Journal of Business Research 56 (2003) 681 – 686

Adoption and implementation of technological innovations within

long-term relationships
Angela Hausmana,*, James R. Stockb
a
Management, Marketing, and International Business, University of Texas-Pan American, 1201 West University Drive, Edinburg, TX 78539, USA
b
University of South Florida, 4202 East Fowler Avenue, Tampa, FL 33620, USA
Received 7 December 2000; accepted 6 September 2001

Abstract

As businesses move toward long-term cooperative relationships, they face increasing needs to coordinate, especially with respect to the
adoption of innovative technologies. Since effective adoption involves both adoption and implementation, both stages are critical. This study
builds and tests models of adoption and implementation as a function of influence, dependence, and relational variables. Results of this study
on electronic data interchange (EDI) adoption in hospital supply chains indicate social influence achieves higher adoption rates than either
coercive or noncoercive influence efforts. In addition, communication and participative decision-making are critical implementation
variables.
D 2003 Elsevier Science Inc. All rights reserved.

Keywords: Innovation; Electronic data interchange; Influence; Implementation; Statistical analysis

1. Introduction literature is mute on the process most useful in encouraging

Although often considered a natural extension of adop-
tion, implementation does not follow automatically and
additional research into successful implementation is neces-
sary (Rogers, 1995). In addition, an understanding of
potential adopters as active decision-makers, rather than as
passive units, is required (Windsor, 1995). In organizations,
adoption and implementation processes might be more
complex due to the web of relationships surrounding the
adopter, such that each independent stakeholder is poten-
tially affected by technological changes (Hausman, 1996).
Thus, promoting cooperative adoption among relational
partners may be critical to successful adoption (Hakansson
and Johanson, 1988).
Due to the complementary nature of cooperative adop-
tion, the firm who desires to implement a particular innova-
tion (the focal firm) may need to convince relational
partners (recipient firms) to implement it as well. Extant
* Corresponding author. Tel.: +1-956-381-2826; fax: +1-956-384-
5065.
E-mail address: hausman@panam.edu (A. Hausman).
this cooperation without damaging the partnership. Insights
from relationship marketing do suggest that the type of
influence exerted, as well as interorganizational variables,
are drivers of other types of cooperation (Brown and
Pattinson, 1995; Dwyer and Gassenheimer, 1992).
Therefore, this study is directed towards answering the
following questions: (1) what effects do influence efforts
exerted by focal firms have on the technology adoption
decisions of recipient firms?; (2) do these influence efforts
affect the implementation of technological change?; and (3)
to what extent do interorganizational variables, such as trust,
communication, dependence, and participative decision-
making between focal and recipient firms affect (a) adoption
and (b) implementation of innovations?
2. Conceptual development
The context of this study is adoption of electronic data
interchange (EDI) by hospitals. EDI is actually five related
software programs designed to facilitate the ordering, track-
ing, and payment of goods across a channel. By electron-
ically processing orders, EDI eliminates mistakes, shortens

