2012

RESEARCH
Diffusion of Innovations
The main purpose and aim of this research project is to measure the degree to adopting change specifically in the context of information technology by using Rogers Theory of diffusion of innovation. Also it is a pre-requisite of MBA course METHOD IN BUSSINESS RESEARCH.

12/29/2012

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PROJECT PROPOSAL
Project Name: Diffusion of innovations in the context of information systems. Date: December 29, 2012

Project Title
Diffusion of innovations in the context of information systems.

Scope
The main purpose and aim of this research project is to measure the degree to adopting change specifically in the context of information technology by using Rogers Theory of diffusion of innovation. Also it is a pre-requisite of MBA course METHOD IN BUSSINESS RESEARCH.

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IN THE NAME OF ALLAH THE MOST GRACIOUS AND MERCIFUL

Dedicated To Our Teachers whose teaching and enlightenment inspired and enabled me to write and prepare this Research Paper and others.

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PREFACE

My mission is to hold the report as a symbol which would carve a path for those after us. In making this report I hope to shed light on the Diffusion of Innovations in the context of Information Technologies. This report was indeed a challenging task for me. I deem it essential to highlight the tireless effort for me and provide valuable contribution to knowledge.

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LETTER

OF A C K N O W L E D G E M E N T

It has been a pleasant experience working on this report of Method of Business Research the assignment given to me, helped me a lot to get practical experience. First I would like to thanks Mr. Raja Rub Nawaz my Method of Business Research Teacher to give me the opportunity to work on such Interesting Research Project.

Thank you Yours sincerely

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Contents
Abstract ..................................................................................................................................................... 8 CHAPTER 1:THE PROBLEM .......................................................................................................................... 10 Introduction............................................................................................................................................. 10 Background to the Problem .................................................................................................................... 11 Rationale, Theoretical or Conceptual Background/Foundation ............................................................ 12 Statement of the Problem ........................................................................................................................ 14 Purpose of the Research Project ............................................................................................................. 14 Hypothesis: ............................................................................................................................................. 14 Limitations .............................................................................................................................................. 14 Delimitations ........................................................................................................................................... 14 Definition of Terms ................................................................................................................................. 14 CHAPTER 2:LITERATURE REVIEW ........................................................................................................ 17 Literature Review .................................................................................................................................... 17 CHAPTER 3:RESEARCH DESIGN AND METHODLOGY ....................................................................... 19 Research Methods .................................................................................................................................... 19 CHAPTER 4:ANALYSIS OF DATA AND INTERPRETATION OF RESULTS........................................... 20 Findings ................................................................................................................................................... 20 CHAPTER 5:DISCUSSIONS, SUMMARY, CONCLUSION AND RECOMMENDATIONS ...................... 22 Discussion ............................................................................................................................................... 22 REFERENCE .......................................................................................................................................... 23

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DIFFUSION OF INNOVATIONS
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Abstract
Diffusion of innovation. The process of adoption of latest technologies in the context of information systems. Hypothesis made on the basis of how new technologies and innovation were diffused over a different cultures and societies. For this I used to test five categories of adopters and five categories of adoption by Rogers (1976). Here I used more than ten articles on diffusion of innovation published on internet. My results according to the theory of diffusion of innovation by Rogers. Diffusion of Innovations describes itself in different ways in different cultures and societies and is related to the different kinds of adopters and innovation adoption process. It is also depends on geographical area one can research. Diffusion of innovation is plays very important role in once life because the use of new and latest technologies changes way of living.

Keywords: Information system, Technologies, Diffusion of innovation, Rogers Theory,

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DIFFUSION OF INNOVATIONS
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CHAPTER: 01 THE PROBLEM Introduction

