THE ROLE OF INSTITUTIONAL FACTORS IN RADICAL MANAGEMENT INNOVATION DIFFUSION

This study reports managers' attitude towards foreign radical management innovation and conditions under which adoption is likely to occur. Using institutional theory I develop a set of propositions with respect to radical innovation adoption by actors from another geographical, cultural and economic context. The main argument is that institutional factors plays more important role than efficiency concerns in decision making process. Those innovations that join success and get adopted are translated and adapted to local context, losing its most contested and less legitimate elements. In contrast to previous assumptions, this research showed that early adopters are driven by both social and economic gains simultaneously, instead of seeking only for performance improvement.