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Running Head: ADOPTION OF TECHNOLOGY INTO BUSINESS

Literature Review: The Resistance to Adoption of Technology in the Business World

Nathan Duran

Rhetoric & Composition 1302

The University of Texas at El Paso


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Abstract

The business word is of a changing nature, more often quick than gradual. These changes come

due to an infinite number of variables. Of the many things that contribute to the constantly changing

business climate, the most important contributor is evolving technology. As new things are introduced to

the way a business operates, they can often help but can also hinder growth and success. Technological

advances have had an undoubtably significant effect on the business world, but as new programs and

systems are popping up, not all businesses are quick to adopt these changes due to uncertainty, internal

resistance, and other factors. Many factors are considered when analyzing a business and its relationship

with the changes brought by technology. In this literature review, the negative factors influencing

adoption and necessary positive components needed for adoption will be analyzed.
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Introduction

Over the last few decades, the world has gone through more changes at a rate faster than ever.

People are introduced to more new things every day with exciting inventions that change everything in

daily life. The most important inventions society has seen in the last few decades are technological.

Computers and computer programs, cell phones, the internet, and countless other technological advances

have changed how the entire world operates from daily life all the way to extremely important events

such as political races.

Business, the world’s engine that never sleeps, has been changed by technology in every way.

Accounting, finance, economics, entrepreneurship, and all other branches of business have significantly

changed. Not only is business changing significantly, but it is happening at a staggering rate. The quality

of advertisements, social networking, communication, and countless other business functions have

improved through the use of cutting-edge computer programs. Any business can spread their name across

the vast world of the internet to anyone regardless of geographic barriers thanks to vast improvements to

mobility and convenience with the availability of handheld devices. Large businesses can share their

information to their third-party connections via cloud technology. Industry titans such as Amazon have

revolutionized how shopping is done with online services. Meetings can be conducted through video

chats, which help with difficult schedules and inconvenient locations. This is just a very small list of

examples of changes brought to business by technology, and the businesses that adopt technology hope to

utilize it in a way that improves their operations and ultimately increase success.

With new technology coming into light seemingly every day, it is difficult for much of it to

become integrated with mainstream use. The decision-making process of a business likely involves many

steps, especially in a large business. This figure from the Journal of Electronic Commerce Research

illustrates an example of a complex decision-making process a business goes through to adopt technology
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into its processes.

William Wang, Y., Chang, C., & Heng, M. S. (2004). Figure 1 [An illustration of the driving

forces that affect the decision-making process of a firm for technology adoption.].

Retrieved November 1, 2018, from http://www.jecr.org/sites/default/files/05_2_p02.pdf

While it may seem that everything technology brings is positive and all businesses would want to

adopt everything technological, not all aspects of technology are one hundred percent beneficial. Because

there may be negative aspects of a new form of technology, not all businesses are quick to adopt. This

brings up a couple questions:

1) Why would a business be hesitant to adopt new technology?

2) Who is reluctant and resistant to the adoption of new technology?

3) What can a business do to adapt to technological change and adopt new technology despite

the resistance and reluctance?


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The following literature review will involve research of how the businesses of the modern world adopt

technology into their operations.

Why would a business be hesitant to adopt new technology?

As mentioned in the introduction above, technology brings benefits and abilities to a business that

can drastically change it and push it in a positive direction. However, no technological advances are

flawless and negative impacts can come with the change.

The first reason a company will resist the adoption of new technology to its process is fear of the

unknown. New technology may seem like all sunshine and rainbows with all the advantages and

improvements it may boast, but the decision-making executives of a business might ask a number of

questions: What negative impacts will come with this new technology? When will these negative impacts

occur? Who will they effect? Is it worth it? The first potential negative part of implementing new

technology before the technology is even placed into a business is its lack of compatibility with the

current processes the company uses. Before a company can even assess the negative impacts coming with

the adoption of new technology, the new technology must first be compatible with the adopter. In

research shown by the Communications of the IBIMA, an online survey was used to gain an

understanding of how small and medium businesses perceived the benefits and barriers of how new

technology affected their business. The demographic consisted of male and female owners, CEOs, Senior

business managers, and IT managers. After the surveys were completed, tables of both benefits and

barriers were made to compare and contrast the results in a fashion that would measure their significance

on the business. Of the many barriers expected, most were labeled as “not significant” but the only barrier

that was labeled as “significant” was “Lack of compatibility between our current technical infrastructure

and e-business technologies” (Communications, 2011). The main, and most significant, disadvantage to

adopting new technology is understanding that there is little research on new things, and long-term effects

have yet to be observed. In an e-mail interview with professor Hettie Houghton from the Department of