The last hundred years and last few decades, was the era of information technologies revolution thats play important role in numerous sectors of the society. The leaders in different industries whether organizations or individuals had common in one thing is the ability to convert information into awareness for their advantages Globalization is now common in todays businesses. Reasons behind this is the different cultural, social, political and technological prospective. The simple examples of mobile phone communication were take place to revolutionize the existing industrial procedures and processes. In the framework of information system the requirement of innovation creation normally helps in the facilitates the organizations, individuals and governments etc. According to Rogers (1976) innovation is an idea or object that is new and diffusion is the method through which an innovation is spread over a certain channels between the members of different social systems. Rogers acknowledged five stages of awareness evolution, trail, interest and adoption. The method of adopting a technologies or innovation followed by five groups of people early adopters, innovators, early majority, late majority and laggards. According to one Current research that innovation will be the key determinant of competitiveness over the next decades (Afuah, A. Innovation Management: Strategies, Implementation, and Profits, Oxford University Press, New York, 1998). The Innovation created out of a process of evolution of knowledge can take the form of a product, process or an administrative practice. The IT Innovation field is concerned with understanding the factors that facilitate or inhibit the adoption and diffusion of emerging IT-based processes or products within a population of potential adopters (Swanson, E.B.). Even the information technology and its use over the last few decades have evolved as a process of Innovation (Laudon, K., 1985). The research in diffusion area seeks to understand the prototype of spread of these Innovations, their system of diffusion, the forces and factors that help in support or inhibition and the status of these factors and its diffusion at the individual, organizational and national level. Most information technology diffusion models have identified adoption as one of the early stages of the diffusion process in which a commitment is made to purchase technology (Dasgupta Subhasish, et al July-Sept 1999) Research on Innovation adoption and diffusion in context of Information system has become increasingly accepted. Knowledge in this area helps to understand the factors that shape the diffusion and adoption across all levels of adopter categories such that the individuals,
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organizations and countries. Researchers have looked at this area from the perspective of Information Systems planning, diffusion and implementation (Dasgupta Subhasish, et al JulySept 1999). importance of technology planning as a requirement for achieving many of the major advantages attributed to deployment, implementation and the use of information systems, the countries facing the digital divide, with an exception of a few countries, have yet to realize the positive implications of this research stream for their societies. A mere look at the recent e-readiness rankings tells the tale where. Saudi Arabia lies at the 46th place and Pakistan at the 64th position in out of a list of 65 countries of the world (Economist Intelligence Unit e-readiness rankings, 2005)

Background to the Problem

The idea of diffusion was first studied by the French sociologist Gabriel Tarde (1890) and by German and Austrian anthropologists such as Friedrich Ratzel and Leo Fresenius (Roland Burrage Dixon (1928) its basic internal-influence form was formulated by H. Earl Pemberton, (1936) who provided examples of institutional diffusion such as postage stamps and standardized school ethic codes.

In 1962 Everett Rogers, a professor of rural sociology published his work:"Diffusion of Innovations". In this seminal piece, Rogers synthesized research from over 508 diffusion studies and produced a theory applied to the adoption of innovations among individuals and organizations.

Roger's work on the four main elements influence the spread of a new idea: the innovation, communication channels, time, and a social system. These elements work in combination with one another: diffusion is the process by which an innovation is communicated through certain channels over a time among the members of a social system. Rogers adds that central to this theory is process. Individuals experience five stages of accepting a new innovation: knowledge, persuasion, decision, implementation, and confirmation. If the innovation is adopted, it spreads via various communication channels. During communication, the idea is rarely evaluated from a scientific point of view; somewhat, subjective perceptions of the innovation influence diffusion. The process occurs over time. Finally, social systems determine diffusion, norms on diffusion, roles of opinion leaders and change agents, types of innovation decisions, and innovation consequences. The origins of the diffusion of innovations theory are varied and span across multiple disciplines. Rogers identifies six main traditions that impacted diffusion research: anthropology, early sociology, rural sociology, education, industrial sociology, and medical sociology. The diffusion of innovation theory has been largely influenced by the work of rural sociologists( Ryan 1943). In 1971, Rogers published a follow-up work: Communication of Innovations; A CrossCultural Approach. building on his original theory on the diffusion process by evaluating social
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systems. This extension aimed to add value to Rogers 1962 touchstone work (Rogers & Shoemaker, 1971).

Rationale, Theoretical or Conceptual Background/Foundation

The diffusion of innovations according to Rogers. With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level. The publication of a study of Ryan and Gross on the diffusion of hybrid corn in Iowa was the first sustainably visible contribution in a broader interest in innovations which was especially popularized by the textbook by Everett Rogers (1962), Diffusion of Innovations (Rogers 1962). He defines diffusion as "the process by which an innovation is communicated through certain channels over time among the members of a social system." Types of innovation-decisions There are three types of innovation-decisions within diffusion of innovations. Two factors determine what type a particular decision is: 1. whether the decision is made freely and implemented voluntarily and 2. Who makes the decision? Based on these considerations, three types of innovation decision have been identified: Optional innovation-decisions, collective innovation-decisions, authority innovation-decisions. Optional Innovation-Decision This decision is made by an individual who is in some way distinguished from others in a social system. Collective Innovation-Decision This decision is made collectively by all individuals of a social system. Authority Innovation-Decision
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This decision is made for the entire social system by few individuals in positions of influence or power.

