Factors Considered in Adopting Technology
Technology is the application of science in solving problems, modifying already existing solution to a problem, realizing objectives or performing particular duties in an organization. Therefore, before an organization decides to adopt a given technology, it must analyze possible effects on of the technology on the organization as follows.
The general determinants for adoption of new technology include the cost of adoption and the gains received by the users. The benefits include the change in profits when an organization moves to a new technology from an older one. On the consumer side, it may include utility maximization from the new technology, which may include non-economic benefits such as enjoyment of being the first person to acquire a new brand. Other determinants include civil skills, the strength of customer-firm relationship Skill level of employees and nature of capital goods sector
Both employees and capital goods are significant in execution and operation of a technology. Technology that requires more time, complex new skills and higher initial cost will lead to the slow rate of adoption. Employees need to be equipped, with necessary skills, to operate the new technology. The network should be updated or reinstated. In cases where demand is uncertain, it is difficult to predict whether or not the organization can recover the cost of adopting the technology.
Market structure and firm size
The organization needs to evaluate its financial muscles. Therefore, larger organizations have the financial and resources to invest in new technologies and assume the risk connected with it. Firms with larger market base are expected to adopt new technology since they have capabilities to correct the profits from the adoption. The organization should have enough resources to invest in the new technology. Large size and market power can hinder the rate of adopting new technology. Larger organization may have several level of bureaucracy, which can hinder the decision-making process regarding the new technology. However, technology can bring new sources of competition, and organizations that have an outdated form of technology may be forced out of the market.
Government and regulation
The laws and legislative institutions have a greater impact on adopting new technology. Therefore, some state regulation can prohibit or allow the use of a given technology. The government can grant compensation for the use of new technologies to motivate organization adopts them. The government may impose various barriers such as permits for release of pollutants, and therefore, if the technology does not meet the requirement it will be rendered illegal.
In conclusion, the organization needs to study carefully the impact of the technology on the state regulation, the market, employees to avoid running in to crisis.