label to phenomena that involve
radically different management styles and
structures (Utterback, 1994). For example, it
has been shown that organizational forms
that favor the adoption and implementation
of new manufacturing processes may be
improper for the generation of new products
(Kimberly and Evanisko, 1981). Even so, a
review of numerous textbooks for principles
of management and strategic management
showed that most offer little more than a
single line devoted to the definition of innovation, often in terms that differ significantly.
Another consequence of a non-differential
approach to defining innovation is the tendency to suggest one organizational form
accommodates all forms of innovation. In
Drucker (1998), for instance, organic organizational structures generally improve innovation, where centralization is low, formalization is low, and firms are entrepreneurial in
their strategy. Such generalizations are too
gross for such a complex phenomenon.

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Juett R. Cooper
A multidimensional approach
to the adoption of innovation

Innovation process or discrete event?

One of the more common debates concerning
the definition of innovation asks whether
innovation should be regarded as a process or
a discrete event. Those who see innovation as
a process focus on the various stages that the
potential adopter goes through over the
course of an innovation effort. These stages
include identifying problems, evaluating
alternatives, arriving at a decision, and
putting innovation into use (Rogers, 1983).
According to this approach, specific tasks and
roles of organizational participants change as
the process of innovation continues in an
organization (Burgelman and Sayles, 1986).
From the process perspective, the interplay
between events and people at each stage of the
process influences events in subsequent
stages, determining whether the adoption
process will continue or not. For proponents
of process definitions of innovation there are
several issues of interest. These include the
role of communication in facilitating successful innovation, best practices in terms of
sequencing the stages of innovation, the characteristics of individuals and teams in successful and unsuccessful processes, and the
nature of the relationships between parties
involved in the innovation process (Gopalakrishnan and Damanpour, 1992; Rogers, 1983).

[ 494 ]

Advocates of innovation as an event do not

necessarily ignore the processes involved in
innovation. For them, however, implementation of innovation occurs when there is actual
acceptance of risk and the commitment of
resources occurs. From this perspective differentiation between innovators and noninnovators occurs when the innovation is put
to use within the organization. Consequently,
questions involving innovation often take a
more macro approach. Points of interest for
enthusiasts of innovation as a discrete event
include organizational characteristics such
as firm size or age, and conditions of the
industry that promote or impede innovation,
such as market concentration or the maturity
of the industry. It is the student of innovation
as a discrete event that asks what types of
firms are more prone to the adoption of innovation, or in what types of organizations will
the adoption of innovation be more successful
(or unsuccessful, as the case may be).
Does specifying a process perspective versus a standpoint that emphasizes a discrete
event matter? The firm that adopts a given
innovation does so through a series of actions
that occur over time (Rogers, 1983). It has also
been suggested that since firms which successfully innovate often follow the same or
similar phases during the course of the innovation process, firms which omit or reject
these phases will run the risk of a failed innovation attempt (Burgelman and Sayles, 1986).
The firm that has chosen to adopt a given
innovation would do well to take care in identifying obstacles that may be encountered
during the implementation process.
Those who adopt innovation share some
common organizational characteristics, just
as do those who do not adopt innovation
(Leonard-Barton, 1985). Consequently, the
discrete event approach to studying innovation is appropriate for those seeking to differentiate between adopters and non-adopters of
innovation. Others who would benefit from
this approach include parties seeking to identify potential innovation adopters such as
those selling new technologies. This
approach to innovation also aids those firms
that wish to become more innovative themselves, and seek to do so by mimicking the
organizational characteristics of
benchmarked firms (Abrahamson, 1991). This
will be more likely when firms believe innovation adoption to be a critical success factor
within a given market or industry.
Which perspective constitutes innovation?
Both the process approach and the discrete
event perspective have merit in that adopters
may be differentiated from non-adopters
within a referent set of organizations. From
the process perspective the issue of concern

Juett R. Cooper
A multidimensional approach
to the adoption of innovation
Management Decision
36/8 [1998] 493502

is the adoption stage or phase of implementation which ultimately spells success or failure for subsequent phases of the adoption and
of the innovation itself. Use of the discrete
event approach is fitting for assessing the
merits of particular organizational structures and business strategies in the adoption
of innovation.

