Institutional forces, leapfrogging effects, and innovation status: Evidence from the adoption of a continuously evolving technology in small organizations

Abstract

Although SMEs' innovation adoption has been widely studied, little research has explored how SMEs strategize a continuously evolving technology in a complex institutional context over time. Drawing from institutional perspectives, our case study, based on 44 interviews and field observation, seeks to analyze how institutional forces interact with the Wi-Fi adoption process at three small organizations with different innovation statuses. Results reveal the significance of institutional forces in shaping small organizations' technology adoption process. At the knowledge stage, institutional forces stem from the champion's advocacy and institutional pressures. At the persuasion and implementation stages, they are embedded in organizations' actions in following the institutional trend and complying with institutional norms. At the confirmation stage, they can be observed in organizations' shaping institutional changes or leapfrogging institutional trends. These insights challenge and extend the traditional linear perspective of innovation diffusion and contribute to the literature on technology adoption, digital transformation, innovation leapfrogging, institutional theory, and SMEs. Managerially, we propose three strategic responses (i.e., trend reformulation, service differentiation, complete transformation) that urge SMEs to utilize leapfrogging effects of technologies to renovate their innovation status.