Organizational Slack and Information Technology Innovation Adoption in SMEs

Organizations must strike a balance between stability and innovation –i.e., between exploitation of their current business model and processes and exploration and adoption of alternative solutions (March, 1991). Accordingly, understanding the processes by which organizations adjust their propensity to innovate, as well as the conditions most likely to foster innovation in a firm, is an important endeavor that has motivated a large innovation literature in management (see Daniel et al., 2004; Damanpour, 1991; Drazin & Schoonhoven, 1996; and Fiol, 1996, for reviews of this literature). Prior theory predicting innovation rates highlights the role of organizational slack as an important condition that facilitates exploration and, thus, contributes to a firm’s innovativeness (Cyert & March, 1963; Greeve, 2003). On the ABSTRACT