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Innovation defined as invention, first use,

and relative to the agent
Another source of confusion in the study of
innovation adoption deals with the scope of
behaviors that constitute an innovation.
Definitions of innovation range from treating
innovation and invention synonymously, to
regarding any idea, practice, process, or product that is new to the user organization as
innovation.
The narrowest definition of the term views
innovation and invention synonymously. In
this context, both terms refer to creative
processes involving the application of existing ideas to create a unique solution to a
problem (Duncan, 1972). In this purest sense
of the word innovation occurs very infrequently and involves very few organizations.
In theory this understanding of innovation
could help identify firms that achieve sustained competitive advantage through radical
change. In practice however inventor organizations often seek to develop new process of
outputs as ends in themselves, choosing to
refrain from commercial use of the invention
for long periods (Utterback, 1973). It is also
well known that many firms achieve
sustained competitive advantage not by
invention, but by the clever use of existing
processes, products, or technologies, thus
clouding the relationship between invention
and strategy.
A broader interpretation of innovation
specifies that the first use of an idea by a
given set of organizations with a common
goal constitutes innovation (Kimberly and
Evanisko, 1981). This definition of innovation
restricts recognition of the phenomenon to
first movers within a given industry. Others
contend that the definition of innovation
should include success as a qualifier, arguing
that use of the term should be limited to the
commercial development of a new idea,
process, or technology (Krasner, 1982).
Although this approach to defining innovation has intuitive merit, a number of practical problems arise with this approach. Information does not diffuse throughout sets of
organizations or markets simultaneously, but
is influenced by spatial, economic, social and
political proximity to information sources or
markets. A firm may therefore be first or
among the first in an industry to adopt or

commercialize an innovation as a matter of

luck or happenstance more than a matter of
strategic choice (Midgley and Dowling, 1978).
In addition two separate firms may adopt the
same innovation having the same motives,
using the same techniques yet only the firm
that achieves some level of economic success
would be called innovative. Classifying identical, simultaneous behaviors by individuals
or organizations differently based on some
contrived ex post measure of success may veil
the understanding of the underlying behavior.
Others share the belief that innovativeness
is based on when the adopter acted relative to
others. Rogers (1983) proposed the first 2.5 per
cent of those within a referent group to adopt
a given innovation were innovators, while
Midgley and Dowling (1993) proposed that as
many as the first 29 per cent of actors that
adopt a given innovation display the attributes of innovators. Thus, validating a contrived measure of innovativeness based on
the relative time of adoption could be problematic.
So what constitutes innovation? Many
recent works on the adoption of innovation
separate the term from measures of absolute
time since the first use or introduction of the
idea, practice or process. Additionally,
Bigoness and Perreault (1981) provide convincing arguments that the adoption of a
single process, product, or technology by a
firm does not equate to a tendency toward
innovativeness. They propose that it is the
firm that consistently adopts innovative
processes and ideas that appropriately
demonstrates innovative tendencies.
A growing number of practitioners and
researchers define innovation as any idea,
practice, or object that the adopting individual or organization regards as new (Damanpour and Evan, 1984; Damanpour, 1991). From
this perspective, the newness attached to an
innovation remains a matter of perception, so
being first to adopt does not matter. This is
not to say that being the first mover within a
market or industry is not relevant, it certainly is. But in this approach to understanding innovation the key question for the adopting unit involves uncertainty associated with
the idea, process or object. Uncertainty arises
because the adopter has incomplete knowledge with which to evaluate and make judgements about the appropriateness of the innovation and the long-term consequences of
adoption (Robertson and Gatignon, 1986).
The preceding discussion of the most
prominent definitions of innovation should
articulate the importance of clarity in reference and intent when discussing innovation.
If one holds to the perspective that innovation

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Juett R. Cooper
A multidimensional approach
to the adoption of innovation