Five stages of the adoption process

Knowledge In this stage the individual is first exposed to an innovation but lacks information about the innovation. During this phase of the process the individual has not been inspired to find more information about the innovation.

Persuasion In this stage the individual is paying attention in the innovation and actively seeks information/detail about the innovation. Decision In this stage the individual takes the concept of the innovation and weighs the advantages/disadvantages of using the innovation and decides whether to adopt or reject the innovation. Due to the individualistic nature of this stage Rogers notes that it is the most difficult stage to acquire empirical evidence (Rogers 1964). Implementation In this stage the individual employs the innovation to a varying degree depending on the situation. During this stage the individual determines the usefulness of the innovation and may search for further information about it. Confirmation Although the name of this stage may be misleading, in this stage the individual finalizes their decision to continue using the innovation and may use the innovation to its fullest potential.

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Statement of the Problem
Diffusion of innovation in the context of information systems.

Purpose of the Research Project

The main purpose and aim of this research project is to measure the degree to adopting change specifically in the context of information technology by using Rogers Theory of diffusion of innovation. Also it is a pre-requisite of MBA course METHOD IN BUSSINESS RESEARCH.

Hypothesis:
To answer above questions, we construct the following hypotheses based on what has been observed from the literature reviewed on diffusion of innovation theory:

H1: Process of adopting an innovation Such that IT, in border prospect follows five groups of people to include innovators, early adopters, early majority, late majority and laggards. H2: Diffusion of information (i.e. information technology) completes in 5 stages to include awareness, interest, evolution, trial and adoption. H3: The most common reason to adopt the innovation is media campaign.

Limitations
During this research project I found some of limitations by the companies because they said they are not allowed to disclose important information because of competitors Time limit was one of the barriers during the research Financial constraints are very big issue while doing this research. Peoples are not aware of information technologies terminologies.

Delimitations
As I found some limitations but there is some delimitations as well. I started this research from my own university that was helpful me interviewing students and take their perspective in the form of questionnaires

Definition of Terms
Elements of diffusion of innovations
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The key elements in diffusion research are: Innovation Rogers defines an innovation as "an idea, practice, or object that is perceived as new by an individual or other unit of adoption" .

Communication channels A communication channel is "the means by which messages get from one individual to another"

Time "The innovation-decision period is the length of time required to pass through the innovationdecision process. Rate of adoption is the relative speed with which an innovation is adopted by members of a social system. Social system A social system is defined as a set of interrelated units that are engaged in joint problem solving to accomplish a common goal (Rogers, 1983). Adopter categories Rogers defines an adopter category as a classification of individuals within a social system on the basis of innovativeness. In the book Diffusion of Innovations, Rogers suggests a total of five categories of adopters in order to standardize the usage of adopter categories in diffusion research. The adoption of an innovation follows an S curve when plotted over a length of time. The categories of adopters are: innovators, early adopters, early majority, late majority, and laggards (Rogers 1962) Innovators Innovators are the first individuals to take on an innovation. Innovators are eager to take risks, youngest in age, have the highest social class, have great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting technologies which may in the end fail. Financial resources help absorb these failures. (Rogers 1962 ) Early Adopters
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This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. More isolated in adoption choices than innovators. Realize thoughtful choice of adoption will help them maintain central communication position (Rogers 1962). Early Majority Individuals in this group adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and infrequently hold positions of opinion leadership in a system (Rogers 1962 ) Late Majority Individuals in this group will adopt an innovation after the normal member of the society. These individuals move toward an innovation with a high degree of doubt and after the majority of society has adopted the innovation. Late Majority are typically doubtful about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership. Laggards Individuals in this group are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to change-agents and tend to be advanced in age. Laggards typically tend to be focused on traditions, have lowest social status, lowest financial fluidity, oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership.