0148-2963/03/$ – see front matter D 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S0148-2963(01)00313-7
682 A. Hausman, J.R. Stock / Journal of Business Research 56 (2003) 681–686
lead times, and speeds payment. Allegiance Healthcare, an
early and strong proponent of EDI in this channel, has
encountered difficulties in adoption of EDI by downstream
channel partners over the past 20 years (Emmelhainz, 1990).
Allegiance has become increasingly aggressive in attempts
to obtain cooperation from Hospital Material Managers—
mainly through letter writing campaigns using coercive
influence.
Attempts to explicate the adoption process in this type of
organizational setting are limited and influence efforts by
relational partners are summarily overlooked (Hausman,
1996). Since the adoption process involves influence direc-
ted at a specific other, rather than a population in general,
an appropriate model must incorporate micro-level varia-
bles acting in the firm interface (Gatignon and Robertson,
1989). Once adopted, the innovation must be imple-
mented — it must be installed, personnel trained on its
use, and it must be incorporated into the daily routines
within the firm — or desired efficiencies will not be
achieved (Rogers, 1995). Despite its importance, little
evidence exists to facilitate our understanding of the factors
affecting extent or speed of implementation (Rogers, 1995;
Zaltman et al., 1973).
2.1. The role of influence in cooperative adoption
Research supports a relationship between the use of
interfirm power (influence) and technological change (Frost
and Egri, 1990; Maute and Locander, 1994). In its least
coercive forms, influence might promote adoption by
providing information about the innovation. In its more
coercive forms, influence may be detrimental to the long-
term survival of the relationship. Evidence suggests coer-
cive influence strategies are counterproductive in producing
favorable adoption decisions, while noncoercive influence
strategies are more effective (Brown and Pattinson, 1995;
Rogers, 1995). Contradictory results suggest that a power-
ful member is necessary to drive the adoption process
(Maute and Locander, 1994). However, this type of influ-
ence resembles championing more than coercive influence.
Thus, the following hypotheses were incorporated into the
model.
Hypothesis 1. Coercive influence strategies are negatively
correlated with adoption of technological innovations by
recipient firms engaged in long-term relationships.
Hypothesis 2. Noncoercive influence strategies are pos-
itively correlated with adoption of technological innovations
by recipient firms engaged in long-term relationships.
In addition to coercive and noncoercive influence
efforts, firms might use social influence to encourage
adoption (Cialdini, 1993; Frost and Egri, 1990). Social
influence, operationalized as referent power, involves asso-
ciative desires including respect for and friendship with
counterparts. Several studies cite such social influences as
factors behind certain consumer behaviors (Hallen et al.,
1991) and business relationship success (Frazier et al.,
1988), but have never looked at social influence in the
context of adoption or implementation of innovations.
Thus, we propose the following:
Hypothesis 3. Social influence strategy is positively
correlated with cooperative adoption of technological
innovations by recipient firms engaged in long-term
relationships.
The dependence of one firm on the other may exert a
certain amount of implicit influence. As such, perceptions of
relative dependence are linked with other attitudes about the
focal firm that may encourage cooperation, including trust,
commitment, relational satisfaction, and relational behavior
thereby increasing the likelihood of adoption (Kumar et al.,
1995; Lewis and Lambert, 1991; Lusch and Brown, 1996).
However, other studies find a negative relationship between
dependence and joint action in relationships (Dwyer and
Gassenheimer, 1992; Hart and Saunders, 1997). A negative
relationship between dependence and adoption more closely
fits our model, which emphasizes limited use of power and
increased use of more cooperative means to achieve adop-
tion. An additional consideration involves the relative inde-
pendence of hospitals and suppliers in an industry
composed of multiple suppliers and low switching costs.
Thus, the following hypothesis is proposed:
Hypothesis 4. Perceptions of dependence on the focal firm
held by recipient firms will be negatively correlated with
adoption of technological innovations by recipient firms in
the context of long-term relationships.
2.2. The role of behavioral variables in
cooperative adoption
Critical behavioral variables linked with effective chan-
nel relationships are trust and commitment (Morgan and
Hunt, 1994). The linkage between high levels of trust and
both cooperation and willingness to allocate resources to
joint action has been well established and provides a
conceptual basis for proposing a similar effect on coopera-
tive adoption (Morgan and Hunt, 1994).
Hypothesis 5. High levels of trust between focal and
recipient firms are positively correlated with cooperative
adoption of technological innovations by recipient firms.
The role of commitment to proper channel functionality
is also well documented. Empirical evidence supports the
role of commitment in acquiescence to joint actions (cf.
Kumar et al., 1995; Morgan and Hunt, 1994). Therefore, the
following hypothesis is presented:
Hypothesis 6. High levels of commitment between focal and
recipient firms are positively correlated with cooperative
adoption of technological innovations by recipient firms.
 A. Hausman, J.R. Stock / Journal of Business Research 56 (2003) 681–686
2.3. Factors affecting implementation
A significant consideration at the implementation stage
of the adoption process is the likelihood of rejection
(Rogers, 1995). In EDI implementation, it is understandable
that implementation might pose a significant problem, since
fears over loss of purchasing records are recognized as a
major impediment to EDI utilization (Emmelhainz, 1990).
Further, the relative costs of implementation, such as
retraining employees and building a necessary interface
between the software and the current materials management
system, dwarf the cost of adoption. Finally, the psycho-
logical start-up costs of EDI are high, including confusion,
frustration, and potential conflict with employees (Emmel-
hainz, 1990).
Studies of strategy implementation find a negative rela-
tionship exists between the use of power and implementation
(Conners and Romberg, 1991). Since little guidance exists
relative to implementation of technological innovations, this
study will utilize the influence variables proposed earlier to
explore their effect on the implementation stage of technolo-
gical innovation. This leads to the following hypotheses:
Hypothesis 7. Coercive influence strategies are negatively
correlated with implementation of technological innovations
by recipient firms engaged in long-term relationships.
Hypothesis 8. Noncoercive influence strategies are pos-
itively correlated with implementation of technological
innovations by recipient firms engaged in long-term
relationships.
Hypothesis 9. Social influence strategy is positively
correlated with implementation of technological innova-
tions by recipient firms engaged in long-term relationships.
Other factors uniquely contributing to implementation
have not been identified, since systematic studies focusing
on overcoming this resistance have not been conducted. In
studies of corporate strategy, input from individuals at the
operational level was identified as a precursor to successful
implementation (Strahl et al., 1996). Depth interviews with
practitioners who have recently been involved in the coop-
erative adoption process report reliance on communication
and participative decision-making by members of imple-
mentation teams as a primary means for overcoming internal
resistance to innovation (Stockley et al., 1996). This sug-
gests the following hypotheses:
Hypothesis 10. Participative decision-making by employees
of recipient firms is positively related to implementation of
technological innovations by recipient firms engaged in
long-term channel relationships.
Hypothesis 11. Open communication between employees
of focal and recipient firms is positively related to
implementation of technological innovations by recipient
firms engaged in long-term relationships.
683
3. Methodology
3.1. Measures
Influence strategies were measured using modifications
of the scales developed by Frazier and Rudy (1991).
Hypotheses addressed only coercive and noncoercive influ-
ence, hence, a subset of the items comprising these con-
structs was used (see Boyle et al., 1992; Simpson and Mayo,
1997; Venkatesh et al., 1995 for support for this technique).
Social influence was measured by modifying a scale for
referent power originally developed by Brown et al. (1995).
Participative decision-making was measured utilizing a five-
item scale developed by Mohr and Spekman (1994). Open
communication was assessed using a five-item scale that
was modified to reflect interorganizational, rather than
intraorganizational openness (Kitchell, 1995). Commitment
and trust were measured using scales adapted from Morgan
and Hunt (1994). All of the above scales were measured
using seven-point Likert-type items, both positively and
negatively worded.
Adoption was measured using a dichotomous item
assessing adoption/nonadoption of EDI. Communication
frequency was measured using a formative scale modified
from Mohr and Sohi (1995). The implementation scale was
similarly a formative scale that assessed the percentage of
transactions completed electronically across the various
options commonly available on EDI software packages
and time necessary for this implementation level to be
reached.
3.2. Survey procedures
The preliminary survey instrument was distributed to a
group of practitioners, researchers, and EDI experts for
feedback regarding clarity and readability of the instrument.
After multiple iterations and subsequent modifications, the
questionnaire was mailed to 300 randomly selected hospital
material managers from a membership list. Based on pre-
test results, slight changes were made to the instrument
before mailing it to the available population of hospital
material managers (4700) obtained from Allegiance Health-
care, after elimination of managers who participated in the
pretest. A smaller second mailing (1000) was sent to non-
respondents 3 weeks after the initial mailing. Each mailing
contained a letter from the researchers, the survey instru-
ment, an incentive form for a cash lottery, and a return en-
velope.
4. Results
4.1. Sample characteristics
MANOVA analysis supported the decision to combine
data received from the two mailings, but exclusion of the
684 A. Hausman, J.R. Stock / Journal of Business Research 56 (2003) 681–686

