Adoptability is the probability that an innovation will be incorprated by an organization.

This study explores the question of the adoptability of an innovation for a particular
class of technological innovations, computer applications, within the context of American
local governments. Four conceptual dimensions are explored to determine their likely
independent and interactive influences upon the adoptability of an innovation.

THE ADOPTABILITY OF
INNO VA TIONS
An Empirical Assessment of
Computer Applications
in Local Governments

JAMES L. PER R Y
JAMES N. DANZIGER
University of California, Irvine

As the number of empirical studies of innovations has grown,

increasing concern has been expressed about the unstable, non-
cumulative nature of the findings. These critiques note that
part of the problem is that the research lumped under the rubric
of &dquo;innovation studies&dquo; encompasses an array of different theo-

AUTHORS’ NOTE: The authurs wish to tlrank Irwin Feller for his helpful comments on
an earlier draft of this article. This article is part o/’a research project entitled diffusion
and Adoption of Computer Applications Softwear in Local Governments.&dquo; This project
is supported by a grant to the Public Policy Research Organization and the Graduate
School of Administration from the Division of Policy Research and Analysis of the
National Science Foundation (PRA76-15549). The views expressed herein are those of
the researchers and should not be ascribed to the .National Science Foundation. This is a
revised version of material appearing in James L. Perry and Kenneth L. Kraemer. Tech-
nological Innovation in American Local Government: The Case of Computing, published
by Pergamon Press.

461
462

retical concerns and different

approaches (Downs and Mohr,
1976; Yin et al., 1976; Warner, 1974; Havelock, 1969). In this
study, we explore one of the dominant theoretical questions in
these studies-the adoptability of an innovation. The adopt-
ability question asks: What characteristics seem to affect the
likelihood that one innovation or another will be adopted by an
organization? Our empirical analysis of adoptability focuses
upon a particular class of technological innovations, the use of
computerized applications to accomplish various information
processing tasks.’ The context of our analysis is a particular
class of organizational units, American local governments.

THEORETICAL FRAMEWORK

THE UNIT OF ANALYSIS

The dependent variable in this study is &dquo;adoptability,&dquo; which

is the probability that an innovation will be incorporated by an
organization. A useful conceptual refinement for the study of
adoptability is central to the &dquo;innovation-decision design,&dquo;
proposed by Downs and Mohr (1976: 706). They note that the
adoption of an innovation is contingent upon its organizational
context, and hence the analysis should be based on interactive
measures, in which the unit of analysis is &dquo;the organization with
respect to a particular innovation&dquo; or &dquo;the innovation with
respect to a particular organization.&dquo; They observe:

If we were studying the adoption of 10 innovations by 100 or-

ganizations, we would be working with a sample of 1,000. This

design eliminates any confusion that might stem from volatile
secondary attributes.... A benefit of employing the innovation-
decision design is that it serves to remind us of the dangers of
thinking in terms of something called the organization, a reifi-
cation with constant properties whose probability of adoption
never varies, regardless of the kind of innovation it considers.
~o~~y // focuses
Rather it /bcM~~ our
OMr attention
~f~tOA! on o~ the
~~ shifting
~/!~/~ incentives
/~c~/h~ and
at
constraints that are relevant to the decision to innovate [Downs
and Mohr, 1976: 706; italics added].
 463

While this study does not undertake a precise application of the

design, it does conceptualize and measure the relevant variables
as contingent phenomena.
The data for this study of adoptability are primarily derived
from the recent URBIS survey of local government computer use.
More than 70% of the larger municipal and county governments
(populations greater than 50,000 and 100,000 respectively)
responded mail questionnaire. Each government specified
to a
which of 261 automated applications in 26 functional areas
were currently automated (in 1975). From this list of 261 ap-

plications we selected 10 which are treated as the innovations in

this analysis. The key criterion employed for selecting these
particular applications was to maximize variation in the diffusion
patterns of the applications. This assured a diverse, broad-
range sample of applications, and it also served to maximize
variation in the attributes of the applications.2 Given the 10
applications and the approximately 350 governmental units for
which there were data, our analysis employs an N of about 3500
cases (i.e., 10 innovations x 350 organizations).

DETERMINANTS OF ADOPTABILITY

Because so many different sets of independent variables are

employed in innovation research, selection and operational-

ization of the variables meant to explain variation in adoptability
are problematic. An abundant literature focuses on innovation in
business and industry (Mansfield, 1971; Utterback, 1974). Even
if one examines only the research on public agencies at the local
level, the alternatives are extensive. The study by Yin et al. (1976),
which aimed to examine and codify the many empirical findings
on state and local government innovation, underscores the diver-

sity of explanatory variables. Recent research by Feller and

Menzel (1976, 1975) and by Bingham (1976) also identifies arrays
of variables relevant to the adoption of innovations by local
government organizations. Several recent studies have also ex-
plicitly examined variables associated with the adoption of com-
puter applications by local governments (Perry and Kraemer,
464