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is appropriate and desirable in a given situation, and if it is acknowledged that innovation is a non-chance event that is influenced
by strategic intent, managerial action, and
organizational policy, then a common understanding of what is meant by innovation is
crucial. While I have identified the strengths
and drawbacks of some of the more prominent definitions of innovation, which interpretation of innovation researchers or practitioners should adopt in their instance should
be based on the intended outcomes of the
work. My purpose has been to demonstrate
how important it is to be specific when articulating the interpretation of innovation being
used. Simply saying innovation is not sufficient. Specificity in defining what is meant by
innovation is critical for establishing the
validity of the findings, propositions, and
policies that are consequent to any investigation. By failing to define the set of organizational behaviors that qualify as innovation,
both the study and management of innovation will continue to be encumbered with
conflicting and inconclusive findings.
Nohria and Gulati (1996, p. 1251) provide an
excellent example of clearly communicating
what they mean by innovation, noting very
broadly to include any policy, structure,
method or process, product or product opportunity that the manager of the innovating
unit perceived to be new. The care that
Nohria and Gulati exercise in defining what
they mean by innovation serves as a good
example for others to follow. Policy makers,
researchers and practicing managers may
not always agree as to the definition of innovation, or what innovative behavior constitutes. But when we take time to communicate
what we mean by innovation, others will have
an idea as to the applicability of our ideas to
their work or given situation.

Dimensions of innovation
Regardless of the definition used to identify
organizational behaviors that constitute
innovation, practitioners and students of
innovation widely agree that innovation
comes in many forms (Gopalakrishnan and
Damanpour, 1992; Utterback, 1994). For some
the invention of the now famous Post-it Note
that began as a bookmark for a 3M engineer
is the quintessential innovation. Others in
the household wood furniture industry identify the application of electrostatic finishing
to wood as a textbook innovation. MIS professors see the use of Internet technologies for
data gathering, literature review and classroom instruction as a fundamental innovation. Upon closer observation, however, each

[ 496 ]

of the aforementioned innovations are very

different in nature. While the Post-it involved
the end product of the company, electrostatic
finishing may never be noticed by the average customer since it involves the production
process. Similarly, though the use of Internet
Technologies may be an incremental change
for MIS faculty, it may be a much more radical change for English professors.
The fact that there are various types of
innovation does not in itself merit the interest of managers and researchers. The relevance of the dimensionality issue comes from
the interplay between variations in organizational characteristics and the various types of
innovation. Research in recent years suggests
that structural characteristics of organizations (such as centralization or size) vary
with 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 innovation
is not constant across all innovations. The
various characteristics of an organization
interact together with the various dimensions an innovation possesses to determine
the probability of innovation adoption.
Debate continues, however, as to what/how
organizational characteristics interplay with
the various types of innovation.
There are a number of explanations for a
relationship between organization structure
and innovation type, though the two most
prominent involve strategy and power. Chandler (1962) showed that the firm that hopes to
survive and enjoy competitive success over
time should adopt an organizational structure that matches and facilitates its strategy.
In addition, his observations of the development of the multi-divisional form, with its
new approaches to assigning authority,
responsibility and communication, qualify as
a type of innovation in the management core
of the firm, establishing a link between strategy, structure and the adoption of innovation.
Porter (1980) argued that a key aspect of realizing a low cost business strategy rests with
the firms ability to reduce costs through
process innovation, while a differentiation
strategy depends on the firms ability to generate totally new product ideas or new combinations of features in existing products.
While debate continues as to which organizational form matches which type of innovation, it is clear that some of the relationship
between structure and innovation exists due
to a relationship between strategic intent and
innovation type.
A second reason innovation type may vary
with organizational structure relates to relative power within the organization. Dafts
(1978) dual core model of innovation suggests

Juett R. Cooper
A multidimensional approach
to the adoption of innovation

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technological innovation flourishes in organizations or their sub-units where organic

structures exist, while more mechanistic
(bureaucratic) forms promote administrative
innovation. As we will see later, administrative innovations include changes that affect
the policies, allocation of resources, and other
factors associated with the social structure of
the organization (Daft, 1978) and originate
with professional managers. Technological
innovations represent adoption of an idea
that directly influences the basic output
processes of the firm (Daft, 1978) and often
originate with technical specialists, such as
engineers and those trained in the hard sciences. Since innovation type in a general
sense is related to the professional orientation of the innovator, then organizations that
are dominated by people of one orientation or
the other should be more prone to particular
types of organizations (Cooper, 1996; Kimberly and Evanisko, 1981; Leonard-Barton,
1985).
Previous work into the adoption of innovation has revealed numerous dimensions of
innovation. While others may exist, the most
prominent innovation dimensions (with
regard to organizational structure) are radical, incremental, product, process, administrative and technological (Utterback, 1994).
Research into the structural correlates of
each dimension of innovation remains
largely inconclusive, giving rise to the question whether to treat various types of innovation as completely different phenomena, or as
different dimensions of a more complex
process/event. I will propose that innovation
exists as a multidimensional concept, and
just as failing to define terms contributes to
misunderstanding about the organizational
correlates of innovation, so does under-specification of innovation based on its type. Previous studies into the relationship between
innovation type and organizational structure
have dealt with each dimension alone or have
set juxtaposed seemingly opposite dimensions and compared them with firm structure. In keeping with the literature and for
purposes of clarity, these dimensions will be
set pairs (Tushman and Anderson, 1986) with
a summary of findings regarding the comparisons. These include the juxtaposition of
radical against incremental innovations,
technological versus administrative innovations, and product versus process innovations