Table 1 pretest data. A total usable sample of 281 responses was

Demographics of hospital respondents
received from the two mailings. Survey data show 70% of
Characteristic Frequency Percentage respondents were either facing adoption of EDI or had
Adopted EDI adopted EDI within the previous 2 years; suggesting recall
Yes 220 73.3 adequacy. As shown in Table 1, almost 86% of respondents
No 61 21.7
were actively involved in the adoption decision and all were
Planning to adopt involved in the implementation process. Thus, respondents
Yes 38 13.5 satisfied the criterion for knowledgeable key informants, as
No 4 1.4 established by Heide and John (1990).
Uncertain 18 6.4 The number of nondeliverables obtained suggested a
response rate of 12%, which, while low, compares favorably
Purchasing type
Centralized 191 68.0 with the 11.1% response rate obtained in a study of hospital
Decentralized 69 24.6 administrators (Naidu et al., 1999). Nonresponse bias was
tested using two different methods. First, respondents to the
Decision-making involvement (more than one answer possible) first mailing were compared with respondents from the
Made the decision 102 36.3
second mailing (Armstrong and Overton, 1977), then
Influenced the decision 87 31.0
Part of a committee made decision 70 24.9 respondents from a shortened version of the mailing were
Not involved in the decision 20 7.1 compared with respondents who answered the complete
Only involved in the implementation 20 7.1 survey. No statistically significant differences were noted
of the decision in either test of nonresponse bias.
As shown in Table 1, data represented a reasonable cross-
Type of software utilized for EDI
Off the shelf 64 22.8 section of existing hospitals. Perhaps surprisingly, especially
Vendor customized 154 54.8 with respect to size, adoption and implementation did not
Internally developed 30 10.7 correlate with any of the demographic variables.
Supplier who influenced adoption
4.2. Psychometric analysis of existing and new scales
Allegiance Healthcare 78 27.8
Abbott Labs 12 4.3
Owens and Minor 65 23.1 All scales utilized in hypothesis testing performed as
General Medical 24 8.5 expected in terms of both dimensionality and item loadings.
Bergen Brunswig 13 4.6 These scales also demonstrated adequate reliability based on
Other 22 7.8
Cronbach’s a (Table 2). Confirmatory Factor Analyses
Percentage purchases from this supplier results (see Table 2) supported the validity of individual
Mean 57.68 scales used in this study and demonstrated acceptable fit for
Median 60.00 the overall confirmatory model.
Number of beds
4.3. Hypothesis testing
Mean 259.49
Median 150
Maximuma 10,000 Implementation still lagged far behind the adoption
Minimum 5 decision. After selecting only those hospitals that had
a
This involved a multiunit hospital chain. adopted EDI, the average percentage of transactions com-
pleted electronically was only 66% for the most frequently

Table 2
Fit statistics — Confirmatory Factor Analysis for constructs
Statistic Model Coercive Noncoercive Social Dependence Trust Commitment Communication Decision-making
a .8800 .8310 .8805 .7346 .9422 .7534 .8025 .8563
c2 975.16 133.32 28.84 25.08 5.29 36.04 .620 32.59 31.07
P value .000 .000 .000 .000 .071 .000 .733 .000 .000
GFI .79 .92 .98 .94 .96 .97 .98 .97 .95
AGFI .73 .87 .92 .89 .89 .92 .93 .93 .90
RMSEA .079 .09 .08 .08 .07 .07 .08 .09 .09
NFI .89 .97 .99 .99 .98 .99 .99 .99 .99
CFI .89 .97 .99 .99 .99 .99 .99 .99 .99
Means 2.59 4.17 4.40 3.89 5.21 4.38 4.92 3.69
S.D. 1.07 1.12 0.98 1.20 1.32 1.09 1.37 1.37
Mode 1.63 4 4 4 6.33 4 5.60 4.20
 A. Hausman, J.R. Stock / Journal of Business Research 56 (2003) 681–686 685