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CHAPTER: 02 LITERATURE REVIEW Literature Review

Robertson (1967) describes in his article, the process of innovation and the diffusion of innovation, that there are different questions related to innovation and its diffusion process, depending on the plan. Different type of people take on new thoughts at different times (Rodman 2006; Wildemuth 1992) . The process of innovation decision has five stages, knowledge, attitude, adoption, implementation, confirmation. He further adds that there are five different adopters of diffusion process e.g. innovators, early adopters, early majority, late majority and laggards (Rogers 1976). Shahid (1994) writes that as consumers of mass communication, we are constantly exposed to material that both informs and persuades information about new discoveries in technology, products made to make our life easier, inventions and other innovative procedures. The process of diffusion is defined as the acceptance, over time, of some specific item an idea or practice, by individuals, groups or other adopting units, linked to, specific channels of communication, to a social structure, and, to a given system of values, or culture (Katz et.al. 1963). Markus (1987) studies in his piece of writing that companies think about technology factors important in deciding to adopt and deploy wireless devices designed and information services. Advertising is a vital tool as well as powerful communication force to sell goods, services, images and ideas (Chandra 2004). Rogers (2001) says that the adoption process is the psychological process though which an individual passes from First trial about an innovation to final adoption. At knowledge stage the individual is exposed to the innovation but lacks complete information about it. He then becomes interested in the innovation and seeks information about it at the attitude phase. At the adoption phase, the individual mentally applies the innovation to his present and projected future situation, and then decides whether or not try it. The individual uses the innovation on a small scale in order to determine its utility in his own situation at the implementation stage. At the confirmation stage the individual decides to continue the full use of innovation. Evidence from research studies indicates the conception of confirmation stage is probably valid. Pedersen and Ling (2002) Valente and Davis (1999) analyze what are the requirements of users to adopt Information Technology? These requirements are technological, business strategic and behavioral. Shimp (2000) examines a stream of new products is absolutely essential for most companys success and long-term growth. Despite the huge investments and concerted efforts to introduce
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new products or services, may are never successful. In the process of diffusion of innovation innovators are 2.5%, early adopters are 13.5%, early majority is 34%, late majority is 34% and laggards are 16% (Bryant and Thompson 2002). Wang and Kettinger (1995) suggest that the tremendous success of success of Mobile phone technology has basically changed the way people communicate and Promoted the evolution of a new multibillion dollar wireless communication industry. Advertising effected the sale growth of new, infrequently purchased products (Horsky And Simon 1983) and it attained its maximum effect after several months (Simon and Sebastian 1987).

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CHAPTER: 3 RESEARCH DESIGN AND METHODLOGY Research Methods

By considering the requirement, nature and objectives of this research study, different research methods and techniques have been used. To obtain basic data for hypothesis testing, survey questionnaire method has been used. The structured questionnaire comprises of mostly closed ended questions with a few questions having an option of other. The survey uses both descriptive and analytical method to address the stated research aims.

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CHAPTER: 4 ANALYSIS OF DATA AND INTERPRETATION OF RESULTS

Findings
Primary objectives of the survey have been to answer the following two questions: How has the innovative cellular phone technology diffused in Pakistan? and how significant has been the role of advertisement in this diffusion process?Of the surveyed sample, 92% of the respondents were using mobile phones. The fact that the sample had a bias towards urban population, vast majority of the sample was expected to be using this technology anyway. Due to budgetary reason it was not possible to access rural areas. Figures indicate that those who have held this technology primarily had it during the last three years (30%). In total, about 60% of the respondents have had mobile phones for last 5 years. This finding is quite in line with the figures released by Pakistan Telecommunication Authority PTA (2008) according to which in 2002 total number of mobile phone users were only 1.7 million. This number has tremendously increased in he last five years to about 77 million by the end of 2007 (almost half of Pakistans population is now using mobile cellular technology). It is assumed that in the next few years, this number is expected to increase further although with a relatively slow growth rate as saturation has already started to feature in the country now. Findings of Figure 1 also lead us to accept the null hypothesis 1 (H1). . Hence, as suggested by Roger (1976), the diffusion of innovation takes place in five stages. We note that innovators were only 3% of the surveyed population. These were followed by 19% early adopters, 29% early majority, 30% late majority and 10% laggards. The statement made by H1 seems to have a statistically significant value to assume that process of adopting an innovation like cellular phone follows 5 groups of people innovators, early adopters, early majority, late majority and laggards in case of Pakistani society H2 states that diffusion of information (like in case of cellular phone technology) shall complete in 5 stages: awareness, interest, evolution, trial and adoption. Results have led us to accept H2 as well. It was found that at awareness stage individual is exposed to the innovation but lacks complete information about it. As confirmed by results that more than 70% respondents have a memory of reading/watching/ hearing the media advertisement campaigns. Individual then becomes interested or shows attitude to the innovation and seeks information about it as 80% respondents remember the advertisement and they access media to get information. At the evolution stage the individual mentally applies the innovation to his present and anticipated future situation and then decides whether or not is trying it. As calculations explore that 95%
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respondents have evaluate the application of mobile phone into their life. The individual, then, uses the innovation on a small scale in order to determine its utility in his own situation at the Trail implements stage. As only 3% respondents adopt this innovation as a trial. At the adoption stage the individual decides to continue the full use of innovation. According to Hypothesis H3 predicts that the most common reason to adopt the innovation (cellular mobile technology in the case) will be the media campaign. Figures revealed that the most common reason (for 48% of the respondents) for accessing mobile technology was a professional/business need. Hence, results indicate that H3 must be rejected. Having said that, common sense dictates that in todays age advertisement campaigns certainly play a significant role in peoples behaviour. The professional / business need must have had some benefit of the advertising done by cellular companies. Unfortunately, however, our study does not explore this particular angle leaving it for future research to quantify.