Radical versus incremental innovation

The decisive factor in traditional distinctions
between radical and incremental innovation is
the degree of strategic and structural change
that the firm must undergo to accommodate

the innovation in question. Incremental

changes enhance and extend the underlying
technology and thus reinforce the established
technical order (Tushman and Anderson,
1986, p. 441). Radical innovations, on the other
hand, represent advances so significant that
revolutionary alteration of the organization
and its support networks must occur to
accommodate and implement change. As
innovations become more radical or competence destroying, they entail clear, risky
departures from existing practices.
Study of innovation along the radical and
incremental dimensions has been shown to
be inconclusive and problematic. Scuillis
(1998) study of innovation adoption in the
banking industry proposed that incremental
innovations were associated with economies
of scale, which would favor larger firms. Still,
the results of her study showed that adopters
of incremental innovations were smaller
firms with lower levels of formalization. Others, however, found incremental innovations
were more prominent in large, complex,
decentralized organizations (Ettlie et al.,
1984). What would explain such disparate
findings? Ettlie and his colleagues study of
incremental innovation included changes in
both product and process areas of the organization, while Scuillis (1998) classification of
incremental innovation included only a
change in process aspects of the firm. This
suggests the types of innovation compared to
organizational structure in the two studies
were not entirely representative of one
another, because only one dimension of innovation was correlated with organizational
structure. Scuilli also assessed the relationship between investment banking, what she
termed a product innovation, and organizational structure. While investment banking is
a product innovation, in the banking industry at the time of her study it was also an
incremental innovation. When correlating
the organizational form and incrementalproduct innovation in the Scuilli (1998) study,
it matches well with the organizational form
of the adopter of incremental-product innovation in the Ettlie et al. (1984) study. If innovation is multidimensional in nature, and as
proposed here, all of the dimensions of each
innovation should be considered when trying
to ascertain the organizational form that
facilitates innovation. Doing so helps resolve
the findings of Scuilli and Ettlie et al..
Other explanations may also account for
the inconsistency in findings about the relationship between structure and incremental
innovation. Since the adoption of incremental innovations may not require a significant
alteration in firm strategy (Whipp and Clark,
1985), alterations in firm structure may not be

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Juett R. Cooper
A multidimensional approach
to the adoption of innovation

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necessary in a strict sense. This would

explain the relative absence of published
work that deals extensively with the relationship between organizational structure and
incremental innovation.
The adoption of radical innovation has
been shown to relate significantly to a number of organizational characteristics. But as
with incremental innovation, the available
attempts to correlate firm structure and the
adoption of radical innovation fail to recognize the complexity of the construct. For
example, some have argued that highly centralized organizations that have low formalization are more apt to adopt radical innovations (Ettlie et al., 1984), while others propose
that it is the firm that is low in centralization
that is conducive to radical innovation adoption (Scuilli, 1998). Some suggest firm size
correlates negatively with the adoption of
radical innovation because of difficulty in
connecting the necessary processes,
resources and strategies that must accompany the event (Dougherty and Hardy, 1996).
Other proponents of the small firm approach
to radical innovation maintain that it is the
small firm which possesses the entrepreneurial culture needed to grasp the market opportunities that lie outside the firms boundaries
(Rothwell, 1983). Different studies favor radical innovation adoption by the large firm,
where organizational resources are more
available (Scuilli, 1998). As with incremental
innovation, a more detailed analysis of the
research on radical innovation suggests that
disparate findings could be the consequence
of other intervening innovation dimensions.
When adding product-process dimensions to
the radical innovation studies, there seems to
be more consistency among studies that have
focused on radical product innovations, while
firms that adopt radical process innovations
also show similar structural configurations.