implemented component of EDI. Implementation levels for 5. Discussion

two other components of EDI were less than 20% and
implementation for the other components was negligible. 5.1. Implications
The amount of time necessary to achieve this level of
implementation was, on average, over 4 months (4.28 The factors affecting adoption of technological innova-
months). The high standard deviation (4.09) showed a wide tions and those affecting implementation appear to be
variation in the ability of firms to implement EDI. entirely different. Specifically, a number of interfirm rela-
PRELIS was used to calculate polychoric correlations as tional variables affect the adoption stage, while imple-
input for structural equation modeling, since the adoption mentation appears to require more coordination and input
variable was dichotomous (which also required that adop- from various individuals. As expected, the correlation
tion and implementation processes be analyzed separately) between adoption and implementation is not perfect
(Jöreskog and Sörbom, 1993). The resulting transformed (.5169). Findings offer empirical support for open interor-
data were analyzed using sequential fit processing via ganizational communication and participative decision-
LISREL to achieve both statistical fit and substantive making in overcoming implementation resistance. By the
meaning (Jöreskog and Sörbom, 1993). Tests conducted implementation stage, efforts to influence the speed or
on the implementation half of the model contained only degree of implementation through interorganizational influ-
those hospitals which had already made affirmative adop- ence are ineffective.
tion decisions (n = 158). Table 3 contains the fit statistics Surprisingly, neither coercive nor noncoercive influence
associated with both models. attempts are effective in influencing adoption decisions
Table 3 also summarizes supported hypotheses and made by hospitals. While this result might seem strange,
associated fit statistics. Hypotheses 1 – 4 postulated the studies argue the relative impotence of overt influence
effects of both explicit and implicit influence on the recip- strategies in affecting behavioral change in interorganiza-
ient’s EDI adoption decision. Hypotheses 1 and 2 were not tional relationships (Simpson and Mayo, 1997; Venkatesh et
supported, while Hypothesis 3 was supported. Thus, social al., 1995). Another possible explanation may lie in the
influence affected adoption, but coercive and noncoercive relative power symmetry between members of the channel.
influence did not. Hypothesis 4 was supported; hence, As proposed, social influence is related positively to coop-
dependence was negatively related to adoption. Hypothesis erative adoption. Dependence is negatively related to adop-
5, was supported, however, Hypothesis 6 was not, dem- tion; possibly because recipient firms are reluctant to make
onstrating a positive relationship between trust and adop- idiosyncratic investments that increase risk should the
tion, but not commitment. relationship dissolve.
No support was obtained for the influence variables This study provides some guidance for supply firms who
tested in Hypotheses 7– 9 on implementation. The model need to gain cooperation from their customers for the
does support Hypotheses 10 and 11, since open commun- adoption of technological innovations and, potentially, other
ication and participative decision-making were positively types of joint action. The study suggests that when both
related to timely implementation of EDI. parties are allowed input into the implementation process
the outcome is likely to be more favorable in terms of both
Table 3 the extent of implementation and its speed. The study also
Structural equation results associated with supported hypotheses suggests the positive impact of strong, personal relation-
Hypothesis number Relationship tested Path estimate T value ships between boundary spanners. These boundary spanners
Hypothesis 3 Social influence – adoption 0.39 3.62
generate social capital that can be expended to speed the
Hypothesis 4 Dependence – adoption 0.20 2.40 adoption process. Additionally, interpersonal communica-
Hypothesis 5 Trust – adoption 0.39 3.62 tion appears more memorable, and potentially more influ-
Hypothesis 10 Participative decision- 0.30 2.04 ential than nonpersonal communication, as managers recall
making – implementation receiving few letters despite Allegiance’s claim to use them
Hypothesis 11 Communication – 0.20 0.88
implementation
frequently. Not only is interpersonal communication import-
ant in achieving support for the adoption decision among
Fit statistic Adoption Implementation material managers, it also helps speed the implementation
model model process.
c2 524.43 150.67
Degrees of freedom 143 62 5.2. Limitations and future research
P value .000 .000
GFI .82 .96
AGFI .76 .90
The most severe limitation of this study, however, is that
RMSEA .098 .071 it tested the model in a single context —hospital supply
NFI .86 .98 chains —and extending results to similar contexts appears
CFI .89 .99 appropriate. Low response rate is a concern in this study,
R2 .12 .27 although extensive tests detecting negligible nonresponse
686 A. Hausman, J.R. Stock / Journal of Business Research 56 (2003) 681–686
bias suggest the generalizability of the data to the popu-
lation. Further, despite the low response rate, a sufficient
sample size was obtained to allow statistical significance in
hypothesis testing. However, results only reflect the percep-
tions of hospital material managers and similar perceptions
of the suppliers are limited.
Several additional studies are suggested above, namely,
validation of the model and extension of the results to other
industries. The effects of interfirm influence strategy on
other types of interfirm cooperation should also be studied
to determine if the same positive relationship between joint
action and social influence occurs in these situations as well.
It would also be interesting to investigate whether prior
experience with technological innovations increases the
likelihood of future adoptions of these innovations.
In addition, several other studies are suggested by these
results. First, the potential to test the model in other cultures
appears appealing since several of the constructs identified
in this study may be culturally bound. Specifically, variables
such as cooperativeness, decision-making, and relationship
to authority, which differ by culture, might induce the
models to perform dramatically differently in other cultures.
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