Technology Adoption in Organizations: Use of Incentives and Standards for Control and Coordination

Technology adoption has become an important management issue in today’s decentralized organizations. Disparate systems and the attendant incompatibility costs between users and departments within an organization can create inefficiencies and reduce productivity. Fortunately, the managers of the organization have a rich tool-set — incentives and standards that they can use to manage technology adoption. We show that simple incentive plans, even ones that only provide bonuses for selection of standard technology or only provide penalties for non-standard selections suffice. Further, it is even possible to devise incentive plans which have zero expected costs to users and organizations and yet induce the users to pick common systems. We also examine technology adoption with communication between managers and users.