Technological versus administrative

innovation
The distinction between technological and
administrative innovation involves the proximity of the change in relation to the organizations operating core. Technological innovation involves the adoption of an idea that
directly influences the basic output
processes, while administrative innovations
include changes that affect the policies, allocation of resources, and other factors associated with the social structure of the organization (Daft, 1978). Numerous researchers have
studied the correlation between organizational characteristics and the adoption of
technological innovation. Still, results involving the direction and degree of correlation
between organizational characteristics and

[ 498 ]

technological innovation adoption vary

widely. The inconsistency in many of these
findings is due in large part to the fact that
changes termed as technological innovation
include both product innovations and process
innovations (Damanpour, 1987). This is problematic since firms adopting process innovations often pursue different strategies (Porter,
1980) and consequently different organizational structures (Utterback, 1994) than those
adopting product innovations. In addition, it
has been shown that technological innovation can be separated according to radical
and incremental dimensions (Lawless and
Anderson, 1986). Thus, while recognition of
the technological dimension of innovation is
relevant and necessary, it is not sufficient in
itself to reconcile the disparate understanding of innovation adoption in organizations.
The correlation between organizational
structure and administrative innovation has
also been problematic, both in terms of consistency and significance of results. As with
technological innovations, it has been suggested that the administrative innovation be
integrated with the radical and incremental
dimensions of innovation (Damanpour, 1988),
which may explain why a number of studies
have failed to record significance in correlations between administrative innovation and
structural variables (Kimberly and Evanisko,
1981; Damanpour, 1987). Again the evidence
suggests that thinking in terms of administrative innovation alone under-specifies the
event, suggesting a more robust approach to
studying and managing innovation is in
order.
Studying the adoption from solely an
administrative or technological perspective
is also complicated by the possibility of a
reciprocal relationship between administrative innovation and technological innovation
(Damanpour et al., 1989). There is evidence
that in the organizational change process
administrative innovation may lead to technological innovation in some instances, while
the reverse is true in other instances. The
sole use of administrative and technological
dimensions in the assessment of innovation/
organizational fit therefore falls short
because of the potential attachment of the two
dimensions over time, as well as failure of
either dimension to fully partition the concept into its contingent types.

Product versus process innovation

As noted above, product innovation reflects
change in the end product or service offered
by the organization, while process innovation
represents changes in the way firms produce
end 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 process
innovation (Dess and Davis, 1984). In addition, both process and product innovation
have been shown to be potentially significant
sources of strategic advantage.
Product innovations have been linked to
entrepreneurial organizational forms and
leadership styles (Miller and Friesen, 1982),
but the organizational correlates of product
innovation in service firms often contradict
the correlates of product innovation in goods
producing firms. It must also be kept in mind
that product innovation may represent nothing more than an organizations response to
needs of outside firms. For example, the adoption of electronic data interchange (EDI) as a
type of product innovation is often in
response to demands of important customers
(Cooper et al., 1997). In the banking industry
and health care, for example, the federal government often imposes EDI as a new product
on firms that have no choice but to comply.
This may shed light into the inconsistency of
the relationship between organizational
structure and product innovation. Scuilli
(1998) found that large, complex, participative
firms adopt product innovation, while Rothwells (1983) research favored small firms in
terms of product innovation, as did Dougherty
and Hardy (1996). In these instances the adoption of the innovation may represent a change
not so much in strategy or structure in the
adopting firm as in the client that calls for the
change. Thus, a multidimensional model of
innovation appears in order to resolve the
uncertainties associated with product innovation and organizational structure.
As is the case with the other dimensions of
innovation the relationship between process
innovation and organizational structure is
uncertain. Scuilli (1998) found that in the
banking industry it was the small firm that
was more apt to adopt process innovation,
while Damanpour and Evan (1984) proposed
that large firms are more likely to adopt innovation. Process innovation historically
seemed to favor the large, bureaucratic firm
(Porter, 1980), operating in mature markets
with high organizational slack. Since small
organizations tend to utilize fewer input
materials, the social and economic costs of
innovations that apply to small proportions
of these materials may exceed the benefits
that these innovations yield. In larger firms,
however, even processes that contribute a
small proportion of a firms output may justify the adoption of innovations on the basis
of economies of scale or through the production critical masses at which innovation
becomes efficient. However, changes in the
approach to strategy and the adoption of

