The structure of the firm and the adoption of process innovations

A major body of organizational and management theory indicates that the likelihood of a firm's adopting innovations will vary directly with the firm's complexity and inversely with its centralization and formalization. These hypotheses are tested with data from a nationwide survey on the adoption of process innovations by a stratified random sample of firms in the footwear industry. The results support each hypothesis. The results also indicate that, of the three structural variables, complexity plays the central role in effecting adoption behavior. As complexity represents the general level of managerial specialization and professionalization, the question was asked as to whether particular managerial specialities played a crucial role in determining a firm's adoption policy. This question was investigated with case study data from five footwear firms on the interaction between managers in production, marketing, and engineering. Analysis of these data indicated that the firm's ability to evaluate process innovations and perceive that innovation in production processes offered major profit opportunities was influenced by its employment of engineers and managers in production above the level of plant superintendent. Further analysis of the survey data indicated that the number of managers employed by the firm in either capacity predicted, in a statistical sense, innovation adoption as well as the total complexity variable.