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Strategic Adoption of a New Technology under Uncertain Implementation

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  • Marcel Boyer

    ()

  • Séverine Clamens

Abstract

American corporations will spend some $50 billion US in 1997 on reengineering projets. It is believed that two thirds of these efforts will end up in failure because of significant resistance to change and a lack of concensus and commitment among senior executives. Very little effort has been exerted to foster our understanding of the strategic differences between adopting and implementing a new technology. Building on a model first proposed by Stenbacka and Tombak (1994), we show how the adoption timing decisions in a sequential duopoly structure are affected by more efficient implementation programs, higher relative gains of being the first (and second) to successfully implement the technology, and lower relative investment costs of adopting the new technology. Les entreprises américaines investiront en 1997 quelque 50 milliards de $ dans des projets de réingénierie dont les deux-tiers s'avéreront, semble-t-il, des échecs, à cause principalement de la résistance au changement et du manque de concensus et d'engagement de la part des hauts dirigeants. Or, notre connaissance des différences stratégiques entre l'adoption d'une nouvelle technologie et son implantation réussie reste fort limitée. Nous inspirant d'un modèle proposé par Stenbacka et Tombak (1994), nous considérons les effets de divers facteurs sur les dates d'adoption de la nouvelle technologie choisies par les doupoleurs, tels de meilleurs programmes d'implantation, des gains relatifs plus élevés d'adopter en premier (et en second), et des coûts d'investissements à l'adoption plus faibles.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 97s-40.

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Date of creation: 01 Nov 1997
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Handle: RePEc:cir:cirwor:97s-40

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Related research

Keywords: Technology adoption; implementation; duopoly; Adoption de technologie; implantation; duopole;

References

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  1. Boyer, Marcel & Robert, Jacques, 2006. "Organizational inertia and dynamic incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 59(3), pages 324-348, March.
  2. Boyer, Marcel & Moreaux, Michel, 1996. "Capacity Commitment versus Flexibility," IDEI Working Papers 63, Institut d'Économie Industrielle (IDEI), Toulouse.
  3. Burkart, Mike & Gromb, Denis & Panunzi, Fausto, 1997. "Large Shareholders, Monitoring, and the Value of the Firm," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 693-728, August.
  4. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
  5. Friebel, Guido & Raith, Michael, 2000. "Strategic Recruiting And The Chain Of Command," CEPR Discussion Papers 2429, C.E.P.R. Discussion Papers.
  6. Parente Stephen L., 1994. "Technology Adoption, Learning-by-Doing, and Economic Growth," Journal of Economic Theory, Elsevier, vol. 63(2), pages 346-369, August.
  7. Mathias Dewatripont & Jean Tirole, 1996. "Biased principals as a discipline device," ULB Institutional Repository 2013/9611, ULB -- Universite Libre de Bruxelles.
  8. Stenbacka, Rune & Tombak, Mihkel M., 1994. "Strategic timing of adoption of new technologies under uncertainty," International Journal of Industrial Organization, Elsevier, vol. 12(3), pages 387-411, September.
  9. Boyer, M. & Moreaux, A., 1989. "Uncertainty, Capacity and Flexibility: the Monopoly Case," Cahiers de recherche 8911, Universite de Montreal, Departement de sciences economiques.
  10. Smith, L, 1996. "Social Learning in a Changing World," Working papers 96-34, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Rothschild, Michael, 1971. "On the Cost of Adjustment," The Quarterly Journal of Economics, MIT Press, vol. 85(4), pages 605-22, November.
  12. Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321.
  13. Cremer, Jacques, 1995. "Arm's Length Relationships," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 275-95, May.
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