1978; Danziger and Dutton, 1977). Appendix A presents a list of

independent variables from the innovation research that seem
relevant to our research problem.
While we are guided by the variables identified in the other
research, we replace the many specific variables with a smaller
number of more abstract dimensions. Employing a small number
of general concepts in the study of adoptability has several
advantages. First, using a small number of abstract dimensions
facilitates the exploration of contingent relationships among key
variables. For example, several studies suggest the plausibility
of interaction among such variables as motivation, resources,
executive ideology, and autonomy (Mohr, 1969; Downs, 1976).
However, these types of contingent relationships become ex-
tremely difficult to isolate when one analyzes a large number
of collinear variables. Limiting the analysis to a small number
of dimensions facilitates the isolation and exploration of such
contingent relationships. A second advantage of using a small
number of general concepts is that it lessens the technical
problems of complex interaction that arise when a large number
of variables is used to study innovation (Downs, 1976: 130).
Consequently, we have organized the independent variables in
terms of four conceptual dimensions on the basis of our analysis
of the literature and the variables in Appendix A. These are:
(1) relation of the innovation to organizational domain, (2) in-
tegration, (3) risk, (4) need.3 These dimensions are explicated in
the subsequent paragraphs.
It is important to specify the relationship of the techno-
logical innovation to an organization’s domain. Domain refers
to an organization’s sphere of activity-that is, the technologies
employed, population served, and services rendered by an organ-
ization (Thompson, 1967). Warren elaborates that domain
&dquo;includes the organization’s access to both input and output
resources ... not only those resources needed for task perfor-
mance ... but also those needed for maintenance of the organi-
zation itself’ (Warren, 1972: 22). Within this broad conceptual
notion, our theoretical concern is to specify the context of use for
the technology, given the organizational domain. In particular, the
 465

technology might be perceived to serve task performance func-

tions and/ or system maintenance functions, it might have either
limited or pervasive impact on the organizational domain, and it
might be used either more or less frequently. Adoption decisions
are likely to vary with the particular relationship of each tech-

nological innovation to these aspects of organizational domain.

The second conceptual dimension, integration, refers to
factors that facilitate the discovery and implementation of an
innovation by the organization. We expect that adoption is con-
tingent upon not only an awareness of the innovation but also
the ability to successfully internalize the innovation into organi-
zational practice (Yin and Quick, 1977). Communication about
the innovation might be facilitated by such factors as linkages
into professional colleague networks and the proximity of
suppliers of the technology. The capacity to successfully im-
plement the innovation might be contingent upon the skill levels
among current staff and upon the compatibility between the in-
novation and other technologies currently employed by the
organization.
The dimension of risk incorporates those factors which
influence the perception that the innovation will produce ex-
pected results.4 Among the factors which might be considered are
the financial costs of the innovation (relative to the organization’s
total budget and relative to other possible innovations), the
availability of slack resources, and the specificity with which
the innovation can be evaluated. The assumption is that organi-
zational decision makers will undertake, directly or implicitly, a
calculation of the expected benefits and costs from adopting a
new technology. The probability of adoption is expected to in-
crease with decreases in the ambiguity of results and in the relative
costliness of the innovation.
The need for an innovation includes both objective factors
and subjective assessments of the organizational requirements to
be met by utilization of the innovation. In the absence of a profit-
ability criterion for selection of public technologies, decision
makers must rely on other indicators of the utility of an in-
novation. Need provides a substitute in the sense that it identi-
466

fies benefits that can be expected from the innovation, given its
functional capabilities. Nelson and Winter (1975) have referred
to these need factors as the &dquo;selection environment&dquo; for an in-
novation. Thus, the adoption of a computerized innovation will
be more likely to the extent that it is responsive to the organi-
zation’s need to perform an information processing task with
greater rapidity, greater complexity, higher volume, or greater
efficiency, or to the extent that managers are optimistic about
its contributions.
For the innovations in this analysis one might hypothesize
various forms of the relationships between adoptability and each
of the four dimensions. We agree with those who suspect that
these relationships might be nonlinear functions (Downs and
Mohr, 1976), but there is little existing research on public sector
innovation to guide our formulation of the configurations that
ought to be expected. Consequently, the broken lines in Figure 1
present our best estimation of these hypothesized relationships.
While we predict a relatively linear relationship between adopt-
ability and the relation of the innovation to organizational
domain, the other three relationships are hypothesized to be
nonlinear. For example, we predict that at some point adopt-
ability will drop precipitously as the level of risk increases. We
also hypothesize that adoptability, at its extremes, will be less
responsive to changes in the integration dimension. Finally, we
expect that the influence of need upon adoptability will be more
substantial when need is high (which will increase adoptability)
than when it is low.

DEVELOPMENT OF THE INDEPENDENT VARIABLES

Three steps were taken to measure the four dimensions we

have specified. First, independent variables relevant to the
innovations in this study were identified and operationalized
(see Appendix A). Second, these independent variables were
classified into the domain, integration, risk, or need categories.
Third, the variables in each group were factor-analyzed in order
to reduce the variables into a smaller number of derived concepts.
 467

Figure 1: Hypothesized and Operational Relations Between the Four Conceptual

Dimensions and Adoptability
~. r

Although the use of factor analysis is to classify variables requires

the exercise of judgment (concerning the fit between the variable
and the more abstract concept), this procedure has important
advantages. It provides for a substantial reduction of the original
data and at the same time assists in the creation of aggregated
although still meaningful constructs based on the original vari-
ables. Moreover, it is possible to treat the factors themselves
as independent variables at an intermediate level of abstraction
between the four conceptual dimensions and the concrete indi-
cators, and thus to assess their capacity to account for variations
in adoptability.
468

