Technology Adoption: Organizational Learning in Oil Firms

Abstract

What makes the adoption of technology in some firms a successful process, while others experience difficulties? Based on a retrospective case study, this paper compares the process of adopting horizontal drilling technology in two large Canadian oil companies; one a more successful and the other a less successful adopter of technology. Adoption is viewed as a process of organizational learning which proceeds in a feedback loop from observing, interpreting, integrating to acting. The two companies differed both in these processes and in the factors facilitating or impeding them: capability, resources, motivation, effort, shared values, incentives, and external triggers. The implications for researchers and managers are discussed.

Descriptors: technology adoption processes, organizational learning, oil industry

Introduction

Business firms adopt new technologies -- a form of innovation (Angle and Van de Ven 1989) -- to remain competitive (Morone 1993), or to 'renew strategically' (Crossan et al. 1999). However, some firms seem to manage technology adoption successfully, while others struggle and even give up. Why this is so was the initial puzzle that prompted the study reported here. The study identified technology adoption in two firms essentially as a process of organizational learning. The success of technology adoption therefore depends on the firm's ability to learn. In other words, in order to explain success in technology adoption, sources of learning need to be understood. The explanation is elaborated in a framework that focuses both on sources of learning and on the learning processes (Dodgson 1993). The focus on the processes of learning in this paper is an important extension of the technology adoption literature which tends to be static in its analysis and to focus primarily on predictors and consequences of technol ogy adoption (e.g. Cooper and Smud 1990; Dewar and Dutton 1986; Ettlie et al. 1984; Preece 1989). The proposed framework is derived from the literature on organizational learning and innovation, and it is validated by a comparative field study of technology adoption in two large oil firms.

To integrate divergent approaches to organizational learning (e.g. Crossan et al. 1999; Dodgson 1993; Huber 1991; Kim 1993) and thereby increase the explanatory power of the framework, I considered both sources and processes of organizational learning and their interaction.

Organizational Learning: The Framework for Technology Adoption

Most research on technology adoption has focused either on predictors or consequences of adoption. Firm size (Dewar and Dutton 1986), production methods (Cooper and Smud 1990), and market structure (Hannan and McDowell 1990) have been found to predict technology adoption. Increased flexibility and control (Child 1987; Preece 1989) have been identified as some of the consequences of technology adoption. Organization structure appears to be both an antecedent and a consequence of technology adoption. On the one hand, organizations with centralized structures have been found to be more likely to adopt new process technologies (Ettlie et al. 1984). On the other hand, Woodward (1965) found that adopting a particular kind of technology (e.g. unit, mass or process production) led to changes in organizational structure (e.g. functional vs. line-staff structure). While understanding these predictors and consequences is illuminating in itself, they do not shed light on the differences between more and less successful a doption processes.

Research on technology adoption processes is rare. Existing studies have primarily explained the process as one of political influence (e.g. Dean 1987; Pettigrew 1973). Many have focused on the role of technology champions or promoters (Burgelman 1983; Howell and Higgins 1990; Kanter 1983; Roberts 1977). The most comprehensive of the process studies, to my knowledge, is a study of technology adoption in small manufacturing firms by Langley and Truax (1994). They go beyond the political models and provide detailed descriptions of adoption processes in five firms. They also describe the contextual elements impinging on these processes. Langley and Truax do not, however, address success of adoption. The literature on organizational learning allows the deepening and broadening of our understanding of technology adoption, beyond the political processes and the role of individual champions. It also allows us to address success of adoption.

The literature offers several definitions of organizational learning, reflecting the divergent nature and lack of consensus in the research. Some have emphasized the behavioural aspect of learning, i.e., learning is understood as a change in behaviour in response to a stimulus (Cyert and March 1963; Daft and Weick 1984; March and Levitt 1988). Others have suggested that learning also requires a conscious acquisition of knowledge (Argyris and Schon 1978; Huber 1991; Miller 1996). More recently, it has been suggested that organizational learning links cognition and action (Crossan et al. 1999; Dodgson 1993; Senge 1990). Viewed in this way, for learning to take place at the organizational (as opposed to the individual) level, two conditions must be met. First, information needs to be acquired and processed (as well as shared), and second, an outcome in terms of action has to occur.