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CHAPTER: 5 DISCUSSIONS, SUMMARY, CONCLUSION AND RECOMMENDATIONS Discussion

In recent past, the over whelming growth in information and technology, has lead the rapid pace of current advancements in all spheres of life. The trend is reflected in from of many different innovative products and services, on which human race has started to show an inevitable reliance over time. Computers, internet, email, variety of transportation means and cellular phones all are amongst the examples of such innovations. Roger (1976, 2001) depicts that diffusion is the process by which an innovation is communicated through certain channels, over time among the members of a social system. The diffusion process remains a significant research interest in communication, and diffusion theory remains a dominant theoretical paradigm for new media studies. This has explored different aspects of usage of cellular phone. According to Rogers theory, diffusion of innovation is a complete process. It has five stages and there are also five categories of adopters (Rogers 1976, 2001) and advertising campaigns play a significant role in the process of diffusion of innovation. All, but one, hypotheses were tested as positive suggesting that diffusion of innovation follows five stages and steps as suggested by Rogers as innovators, early adopter, early majority, late majority and laggards and five stages as awareness, interest, evolution, train and adoption (Rogers 1976, 2001). However, we could not find sufficient statistical reason to conclude that advertising campaigns play a significant role in diffusion of innovation. It was observed that peoples choice and adoption to the innovation was driven by factors other than advertisement campaigns (particularly professional / business needs). Having said that one may not be able to discount the indirect role of advertising campaigns as no user would typically go after such an Innovation without some degree of exposure to such campaigns. While advertisement campaigns of various cellular companies do not necessarily play a decisive role in case of individuals accessing the technology, such campaigns indeed proved instrumental in introducing the technology to masses and helping achieve the critical mass in due time. Moreover, it is very much expected that these campaigns continue to remain an important factor for businesses to decide in favor of accessing the technology. Findings suggest that innovation of mobile cellular technology has followed the diffusion of innovation process in accordance with the famous theory of Roger. All the suggested stages of innovation diffusion have closely been observed in case of Pakistan, whereby the critical mass has been observed to have reached in about 8 10 years time. In terms of policy implications, researcher draws a number of conclusions from the research findings. The fact that about half of Pakistans population has already accessed this technology by now, it is very unlikely that this pace of technology access shall be witnessed for long. Hence, the growth of adoption to the technology is expected to be slower in the years to follow. This also
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means that the cellular companies are to face an intense competition ahead if they are to remain successful in the business. More and more competition in price plans, service quality and package offering shall become the key to success for all. This will of course give rise to even greater market competition. For government policy makers, it is important to ensure that as more and more users of this technology are emerging over time, service providers capacity to serve These customers satisfactorily remain intact. At times, such a demand trend by customers Motivates companies to extend their customer base beyond their limits and reach. This Obviously is not a healthy sign and kills the whole purpose of technological development.

REFERENCE
I. II. III. IV. V. VI. http://en.wikipedia.org/wiki/Diffusion_of_innovations http://www.bzu.edu.pk/PJSS/vol29no2_2009/FinalPJSS16.pdf Rogers, E "Diffusion of Innovations" 5th ed. Free Press, New York Trans-cultural diffusion or Roland Burrage Dixon (1928): The Building of Cultures. Pemberton, H. E. (1936) 'The Curve of Culture Diffusion Rate', American Sociological Review, 1 (4): 547-556. Greenhalgh, T.; Robert, G.; Macfarlane, F.; Bate, P.; and Kyriakidou, O. (2004). Diffusion of Innovations In Service Organizations: Systematic Review And Recommendations. Milbank Quarterly. Volume 82, Issue 4, pages 581629. Ryan (1943) (Rogers, 1983. p. 11)

VII. VIII.

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