Factor analyses of the variable groupings resulted in eight

factors: task-maintenance orientation of the innovation, profes-
sional infrastructure, staff competence, visibility of the innovation,
tructure, staff competence, visibility of the innovation,
supplier proximity, external funding, agency dominance, and
uncertainty. No factor was derived from the need variables, and
therefore the two single indicators were retained for statistical
analysis. The factor loadings for the first three sets of variables
are displayed in Appendix B. Since labeling and interpreting
factor dimensions is judgmental, we briefly discuss below our
interpretation of each of the factors.5
factor, termed task-maintenance
One factor,
One y~A’-~~~a~c~ orientation 0/’ the
or~/a~b~ of //~ in-
/~-
novation, was derived from the four domain variables. This
factor characterizes the application along a continuum from
intensive use in agency task-related activities to occasional use
in organizationwide maintenance activities. A maintenance-
oriented application is exemplified by less frequent generation of
data and use of outputs, by use to service &dquo;house-keeping&dquo;
needs, and by a more pervasive scope of impact on the organi-
zation. In contrast, applications oriented primarily toward task
accomplishment are used more directly in service delivery,
generate and require outputs that are used more frequently, and
have a direct impact on a smaller part of the organization.
Four factors, which we term professional infrastructure, staff
competence, visibility, and supplier proximity, were derived
from the integration variables. The first factor, professional
infrastructure, is defined by the loadings of URISA membership
and URISA conference attendance, and it reflects variations in
what Rogers and Shoemaker (1971) call &dquo;communication inte-
gration&dquo; and &dquo;cosmopoliteness.&dquo; Governments which score
higher on this factor are seen to have more extensive channels
for interpersonal communication with professionalized reference
groups characterized by interest in automated applications.
Staff competence, the second factor, reflects the technical com-
petence attributed to the organization’s data processing staff,
and it is determined by the loadings of staff experience and
staff skill level. Third, the factor termed the visibility of an
 469

application (that is, the amount of attention an application

attracts) is reflected in the loadings of professional communi-
cation and of the relative earliness of an application’s first adop-
tion. Finally, the loadings on the measures of local computer
mainframe suppliers and service/ sales offices on the fourth factor
represent the proximity of suppliers.
Three factors were derived from the risk variables: external
funding, agency dominance, and uncertainty. On the first factor,
the high loadings of the absolute and relative measures of external
funding for electronic data processing (EDP) represent variations
in the provision of financial resources for computing from ex-
ternal sources. The level of external funding may influence the
organization’s capacity for, and thus the attractiveness of, the
investment of resources in new computer applications. Second,
the loadings of absolute and relative expenditure measures for
the particular agency which might adopt the application is termed
agency dominance. On this factor, the relative status of an agency
is inferred from its resource allocation share within the local
government. Third, uncertainty is the name given the concept
derived from the negative loading of cost relative to other agency
applications and from the positive loading of specificity of
evaluation. The loadings indicate that both the relative magni-
tude of investment in an automated application and a knowledge
of how explicitly the results can be evaluated will affect the degree
of certainty that the desired results will be obtained by adopting
the application.
.

..>

RESULTS
z

Our basic objective is to assess the patterns of relationships

between the adoption of computer applications as innovations
and the various explanatory variables. To accomplish this, it is
useful to characterize the direction and form of these relation-
ships and also to identify interactions among the explanatory
variables. The individual components of the integration, risk,
and need dimensions (that is, staff competence, professional
470

infrastructure, and so on) have been normalized and summed so

that these components as well as the conceptual dimensions can
be treated as explanatory variables. Initially, the shape of the
relationships between adoptability and the explanatory variables
is specified graphically. In the second section, regression analysis
is employed to estimate the amount of variance in adoptability
that can be accounted for by the explanatory variables. Finally,
interactive effects among the four conceptual dimensions are
evaluated by using controls that stratify the values on each
dimension.

THE SHAPE OF THE ADOPTABILITY RELATIONSHIPS

First, the shape of the relationships between adoptability and

the component factors of the integration, risk, and need di-
mensions are investigated. (The domain dimension, which is
composed of only one factor, is discussed, along with the other
three dimensions, in the following section.) Graphic represen-
tations of these configurations were developed, using cross-
tabulations between the dichotomized dependent variable and
categorized values on each of the independent variables. These
configurations are presented in Figure 2. The area under each
curve represents the probability of adoption.

Adoptability is not clearly linked with the extensiveness of the

professional infrastructure, a variable which could indicate
the government’s involvement with a social interaction network
that might diffuse information about the innovation (Figure 2a).
There are, however, limited relationships between a higher level
of adoptability and both increased staff competence and greater
proximity of suppliers of the technology. The most critical relation-
ship among the components of integration is the substantial
increase in innovation adoptability when the innovation’s level
of visibility is higher. This linkage suggests that an innovation
has a higher probability of adoption where it has enjoyed greater
attention in professional media and where it was introduced
relatively early. Clearly, these circumstances should make the
innovation more visible and comprehensible to potential adopters.
 471

Figure 2: Operational Relationships Between Adoptability and the Individual Com-

ponents of Integration (I), Risk (R), and Need (N)

There is a clear positive relationship between adoptability and

the risk component of external funding (Figure 2e). Consistent
with many other studies of innovation and with the studies of
computer innovation, the presence of slack resources provided
by an outside funding agency facilitates the adoption of the
innovative device. Although agency dominance has no clear
relationship to adoptability, the risk component we have termed
uncertainty has a most interesting configuration. From the
472

mid-low levels to the high levels of the uncertainty variable, the

relationship of uncertainty to adoptability is fully consistent
with the reasonable expectation-the probability of adoption de-
creases with increased uncertainty about the cost-benefit ratio
and the likely success of the innovation.
However, adoptability also drops sharply at the lowest levels
of uncertainty. That is, where the cost of the automated ap-
plication (relative to the cost of others) is low and where quite
specific evaluation of the application is possible, the probability
of adoption is reduced. There is no obvious explanations for this
unexpected finding regarding adoptability and low uncertainty.
Perhaps there is a type of trivializing-the-innovation rationale
among adopters which leads to the conclusion that if the magni-
tude of costs and benefits is small, then the innovation is not
worth the effort. A more plausible explanation is that the very
fact that specific evaluation of the innovation can be undertaken
is viewed by potential adopters as a negative factor. If the poten-
tial adopter believes that a clear assessment of shortcomings in
production efficiency could be undertaken, the innovation might
seem less desirable since a &dquo;failure&dquo; would be difficult to obfuscate