recent technologies and techniques such as

flexible manufacturing and total quality
management, management information systems, EDI would seem to challenge this wisdom (Cooper et al., 1997; Parthasarthy and
Sethi, 1992). As computer technology
advances, the cost of systems and software
decline and technological sophistication of
the workforce improves, no longer are adaptations reserved for the technologically lite,
opening the doors for process innovation in
the small firm.
Taken together, the body of evidence suggests traditional approaches to the study and
management of innovation adoption fail to
answer persisting questions of researchers
and practitioners alike. The abandonment of
this area of investigation is far from warranted. Instead, it would seem that some
answers to prevailing questions depend on
treating innovation adoption as a multidimensional issue.

A multidimensional approach
As the foregoing discussion demonstrates,
much of the misunderstanding and conflict
surrounding innovation adoption is owed to a
long-standing unidimensional concept of innovation. If innovations were either/or in terms
of their dimensionality, as some have proposed,
extant models of innovation adoption and
management would be sufficient in most situations. However as I have shown, few innovations appear to be uni- or even bi-dimensional
in nature. When a firm adopts a new technique
for assembling a given product, it has a technological dimension, since it directly influences
the basic output processes of the organization
(Daft, 1978). The same innovation also constitutes a process innovation, since the firm uses
this technique in the production of an end
product (Zaltman et al., 1973). This innovation
must also be assessed in terms of
radical/incremental dimensions based on the
extent to which it departs from existing techniques within the firm (Ettlie et al., 1984).
As noted earlier, the advent of technologies
such as EDI has resulted in the reality of
innovations that possess both administrative
and product dimensions (as well as being
either radical or incremental). Previous to
technological developments such as these,
administrative-product innovations were
thought by many to be a managerial unicorn
interesting to think about but unrealistic in
a tangible sense. Organizations frequently
use Internet technologies and communication by way of the World Wide Web to
advertise, distribute and/or service their
products in an attempt either to gain

[ 499 ]

Juett R. Cooper
A multidimensional approach
to the adoption of innovation

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Management Decision
36/8 [1998] 493502

[ 500 ]

competitive advantage or to keep pace with

competitors. The use of these technologies
constitutes administrative-product innovation because they mean alteration of the product/service offered as well as alterations in
organizational power, procedure or structure.
(The degree to which these technologies augment or replace existing processes determines whether they would be radical or
incremental.)
Researchers and managers have tried various approaches to clarifying the relationship
between organizational characteristics and
the adoption of innovation in the face of multiple dimensions of innovation. Hitt et al.
(1996, p. 1096) combined the acquisition of
process innovations with the adoption of
product innovations and market innovations
into a single variable termed external innovation. When using this approach, Hitt et al.
(1996) found no significant relationship
between firm size and the adoption of external innovation. Notwithstanding, others have
found a significant relationship between firm
size and product innovation (Rothwell, 1983),
as has also been demonstrated between
process innovation and firm size (Cohn and
Turyn, 1980). This would suggest that simply
combining various dimensions into one type
fails to accommodate varying strategic motivations behind different combinations of
innovation dimensions (Schroeder, 1990).
Another way of dealing with the multiple
dimensions of innovation has been to not
differentiate between the various types of
innovation at all innovation is just innovation. When Nohria and Gulati (1996) took
such an approach, innovation did not correlate significantly with centralization, yet
centralization was found to correlate significantly and negatively with process innovation by Cohn and Turyn (1980). The method
employed by Nohria and Gulati may identify
the most gross organizational relations to
innovation in general, but it fails to give
proper credence to the role that innovation
type plays in determining the successful
adoption of innovation in organizations
(Miller and Friesen, 1982; Tornatzky and
Klein, 1982).
The preponderance of evidence suggests
that it is most appropriate and beneficial to
treat innovation as a phenomenon that consists of multiple dimensions at the same time.
The model presented here (Figure 1) provides
a multidimensional framework for thinking
about and evaluating the relationship
between organizational characteristics and
the adoption of innovation. Though similar in
concept to Damanpour (1988), this model goes
further by not only adding the product and
process dimensions of innovation, but
providing for the simultaneous yet separate

