Theorizing about the Early-Stage Diffusion of Codependent IT Innovations

In this paper, we focus on the early-stage diffusion of codependent IT innovations, which are a type of innovation in which the overall innovation consists of two complementary parts that are adopted by two different adopter communities but where both parts need to be jointly adopted by the two coadopter communities for successful diffusion of the overall innovation. Using innovation diffusion, organizing vision (OV), and institutional entrepreneurship theories as the key theoretical lenses, and an in-depth case study reconstructed using 20 years of discourse surrounding Walmart’s campaign in the early stage of diffusion of the RFID-in-retailing technology, we develop a fourphase process model for the early-stage diffusion of codependent IT innovations. We make three specific contributions to the IS discipline, specifically to the literature on IS innovation adoption and diffusion. First, we add the notion of coadopter relative advantage and posit that the organization in the coadopter community with a higher coadopter relative advantage that perceives the highest degree of coadopter relative advantage will emerge as an institutional entrepreneur (IE) and will influence the early-stage diffusion of the codependent IT innovation. Second, we add the notion of an internal-external influencer and posit that the IE may be an actor who is internal to the overall adoption phenomenon, which involves two different coadopter communities, but external to the coadopter community with a lower coadopter relative advantage that adopts the innovation component. Third, we divide the early-stage diffusion process into four phases—emergence, structuralization, evolution, and chasm—and identify the institutional entrepreneurship strategies used and the OV functions enacted by the IE during each phase. We propose that the IE for a codependent innovation will: (1) use the rationale development strategy and enact the interpretation OV function during the emergence phase, (2) use the resource mobilization strategy and enact the mobilization OV function during the structuralization phase, (3) use the relationship development strategy and enact the legitimation OV function during the evolution phase, and (4) use all the three institutional entrepreneurship strategies and enact all the three OV functions during the chasm phase.