(Feller, 1977). Whatever the underlying dynamic, the shape of the

relationship at the low end of uncertainty is somewhat surprising.
The perceived effectiveness of the user represents a subjective
appraisal, by the chief executive, of a specific agency’s production
efficiency in the use of automated applications. The relationship
in Figure 2i reveals that further adoptions are most likely in those
agencies that are judged to have been most effective in applying
computer technology in the past. A record of effectiveness might
heighten the agency’s perception that it needs further automated
applications, and/ or it might dispose top managers to support
the manager’s expanded use of automation, viewing it as cost-
effective and need-driven. The objective measure of need for each
specific automated application reveals that, across the entire set of
innovations, increased need is related to increased adoptability
only at the lower levels of need.
 473

Integration Dimension

The configurations of the adoptability-conceptual dimension

operational relationships are displayed in Figure 1. It is clear
that only the curve for the integration dimension closely cor-
responds to our expectations. Except at the lowest and highest
levels of integration, adoptability increases as a relatively linear
function of greater integration. Adoption decisions do seem to be
responsive to the basic capacity of the organization to discover,
comprehend, and implement the automated application.

Organizational Domain Dimension

The operational relationship between adoptability and the

innovation’s relation to organizational domain in Figure I is
particularly intriguing. Rather than the expected linear rela-
tionship, the actual configuration is roughly an inverted U. This
curvilinear relationship suggests that innovations which relate to
either purely task aspects or purely maintenance aspects of an
organization’s domain are less likely to be adopted than those
innovations which serve both task and maintenance functions.
The task end of this dimension, it should be recalled, involves
applications which impact primarily upon the particular agency,
which do not disturb organizational arrangements, and which
respond to frequently recurring information processing needs of
the unit. From a bureaucratic self-interest perspective, this is the
type of innovation that would, ceteris paribus, be most attractive
to the agency. But the scarcity of EDP resources in most local
governments and the value attributed by resource allocators to
&dquo;organizationwide&dquo; efficiencies often result in a bias toward
developing applications that benefit a wider spectrum of govern-
ment actors. Given these intraorganizational realities, it is
plausible that the most generalized support and the highest pri-
orities would tend to gravitate toward those applications which
appear to serve a mixture of maintenance and task-oriented
functions. And this is what Figure 1 a suggests. While some highly
task-oriented applications have a reasonable probability of
474

adoption, it is the middle ranges of this dimension where the

incidence of adoption is highest.

Risk Dimension

The form of the risk relationship bears only partial similarity

to the relationship hypothesized in Figure 1. Through the middle
range of risk, adoptability does decrease with increasing risk,
although not as precipitously as anticipated. At high levels of
risk, however, adoptability remains relatively constant with in-
creasing risk. These data are consistent with Feller’s (1977)
suggestion that innovators in public agencies are not particularly
risk averse, since institutional characteristics in the govern-
mental context minimize the chance that innovation &dquo;failures&dquo;
will be discovered and/ or that those responsible will be identified
and sanctioned. However, at lower levels of risk, adoptability
actually decreases with decreasing risk. The shape of the relation-
ship with low risk seems to be substantially influenced by the
unexpected association between adoptability and uncertainty
discussed above. Thus, the pattern in Figure I reinforces the
inference that low-risk innovations tend to be viewed either
as ones likely to generate substantial benefits or as ones with

potentially high costs to the adopting agency because impacts can

be evaluated so unambiguously that the identification and
attribution of failure is probable.

Need Dimension

The fourth relationship in Figure 1, between need and adopt-

ability, roughly similar to the pattern hypothesized. Adopt-
is
ability, a positive function of need at the lower range of the
is
need values. But it levels off and then has only a slightly positive
association across most of the need dimension. This suggests that,

beyond the lower range of need, other factors are more critical
than the level of need in determining whether a government
will adopt a particular innovation application. While the agency
is likely to ground its advocacy for an automated application
 475

in factors of objective need and production efficiency, the de-

velopment and implementation of new applications does not
seem particularly contingent upon increased need across most of

this dimension.

STATISTICAL ASSESSMENT OF THE RELATIONSHIPS

The strength and significance of the associations between

adoptability and the variables in Figures I and 2 can be further
assessed by the use of statistical techniques. Initially, zero-order
correlations between adoption and each of the independent
variables were computed. Of the variables in Figure 2, all were
statistically significant (at the .001I level) except professional
infrastructure and agency dominance.
The graphic analyses in Figure 2 suggested that some of the
bivariate relationships might be nonlinear. Consequently, certain
transformations were attempted for the variables of domain,
visibility, uncertainty, and need.6 An exponential transformation
did not markedly improve the relationship of visibility with
adoptability, and a transformation of the need variable improved
its correlation with adoptability slightly (from +.06 to +.09). A
transformation of the domain variable altered its correlation with
adoptability from .03 to -.07. And there was a quite substantial
improvement in the correlation between adoptability and the
transformation of the uncertainty variable. This association in-
creased from -.13 for the original values to -.32 for a trans-
formation accounting for the curve at the low uncertainty level.
Clearly, it is difficult to specify an optimal transformation
through inspections; but these results reinforce the inference from
the graphic analyses that some significant determinants of
adoptability are nonlinear.
To evaluate the independent contributions of the individual
component variables of the integration, risk, and need dimen-
sions, multiple regression techniques are useful.7 Individual
regression analyses for the component variables of each dimen-
sion, taking adoption as the dependent variable, revealed that
integration is the most powerful explanatory dimension, given its
476