Figure 1
A multidimensional model of innovation
Incremental

Product

Radical

Process

Administrative

Technological

consideration of the various dimensions on

innovation. The model suggests that strategic
approaches to the adoption of innovation
must at a minimum consider innovation in
terms of the three major dichotomies presented above: product versus process, radical
versus incremental, and technological versus
administrative.
This model also proposes more than simply
combining innovation types into a single
type, as do Hitt et al. (1996). The approach
suggests that various dimensions are relevant, but only as they relate in total to the
other dimensions that exist for a given innovation. The result is an approach in which a
given innovation is considered to exist in
multidimensional space. This model is not
intended to emphasize the absoluteness of
these dimensions alone, but is intended to
serve as a springboard from which these
dimensions of innovation can be added to and
amended as appropriate. As interest in and
emphasis of the adoption of innovation continues, the identification of new dimensions
to innovation will be identified. As these
dimensions come forth, the scope of the
model may be expanded.
The model also suggests that innovations
are not so much either/or, but that a given
innovation possesses the characteristics of
various innovation types at the same time.
Such an approach to thinking about innovation is much more reasonable than in past
years. Historically, administrative innovations could not be product or process in
nature, since these were both sub-sets of technological innovation. The use of innovations
such as TQM (which is considered administrative in nature) in advertising and product
differentiation (such as Ford Motor Companys Quality is Job One) means firms
must consider innovations in a broader
context than before. Similarly advances in
management such as just-in-time inventory (a
process innovation) results in changes in

Juett R. Cooper
A multidimensional approach
to the adoption of innovation
Management Decision
36/8 [1998] 493502

power and social structures within the firm,

which has historically been the domain of
administrative innovation. A multidimensional model of innovation means that by
defining innovations more narrowly in terms
of the attribute combinations they possess (e.g.
process-administrative-radical), researchers
should be more successful in describing relationships between organizational variables
and the adoption of innovation.

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Conclusions
The questions here will be answered in whole
or in part through extensive research. The
author is currently concluding a study aimed
at involving the appropriateness and value of
a multidimensional approach to the study of
innovation adoption. A valid critique of the
multidimensional approach to the study and
management of innovation involves the number of possible dimensions a given innovation
or set of innovations may hold. Other dimensions of innovation may exist that are not
described here. Still, the pursuit of parsimony
and the preponderance of extant research
suggest the dimensions described here appear
to be most relevant in the adoption process.
A number of questions emerge from the
issues discussed in this paper. The first and
foremost relates to the relative importance of
the dimensions of innovation. Does the degree
to which an innovation is radical or incremental overshadow other dimensions of innovation in determining the appropriateness of
an innovation (Damanpour, 1988)? If centralization facilitates the adoption of radical innovation, does that outweigh the need for decentralization in the adoption of process dimension? Furthermore what is the interplay of
organizational strategy? For example, if a
firm is a low cost producer, will that elevate
the product-process dimension to primacy?
The ideas forwarded in this work and the
questions to which they will give rise promise
to play a relevant role in the advancement of
new knowledge about the adoption of innovation. Although this work has focused on the
relationship between innovation type and
organizational structure, the influence of the
multidimensional innovation perspective on
the adoption process is an area of interest.
The need for and characteristics of champions
of innovation would quite possibly differ for a
radical-technologic-process innovation than
in the case of a radical-process-administrative
innovation. A multidimensional approach to
innovation is relevant and important to the
practicing manager, who may build or lose
sustained competitive advantage based on
his/her ability to turn a recipe for innovation
adoption into a finished fit with the

organization. As has been the case with preceding innovation typologies, the appropriateness of this model in the arsenal of management practice and research will only be ascertained with further research and dialogue.

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Application questions
1 Does an emphasis on quality and
efficiency in organizations tend to lead
towards innovation in efficiency alone a
refinement of current thought and
practice rather than new ideas?
2 Think of one or more innovative people
you have worked with. What was their

[ 502 ]

contribution to the organization? Was it all

it could be?
3 Is true innovation something which exists
outside organizational life in terms of
theorists and authors (process innovation)
and licencing or reverse-engineering
(product innovation)?

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