Accounting and Information Systems of the University of Texas at El Paso, she states “As with anything
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new, there will be uncertainty”. While an improvement to a machine that produces string in a

manufacturing process would make it produce string faster, it could make string of lesser quality, or cost

the company more to operate it. A new computer program might allow a company to store all its

information in one place on one server, but the company might question its security and safety. These

setbacks are understandable deterrents for businesses who in in today’s economic climate cannot risk

setbacks that could potentially add up to more negative than positive outcome. Beyond the actual

technology itself, the origin of the technology is a concern for businesses. Small producers of technology

are not as reliable as well-established large companies that produce similar products in the same field, and

new technology from a smaller company has a tendency to be expensive to cover costs or may not even

be trusted due to a young and yet-to-be proved reputation. Another reason for a resistance, or even lack of

desire to want to participate with the new technology, would be that the new technology would not make

much of a difference. A company that has a fine-tuned, efficient process for business operations would

be unlikely to adopt a new component to their process if it is already working well, especially if the new

component would not make a considerable difference. Many risks and setbacks are feared when a

business is considering adopting technology, and according to Professor Houghton, “there is a great deal

of anxiety and uncertainty”.

The introduction of new technology can greatly improve a business and push it to the top, but it

also has the potential to harm it in a way that sets it back. As with anything new, there are many questions

to be asked, and for many there are now answers. Lack of information, research, time, and experience

contribute to a fear of the unknown that deters a business from adopting new things, especially

technology.

Who is reluctant and resistant to the adoption of new technology?

Negative consequences are the obvious reason a company would want to avoid or at least prolong

the adoption of new systems or technology, but a second reason is one that occurs regardless of positive

or negative consequences to the business as a whole: a resistance from employees involved in the direct,
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hands-on process of a business. In a study shown in an article by The Quarterly Journal of Economics, a

group of soccer-ball producing companies in Sialkot, Pakistan are studied in the implementation of new

technology to their manufacturing process. This cluster of companies is significant to its surrounding

economy, as it generates an estimated 30 million soccer balls every year, including for the 2014 world

cup. The technology offered to the firms would produce soccer-balls by increasing the number of

pentagons that are taken from each sheet in a mathematically-efficient way. On top of producing more

products from the same amount of material, it would cut costs per hexagon by 6.76%, and the total cost

by 1%. This new process would be present a technical improvement to many eligible firms and would

not need to add additional parts or steps to the production process in any way. Despite the positive

aspects of the new technology, adoption of the technology was disappointingly low. The firms that did

adopt the technology reported that it was functioning as expected, but still only few firms adopted. After

a qualitative study, an important piece of information emerged. When learning the new technology, the

employees were slowed down in the initial phase, and that causes their effective wage to fall. Although

the technology would improve the overall process of the soccer-balls, certain employees would accrue the

“saved” costs. Because of this, the technology was rejected and the employees in these firms were

“unwilling to work with the offset die.” This is an example of misalignment, as the lower-level employee

suffers while management is unaware of the changes. This case illustrates how the benefits of a new form

of technology are initially outweighed by the posed setbacks. The inconvenience to learn a new skill and

the costs absorbed by the employees were significant enough for the firms to resist the technology and

resume production as normal.

While there are reasonable factors that would push an employee to resist the adoption of new

technology into the process of a business, employees resisting change in general is a common and

ongoing issue in a company. Employees tend to hold on to “the stability and the predictable nature of a

daily work routine” (Unicorn HRO). This is especially common in veteran employees who have

developed a specialized skill based on a specific environment, and due factors that induce structural
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unemployment such as the development of technology, an employee with outdated skills can lose his or

her job. This can lead to an employee experiencing anxiety and an unsettled feeling in regard to their

place in their business, and this contributes to the “fear of the unknown” as mentioned in the first

answered question above.