capacity toexplain 15% of the variance in adoptability (as

measured by the R2 statistic). Among the component factors of
integration, visibility of the innovation is the most significant
one. Consistent with earlier inferences, there is a considerable
increase in the probability of adoption for an innovation which
has been the subject of more extensive professional communi-
cation and which has had an earlier introduction. The risk
dimension explains 10% of the variation in adoptability and is
primarily a function of the transformed uncertainty factor, whose
quite significant association with adoptability was noted above.
The components of the need dimension have minimal explana-
tory power regarding adoptability, accounting for only 1 % of the
variance.
Utilizing all the significant component variables in a single
regression analysis revealed that there are substantial, indepen-
dent contributions to adoptability from the variables identified
earlier as important.8 The probability of innovation adoption
tends to increase where: ( 1 ) the innovation is more visible; (2)
there is less uncertainty regarding its evaluation and cost; (3)
the innovation is more maintenance-oriented than task-oriented;
(4) there is greater objective need (in a production efficiency
sense) for the innovation; and (5) suppliers of computer services
are more proximate to the adopting government. The optimal
linear combination of these variables, along with several others
(that were not statistically significant), explained 25% of the
variance in adoptability. Thus, a parsimonious set of variables
does account for a considerable amount of the variation across
a quite diverse range of computer applications. And if there are

contingent relationships among the explanatory variables, it is

likely that a linear model underestimates the variance explained
by these four dimensions. Given this possibility, it is useful to
explore the conditional relationships among the four conceptual
dimensions.
 477

ASSESSING INTERACTIONS AMONG THE FOUR DIMENSIONS

To test for interactions among the four dimensions in their

associations with the adoptability of innovations, each dimension
was stratified into high and low categories. The criterion for
inclusion in either category was to include only those values more
than one-half standard deviation above or below the mean. That
is, the data in each part of Table I are based on only those cases
which met this criterion on the relevant stratifying variable. The
table reports the fraction of explained variance (the R2) in adopt-
ability accounted for by each of the other three dimensions,
stratifying on the fourth. In interpreting these relationships, we
can explore the extent to which interaction exists between any
two of the conceptual dimensions, but we cannot infer causality
in the relationship between the dimensions.

Organizational Domain

When the organizational domain variable is used to stratify

the cases, there are several striking results. Table I reveals that
the relationship between adoptability and the need dimension is
not contingent upon the domain dimension; but the effect of or-
ganizational domain on the explanatory power of the other two
dimensions is substantial. The integration dimension is able to
explain about 50% more variance when the task-maintenance
orientation values are low than when they are high. And a quite
dramatic difference occurs with the risk dimension, where the Rz2
for adoptability and risk is only +.02 for low values of the domain
dimension but is +.44 for high values.
These results suggest that when an application relates to task
accomplishment aspects of an organization’s domain (that is,
when the innovation primarily serves a recurrent task activity
within a single agency), factors relating to the visibility and
successful implementation of the innovation are particularly
important. But the level of risk and, we infer, the magnitude of
benefits relative to costs and the probability of failure have no
consistent linear effect on decisions regarding such task-oriented
478

TABLE 1
R2 s for Three of the Dimensions when Stratified by
Scores of the Fourth Dimension

applications. These findings are consistent with Feller’s conten-

tion that consideration of the cost-benefit shortcomings of an
innovation is not necessarily a major constraint when the in-
novation is internal to the agency. Since the innovation tends to
impact only the specific agency (in our analysis, a task-oriented
application), the agency is able to cover the failure of an in-
novation. Feller argues that for such an innovation, failure is
most likely to be defined in terms of failure to implement suc-
cessfully, rather than shortcomings in eventual benefits. Thus,
the motivation to adopt the task-oriented innovation relates more
to implementation issues (integration) than to impact con-
siderations (risk).
When one examines the more maintenance-oriented in-
novations as opposed to the task-oriented ones, risk becomes the
 479

critical dimension. While the implementation considerations

inferred from the integration dimension have some influence, the
concern with magnitude of costs relative to benefits and with

uncertainty of impacts is central. One explanation of the cen-

trality of risk to maintenance-oriented applications pivots upon
the composition of &dquo;interested and attentive parties&dquo; to such an
innovation. When the application is maintenance-oriented, it will
have direct or indirect impacts on a wider spectrum of actors
both within and external to the agency primarily responsible for
its utilization. For example, an automated current balance report
system implemented by the finance department will generate
financial information which is distributed to all operating
agencies. Thus there are multiple actors who attend to the impacts
of the innovation as it is routinized and who are capable of
evaluating the substance and quality of its impacts. Given the
existence of multiple actors who can assess impacts, the adopting
agency is likely to be considerably more concerned that the
inadequate performance of an innovation could be discovered
and communicated. In this case, those who are most accountable
for the innovation’s impacts (and who are typically the pivotal
adovcates for adoption) will tend to be much more responsive to
considerations of risk.

Integration
When cases are stratified on the basis of high and low scores
on the integration dimension, other types of interactions are
evident. The relationship between adoptability and the level of
integration does not seem to be contingent upon either the
organizational domain or the need dimensions. But risk accounts
for a substantially greater proportion of the variance in adopt-
ability when integration is high rather than low. Higher inte-
gration implies that there is more visibility, comprehension, and
staff competency regarding the implementation and use of the
innovation. In such cases, it should be possible to make a more
accurate assessment of the implications of risk and also to react
more &dquo;rationally,&dquo; or at least more sensibly, to those implications.
480

But where integration is low, there is limited understanding and

technical insight about the innovation, and adoption decisions
are likely to be more strongly influenced by criteria or attitudes
that ignore or misperceive the factors of risk. Thus, high inte-
gration is likely to complement the importance of risk, but low
integration might limit its salience to adoption decisions.

