Chapter 2 Literature review
2.3 The TOE Framework
The technology–organization–environment (TOE) model is presented by Tornatzky, Fleischer, and Chakrabarti (1990) who depicted the innovation as a process where the innovation development is always affected through engi-neers, entrepreneurs and users. TOE offers a useful theoretical framework in analyzing how are the factors related to technology, organization, and envi-ronment affecting firms to adopt the novel innovations and particular technolo-gies. These three important drivers are respectively the Technological Back-ground (TB), the Organizational BackBack-ground (OB), and the Environmental Background (EB). In order to develop the analytical framework of this research, TOE model will be taken refer and possible factors will be further selected and determined from this model. The TOE model and related hypotheses will be discussed in subsequent sections.
2.3.1 Technological Background (TB)
The Technology Background (TB) indicates that the features of related technology will affect the diffusion of particular technologies (Tornatzky et al., 1990). More specifically, TB is composed of existing technologies that are be-ing used and those available technologies form external place includbe-ing market and other organizations. The extant technologies of companies are crucial in the process of determining adopting other new technologies, since existing technologies can be seen as a benchmark and limitation for those new technol-ogies. Firms can base on the comparison of different technologies to conduct technological change (Xu, Ou, & Fan, 2017). Potential innovation, which cur-rently does not be used, will also impact the innovation development at firms’
level. These potential innovations can be split two forms: defining the limita-tion of possible innovalimita-tions and modifying present innovalimita-tions by observing different extant innovations. Besides, it is definitely for firms to discover inno-vations from the external organizations. To sum up, innoinno-vations can also be categorized into three types, including incremental, synthetic and discontinuous types (Tushman & Nadler, 1986).
As discussion of TB, the technological innovations of firms and organiza-tions can be influenced based on internal and external technologies. TB includes many of characteristics affecting firms to adoption of technology. For example, technology readiness can be one of important criteria being comprised in the TB aspect. For mobile phone manufacturers, determining to adopt RoHS materials in production process may need to consider many technological factors relevant to the use of prohibited materials. These factors may influence firms or organi-zations performances such as financial performance. To follow the green regu-lations and promote green manufacturing to meet the future production trend, adopting RoHS may be necessary for firms. If the firms understand the related technology knowledge of RoHS in production and environment protection more, they will be more willing to adopt RoHS for production. Therefore, firms with higher level of technology-related background are better determined for the adoption of the RoHS process materials. Thus,
H1: TB will positively influence the adoption of RoHS process materials.
2.3.2 Organizational Background (OB)
The Organizational Background is defined based on the resources availa-ble to help the particular technology adoption (Lippert & Govindarajulu, 2006).
A great number of scholars have explored the relationships between OB and technology adoption (Lippert & Govindarajulu, 2006). In these relationships, there are two important relations, including top management support and par-ticular technology knowledge and experiences, can be used to examine partic-ular technology adoption. Theses two critical criteria have also been verified the effectiveness to affect the information technology adoption (Jia, Guo, &
Barnes, 2017). However, there still are many factors influencing firms’ tech-nology adoption. For examples, the criteria of firm size often being leveraged to investigate the IT adoption. Based on the past literature review, the larger of firm size, the greater of intention to adopt particular technology. The firm scope often can also be utilized as independent variable to analyze the adoption of IT. Moreover, competiveness pressure and regulatory may also influence the technology adoption (Lippert & Govindarajulu, 2006).
The top management support always plays a big role influencing enter-prise’ decision-making process (Ahani, Rahim, & Nilashi, 2017). Management support is also found to have impact on organizational learning, knowledge management and technology sourcing. Given these influential relations, the competitive advantages may further be enhanced. Moreover, technolo-gy-related knowledge and experience is a determinant affecting technology adoption. According to the previous studies on technology adoption, employees having sufficient technology usage experience can maximize the productivity.
Adopting particular materials to produce electronics devices can also be
re-garded as a kind of technology adoption. This is because firms have to consider whether the materials adoption will impact organizational performance. From organizational perspective, taking possible factors into account to determine the adoption of the materials in production is also very important in decision making.
In lights of above discussions, the adoption of RoHS materials for production process may be capable of being affected organization-based factors. Therefore, this study proposes a hypothesized relationship:
H2: OB will positively influence the adoption of RoHS process materials.
2.3.3 Environmental Background (EB)
In accordance with the scope of TOE model, the Environmental Back-ground (EB) represents that firms can do business activities under some spe-cific conditions (Ahani et al., 2017). These spespe-cific conditions include several factors that will influence certain technology adoption. For example, competi-tive pressure, which refers the degree of pressure from competitors in the mar-ket, can significantly influence the technology adoption (Oliveira & Martins, 2011). The competitive pressure sometimes can also force firms to make some changes in production and design. For instance, on the basis of competitive pressures, firms may need to make pricing and competitive evaluation when they decide to launch new products to the market. In short, competitive pres-sures may lead to environmental uncertainties and raise the necessity of tech-nology adoption. If firms would like to adopt a new materials that will be applied into production, evaluating competitors’ strength and weakness and pricing for new products will be necessary. Give the assessment and analysis, firms can make response in time to determine if they should use process materials for producing new electronics devices.
Moreover, expectation of market trend is another important factor influ-encing technology adoption. If process materials adoption is believed to be the manufacturing industry’s trends, then most firms will be more willing to adopt it.
Those rivals who decided not to participate the contest risk being left behind, and may be disadvantaged to their competitors (Yee-Loong Chong & Ooi, 2008).
Therefore, based on above illustration regarding to EB and technology adoption, this research hypothesizes that:
H3: EB will positively influence the adoption of RoHS process materials.