Regardless of the positive or negative impacts a new technological component introduced to a

company may have on a business as a whole, the resistance of employees can be the detrimental factor in

the new technology’s implementation to the business. Whether the changes brought to the employees are

costly to their production or earnings, or the change brings anxiety and spells failure in the future, the

success of the adoption of new technology into a business starts from the bottom with its employees.

What can a business do to adapt to technological change and adopt new technology despite the

reluctance or resistance?

There are many obstacles that make the adoption of new technology into a new business very

difficult and almost impossible, but there are ways to make it possible and even successful. The most

important things to have when implementing new technology are flexibility and incentive.

When adopting new technology, a company runs the risk of increased costs, lack of compatibility,

and even failure in general. And accompanied by these negative impacts, new technology comes with a

lack of research, experience, and information. An outdated approach to adoption is called the “waterfall

system”, which is a method of preparing implementation by setting up steps in chronological order that

“trickle down” and the company adopts the company phase by phase (Matarelli, 2018). This approach is

often used in a long-term fashion and can even take years to finish, and due to the rapidly changing nature

of technology in the world the steps used in the waterfall can become outdated in the middle of the

process. Additionally, due to the lack of information and experience that comes with new technology, a

business could be confronted with unexpected changes to their process with the new technology, and the

waterfall method that was put in place could rendered useless. The main aspect of methods similar to the
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waterfall lack is flexibility. Due to the unpredictable and changing nature of technology, the approach a

business must take when adopting new technology must be flexible and have an ability to adapt. This

method is called the “Agile method”, which consists of an implementation style that is designed as the

technology is worked into the business (Matarelli, Forbes). The Agile method is comprised of small steps

designed to allow trial and error without permanent or long-term decisions that can come with costly

expenses or consequences. Just as the world of business and technology change constantly, the approach a

business takes when adopting technology must be able to change just as fast.

As mentioned previously in this literature review, technology may be rejected by employees

regardless of the technology’s overall positive or negative impact on the business. An employee might

resist technology because of uncertainty, absorbed costs, and inconvenience. To compensate for these

negative aspects brought to employees due to the adoption of new technology, a business can use

incentives. From the Pakistan study by researched by the Quarterly Journal of Economics, the cutters

rejected the technology due to the costs that they would absorb if they could not perform as fast with the

new technology as they did with the original method. But one firm, “Firm Z”, restructured the cutters’

earned wages in way that they could earn more with the new technology with a guaranteed wage plus a

bonus dependent on performance. Since the costs the employees accrues due to performing slower with

the new technology can be compensated with the new earning structure, there is incentive to earn more

with a higher performance. This example illustrates how a new technology can be accepted into a

business despite initial employee resistance. When offered an incentive for using the new technology, the

adoption was successful.

As technology has a tendency to be unpredictable, a business’s model for adoption of new

technology cannot be inflexible and permanent, it must be dynamic and open to change. Along with a

adaptive technique, a business must offer its laborers that are directly affected by the technology adoption

must be taken into consideration because there may be negative impacts absorbed by them. Flexibility and
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incentive for employees are just two aspects that should be considered when a business is adopting new

technology, but there are many more that have yet to be explored and researched.

Conclusion

Many factors play a part in the adoption of technology into a business, and the most significant

factors are negative. The business world is changing both constantly and rapidly at an exponential rate

with technological advances evolving and emerging all around the world. The purpose of innovation it to

improve how things work and make them more efficient, or innovation can even bring completely new

approaches to things and change how things are done entirely. The positive aspects of inventions are

obvious and assumed, but the aspects that a business is concerned with most are the negative aspects that

can harm a business more than the positive aspects will help. Uncertainty due to lack of information and

experience causes a business to be weary and hesitant to change. And to add to the resistance from the

uncertainty of the effects on the business as a whole, the resistance and uncertainty trickles down to the

backbone of the company. Fear of the unknown, unwillingness to learn new skills, and lack of incentive

causes employees that handle the direct processes of a business to reject the adoption of technology as

well. Regardless of how new technology will affect a business, if it is to be successfully adopted it must

be implemented with a flexible approach and be considerate to the employees that will be directly

affected by it. This subject is very new, and like new technology it is yet to be truly be researched and

studied in long-term way. The futures of business and technology are likely to be intertwined.
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REFERENCES