Risk

The risk dimension has limited interactive effects with two of

the three conceptual dimensions in their relationship with adopt-
ability. The need dimension is not systematically associated with
adoptability at either the high or the low levels of risk. And the
integration dimension seems to be an important explanator of
adoptability regardless of whether risk is high or low. However,
stratifying the cases by risk underlines the interaction effects
between risk and the relation to organizational domain. Under
conditions of high risk, the domain orientation of the automated
application accounts for very little variance in adoptability.
That is, neither task- nor maintenance-oriented innovations are
more consistently deterred when risk and uncertainty about

impacts are high. But when risk is low, relation to domain ac-
counts for 15% of the variance. Specifically, the probability of
adoption of the more maintenance-oriented innovations in-
creases if they are low risk. This is futher evidence that, as
the impacts of an innovation are more pervasive and there are
more interested and attentive parties, adopters are most favor-

ably disposed toward those innovations characterized by a

minimum of risk to the adopting unit.

Need

When the cases are stratified by need, there is no alteration in

the relationship between adoptability and organizational do-
main ; but the integration and risk variables are affected by the
level of need. The integration dimension explains twice the
variance in adoptability when need is low than it does when need
 481

is high. It seems that the innovation’s visibility, staff competence,

and supplier proximity are likely to create some pressures and/ or
inducements for adoption even when there is little apparent need
(as measured by a specific production-efficiency indicator). In
contrast, at high levels of need the decision to adopt is less con-
tingent upon the level of integration in the organization. There
is also slight evidence that when need is greater, there is more
willingness to take larger risks in the attempt to realize the
potential benefits of the innovation. High need moderates the
constraint of greater risk, and the level of integration becomes
a more important factor when need is low. Finally, need has no

systematic influence on the adoptability-organizational domain

linkage. As in the early analyses, Table I provides little evidence
that innovation decisions are particularly contingent upon need.

CONCLUSIONS

In the life history of an innovative within an organization,

the adoption decision is only the beginning. But it is the sine qua
non of all innovative activity, and thus an adequate under-

standing of the adaptability issue is an important research con-

cern. This article has been an empirical analysis of the deter-
minants of the adoptability of a range of technological inno-
vations. The concept of adoptability refers to the probability that
a particular innovation will be adopted by an organization, and
the primary concern is to specify those attributes of the innova-
tion or of the organization which seem to affect that probability.
The technological innovations that have been examined in this
article are an array of ten specific computer applications used by
American local governments on a variety of functions. These
automated applications have ranged from automated alias name
files in police departments to applications which perform cash
flow analyses for financial managers. The methodological frame-
work has been grounded in recent refinements in innovation
research, especially with respect to the measurement of attri-
butes which are contingent upon the relationship between the
particular innovation and the particular organizational context.
482

At a findings in this analysis have been

substantive level, many
quite intriguing. Initially, four broad conceptual dimensions
which might explain variations in the adoptability of innovations
were identified and operationalized. These dimensions reflected
the relation of the innovation to the organization’s domain, the
capacity of the organization to integrate the innovation, the level
of risk attached to the innovation, and the organization’s need
for the innovative. Given these dimensions, a large set of relevant
explanatory variables were reduced into a smaller set of derived
factors that characterized aspects of each dimension. Of the eight
individual factors and two variables of need which were then
created, most (seven of the ten) had associations with innovation
adoptability that were statistically significant. Further analysis,
which regressed all these factors in a single analysis, revealed
that four were particularly important. The data revealed that
higher probability of adoption for a particular innovative com-
puter application is associated with: ( 1 ) greater visibility of the
innovation; (2) less uncertainty about the cost and evaluation of
the innovation; (3) greater EDP staff competence to implement
the innovation; and (4) a higher level of objective need for the
innovation.
When a combination of graphic and statistical analyses were
undertaken on the four conceptual dimensions, interesting dif-
ferences were revealed. The data revealed that innovations adopt-
ability increases as a function of greater organizational inte-
gration. Of the four dimensions, the integration dimension has
the highest independent explanatory power for variation in
adoptability of the innovations, and it is also the most obviously
linear of the four dimensions. Moreover, if one examines the
components (factors) of integration, it is evident that an in-
novation’s adoptability is particularly influenced by its visibility
and by the level of EDP staff competence. These findings are fully
consistent with the multiple regression noted above. With respect
to the dynamics underlying the process, it seems that the greater
visibility of the innovation both increases the attention local
actors accord to the innovation and enhances the adopter’s sense
that they understand its implications for their government’s
 483

operations. Higher competence among EDP staff also seems to

increase the level of local awareness about the innovation, and it
raises the level of conviction among local actors that the in-
novation can be successfully developed and implemented.
The risk dimension also displays considerable explanatory
power for variation in adoptability among innovations in their
particular organizational contexts. This dimension’s effect cor-
responds broadly to the intuitive notion that as risk is greater-
that is, as there is more uncertainty about an innovation’s cost
and benefits and as there is greater dependence on internal funding
to support the innovation’s development-the probability of
adoption tends to diminish. However, a more surprising finding is
that at the lower levels of risk there is also a reduction in adopt-
ability. We offered several plausible explanations for this finding,
primarily relating to the view that the risk constraint might
operate in peculiar ways to public organizations. This view
suggests that decisions which are low-risk but are easily evaluated
by external actors are somewhat unattractive to public agencies.
These intriguing relationships between innovative and risk, which
are explored further in the next paragraph, clearly merit ad-
ditional research.
It is also evident that adoptability varies substantially with
respect to the organizational domain dimension. The graphic
representation suggests that an innovation is most adoptable when
it satisfies a mixture of task and maintenance functions. Such an
application is desirable to the individual unit most directly served,
since both advocacy of and responsibility for the innovation can be
spread, and yet the unit remains the primary beneficiary of the
innovation. And this kind of adoption is likely to be supported
by other units which enjoy at least indirect benefits and by central
decision makers who might see the adoption as serving broader
organizational interests. It is the more pervasive, maintenance-
oriented applications that are most powerfully influenced by the
level of risk, since multiple actors are in a position to evaluate
the effectiveness of the innovation and of the adopting agency’s
utilization of it. While a more risky maintenance-oriented ap-
plication is likely to find few promoters, a risky task-oriented
484

