The process by which a firm adopts and implements technological innovations is influenced by the technological context, the organizational context, and the environmental context (Tornatzky and Fleisher 1990).
The technological context includes the internal and external technologies that are relevant to the firm. Technologies may include both equipment as well as processes. The organizational context refers to the characteristics and resources of the firm, including the firm’s size, degree of centralization, degree of formalization, managerial structure, human resources, amount of slack resources, and linkages among employees. The environmental context includes the size and structure of the industry, the firm’s competitors, the macroeconomic context, and the regulatory environment (Tornatzky and Fleisher 1990).
These three elements present “both constraints and opportunities for technological innovation” (Tornatzky and Fleisher 1990, p. 154). Thus, these three elements influence the way a firm sees the need for, searches for, and adopts new technology.