Reymen, I., Berends, H., Oudehand, R., & Stultiëns, R. (2016, November 15). Decision making for

business model development: A process study of effectuation and causation in new technology

based ventures. Retrieved October 21, 2018, from

https://onlinelibrary.wiley.com/doi/full/10.1111/radm.12249

Anzoategui, D., Comin, D., Getler, M., & Martinez, J. (2016, February 19). Endogenous Technology

Adoption and R&D as Sources of Business Cycle Persistence. Retrieved October 21, 2018, from

https://www.nber.org/papers/w22005

Bai, J., Jin, W., McElheran, K., & Williams, R. (2018, October 15). The Effects of Technology Adoption

On Firms, Supply Chains, and Rivals. Retrieved October 22, 2018, from

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3259180

Hinton, M. (2016, September 06). IT user satisfaction: Distinguishing between the technology adoption

and assimilation processes. Retrieved October 26, 2018, from http://oro.open.ac.uk/47344/

Atkin, D., Chaudhry, A., Chaudry, S., Khandelwal, A. K., & Verhoogen, E. (2017, March 09).

Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in

Pakistan *. Retrieved October 26, 2018, from

https://academic.oup.com/qje/article/132/3/1101/3064351

Furukawa, M. (2017, July 19). Flexibility Based Metrics at Diagnosis of New Technology Adoption.

Retrieved October 26, 2018, from


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https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1167&context=pacis2017

Ghasemi, M., Shafeiepour, V., Aslani, M., & Barvayeh, E. (2011, December 12). The impact of

Information Technology (IT) on modern accounting systems. Retrieved October 26, 2018, from

https://www.sciencedirect.com/science/article/pii/S1877042811024621

Akcigit, U. (2017, December). Economic Growth: The Past, the Present, and the Future. Retrieved

October 26, 2018, from https://www.journals.uchicago.edu/doi/full/10.1086/694617

William Wang, Y., Chang, C., & Heng, M. S. (2004). The levels of information

Technology adoption, business network, and a strategic position model for evaluating supply

chain integration. Retrieved October 26, 2018,

from http://www.jecr.org/sites/default/files/05_2_p02.pdf

Abid, A. A., Rahim, M. M., & Scheepers, H. (2011). Experienced Benefits and Barriers of e-Business

Technology Adoption by SME suppliers. Retrieved October 26, 2018, from

https://www.researchgate.net/profile/Md_Rahim3/publication/260426111_E

Business_Technology_adoption_processes_by_Small_and_Medium_Enterprises_SMEs_in_Saud

_Arabia_A_stage_model_approach/links/5807155408aeb85ac85f5db6.pdf

Handling Resistance to Technological Change in the Workforce. (2016, June 7). Retrieved November 3,

2018, from https://unicornhro.com/blog/handling-resistance-to-technological-change-in-the

workforce/

Matarelli, M. (2018, January 5). How Can Businesses Adapt To A Rapidly Changing World? Retrieved
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November 4, 2018, from https://www.forbes.com/sites/quora/2018/01/05/how-can-businesses

adapt-to-a-rapidly-changing-world/#43e83ca85930

E-mail interview with professor Hettie Houghton of the University of Texas at El Paso:

1. Q: Do you believe the business world will only benefit with growing technology, or will there

also be setbacks?

A: There definitely will be setbacks but ultimately the advancements in technology will greatly

benefit business. Some of the setbacks may be due to human interaction with technology.

2. Q: Is communication the only area that should be improved by technology, or should technology

be used in all areas of business?

A: Business should be used in all areas of business. In the accounting field we are stressing the

use of technology to help clients in the business world.

3. Q: Do you think new electronic currency, such as Bitcoin, will take over currency or die out?

A: I think that there is a great deal of anxiety and uncertainty with electronic currency. Bitcoin

may or may survive but I feel that eventually type of electronic currency will eventually prevail.

4. Q: Should the business world eagerly accept all this new technology, or be weary of it?

A: As with anything new, there will be uncertainty but as people or businesses see the potential

that technology brings they will eventually accept it.

5. Q: What are some quick examples of how you have seen emerging technology change the

business world?

A: Technology is changing the accounting world and more and more firms are asking for

Information Systems majors to come and join their firms. To be able to relate to different

businesses and industries the accounting profession needs people that can relate and understand

the technology world.