innovation might be advocated by an agency which reckons that

no outsiders will be capable of evaluating the agency’s success
or failure. Indeed, among task-oriented applications, the least

adoptable ones are those subject to the most specific and un-
ambiguous impact eveluation.
The fourth dimension, need, has the weakest associations with
adoptability. Our specific measures of objective need for the
applications (relative to other local government’s needs for the
same application) might indicate the production efficiency (or
selection environment) for the innovation. The multiple regres-
sion equation reveals that greater need has a small but significant
coefficient with respect to higher probability of adoption. But
the broader inference from the data is that the need dimension
is much less critical to variance in adoptability than are the
domain, integration, and risk dimensions.
From a public policy perspective, it seems that the adoptability
of this class of innovations is responsive to some variables which
can be manipulated by interventions. In particular, adoptability
can be enhanced if high risk can be moderated, especially for

high-need innovations. This might be accomplished by the

provision of considerable external funding support for the in-
novation or by lowering the relative cost of the application in
some other manner (such as the operation of an effective program
for softwear transfer). Secondly, adoptability also seems to be
quite affected by the visibility of the innovation. Thus, an innova-
tion is more likely to be adopted to the extent that communica-
tion about it is facilitated within professional peer networks or
that an efficient information &dquo;clearinghouse&dquo; for automated
systems is instituted. Third, these findings suggest that the dy-
namics among key determinants of adoptability differ between
task- and maintenance-oriented applications. Hence, attempts to
manipulate the integration dimension for task-oriented ap-
plications and the risk dimension for maintenance-oriented ap-
plications have higher probability of stimulating adoption
decisions.
Finally, this analysis has noteworthy implications for con-
ceptual and theoretical issues in innovation research. The re-
 485

duction of a large of specific independent variables into a

set
parsimonious group of explanatory factors and four &dquo;super-
dimensions&dquo; has demonstrated one means to make analyses more
manageable and yet retain meaningful concepts. It is significant
that the relationships between adoptability and three of the four
conceptual dimensions (relation to organizational domain, risk,
and need) were clearly nonlinear. Integration is the only ex-
planatory dimension that had a relatively linear relationship with
adoptability. These findings underline the methodological
problems of empirical studies of innovation adoptability that
rely upon statistical techniques measuring linear relationships.
We had modest success in specifying the relationship between
adoptability and a transformation of the risk variable; but the
effective use of variable transformations and nonlinear models
in innovation research requires much attention. It is also clear
from our analysis that the application of the types of interactive
measures consistent with the innovative-decision design is
feasible and that the design is a promising framework for develop-
ing more valid and generalizable findings across a class of in-
novative devices. Innovation research might become more co-
herent to the extent that these kinds of conceptual refinements
are applied with consistency in forthcoming empirical studies of

adoptability.

NOTES

1. The concept of "information processing task" is an analytic taxonomy which is

based on the primary modality of an automated application. It is discussed in Kraemer
et al. (1976) and Danziger (1977).
2. The ten computer applications selected, indicative of six empirically derived dif-
fusion patterns, were: (1) library periodical holdings, (2) data-processing data dictionary,
(3) federal and state grant file(s), (4) alias name file, (5) cash management/cash flow
analysis, (6) wants/ warrants file, (7) employee records, (8) program structure related to
line-item budget, (9) payroll preparation/accounting, and (10) real property records.
Since the number of applications associated with each of the original categories of dif-
fusion patterns were unequal, the selection procedure resulted in a disproportionate
stratified sample. This procedure was used to avoid the type of selection bias identified by
486

Downs and Mohr ( 1976) and by Warner ( 1974). For a discussion of selection bias in
innovation research, the development of the empirically derived diffusion categories
and their description, see Perry and Kraemer (1978).
3. The choice of these dimensions is based on an analysis of the empirical studies of
Bingham (1976) and Feller and Menzel (1976) and the research critiques of Warner (1974)
and Downs and Mohr (1976).
4. See Fliegel and Kivlin (1966: 244). Our definition of risk differs from the classical
economic use of risk in that it does not incorporate decision maker utilities or preferences.
Rather, as it is used here, risk focuses on factors likely to influence decision maker cer-
tainty and concern about cause-effect relationships associated with the innovation’s costs
and benefits. For a discussion of risk and innovation in state and local government, see
Feller (1977).
5. Principal factoring with iterations was used to derive the factors in Appendix B.
This method is based on the assumption of underlying commonalities among the vari-
ables. An orthogonal rotation in which estimates of commonalities were placed in the
main diagonal of the correlation matrix was used to simplify the factor structure. All
factors with an eigenvalue of less than I were deleted. The eigenvalue for each factor is
presented in Appendix B. Separate factor analyses were performed for each group of
variables associated with a particular conceptual dimension.
6. Such data transformations are discussed in Kruskal (1972: 182-192).
7. Multiple linear regression was used to explore the predictive power of the variables
associated with the four conceptual dimensions. Although transformations of particular
variables partially compensate for the linear relationships assumed by regression, they
cannot overcome all the prediction problems associated with nonlinear relationships.
Therefore, we do not report or discuss these regression results at length. Future studies
may achieve better predictions by using more sophisticated nonlinear regression models.
8. The standardized beta coefficients and constants for this summary regression
were: -.26 +.19 domain +.03 staff competence +.32 visibility +.05 supplier proximity +.02

external funding -.33 uncertainty + .07 need. The F-levels for the domain, visibility, un-
certainty, and need factors were significant at p < .01. Supplier proximity was significant
at p < .025.

REFERENCES

BINGHAM, R. D. (1976) Technological Innovation in Local Government. Lexington,

MA: D. C. Heath.
DANZIGER, J. N. ( 1977) "Computers, local governments, and the litany to EDP." Public
Administration Rev. 37 (January/February): 28-37.
DANZIGER, J. N. and W. H. DUTTON (1977) "Technological innovation in local
government: the case of computing." Policy and Politics 6 (September): 127-149.
DOWNS, G. W. (1976) Bureaucracy, Innovation and Public Policy. Lexington, MA:
D. C. Heath.
DOWNS, G. W. and L. B. MOH R (1976) "Conceptual issues in the study of innovation."
Admin. Sci. Q. 21 (December): 700-714.
 487

FELLER, I. ( 1977) "Uncertainty and risk in the adoption of technological innovations

by state and municipal governments." Institute for Research on Human Resources,
University Park, Pennsylvania. (mimco)
FELLER, I. and D. C. MENZEL (1976) Diffusion of Innovations in Municipal Govern-
ments. Institute for Research on Human Resources, University Park, Pennsylvania.
---

(1975) "Diffusion milieux as a focus of research on innovation in the public sec-

tor." Presented at the annual meeting of the American Political Science Association,
San Francisco, September 2-5.
FLIEGEL, F. and J. KIVLIN (1966) "Attributes of innovations as factors in diffusion."
Amer. J.of Sociology 82 (November): 235-248.
HAVELOCK, R. (1969) Planning for Innovation Through Dissemination and Utilization
of Knowledge. Ann Arbor: Univ. of Michigan, Institute for Social Research.
HICKSON, D. H., D. S. PUGH, and D. C. PHEYSEY (1969) "Operations technology
and organization structure: an empirical reappraisal." Admin. Sci. Q. 14 (September):
378-397.
KRAEMER, K. L., J. N. DANZIGER, W. H. DUTTON, A. MOOD, and R. KLING
( 1976) "A future cities survey research design for policy analysis." Socio-Economic
Planning Sciences 10 (September): 199-211.
KRUSKAL, J. B. (1972) "Statistical analysis: transformations of data," pp. 182-192 in
International Encyclopedia of the Social Sciences. New York: Macmillan and Free
Press.
MANSFIELD, E. (1971) Technological Change. New York: Norton.
MOHR, L. B. (1969) "Determinants of innovation in organizations." Amer. Pol. Sci.
Rev. 63 (March): 111-126.
NELSON, R. and S. WINTER (1975) "Growth theory from an evolutionary perspective:
the differential productivity puzzle." Amer. Econ. Rev. 65 (May): 338-344.
PERRY, J. L. and K. L. KRAEMER (1978) "Innovation attributes, policy interventions,
and the diffusion of computer applications among local governments." Policy Sciences
9 (April): 179-205.
ROGERS, E. M. and F. F. SHOEMAKER (1971) Communication of Innovations. New
York: Free Press.
THOM PSON, J. D. ( 1967) Organizations in Action. New York: McGraw-Hill.
UTTERBACK, J. M. (1974) "Innovation in industry and the diffusion of technology."
Science 183 (February): 620-626.
WARNER, K. E. (1974) "The need for some innovative concepts of innovation: an exami-
nation of research on the diffusion of innovations." Policy Sciences 5: 433-451.
WARREN, R. (1972) "The concerting of decisions as a variable in organizational inter-
action," pp. 20-32 inM. Tuite et al. (eds.) Interorganizational Decision Making.
Chicago: AVC.
YIN, R. and S. K. QUICK (1977) "Routinization I: thinking about routinization." Rand
Corporation, Santa Monica, California. (mimeo)
YIN, R., K. HEALD, M. VOGEL, P. FLEISCHAUER, and B. VLADEK (1976) A
Review of Case Studies of Technological Innovations in State and Local Services.
Washington, DC: Rand Corporation.
488
489
490
491
492

James L Perry is Asso(-iate Professor of Administration in the Graduate School

of Administration at the University of Cal(fornia, Irvine. He has authored and
coawhored articles appearing in American Political- Science Review, Indus-
trial Relations, Policy Sciences, Western Political Quarterly, and Public Ad-
ministration Review. The research in he is currelllly engaged includes
studies OrJ»1101’at1017 in local goB’emment and of llle impact 01’labor-i?7a?iageitieiii
relationships on g01’ernl77elTlal efficiency and C’/~/~e(’lIl~PI7PS.s..
James N. Danziger is Associate Professor o/’ Political Science in the School of
Social Sciences at the University of California, Irvine. His research on local
goaernment decision-making is i17lernatiullal in scope, and his rurrem research
interests are focused on the impacts of computer technology on decision-making
and UI1 operation in loc-al got,erpilyieiii. He is the author o/~ Making Budgets:
Public Resource Allocation and has published articles in books and professional
juurnals on the suhjec’ts ol’biit4getar.i, decision-making, policy anal_n.sis, and the
use and impacts of computer technulogy.