2006 24 Innovation diffusion and relationship marketing

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Innovation diffusion and relationship marketing: An empirical study of factors influencing the intention to adopt the innovation of modular facility technology

By Gordon Leichter

PRTouro University International A Dissertation Submitted to the Faculty of Touro University International In Partial Fulfillment of the Requirements for the Degree of: Doctor of Psychology in Business Administration Chaired by Dr. Tao Gao Touro University International Committee: Dr. J.D. Eveland Touro University International Dr. Kristen DeTienne Touro University International Rev. 2.0

June 30, 2006

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UMI Number: 3229042

Copyright 2006 by

Leichter, Gordon

All rights reserved.

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PRAbstract The adoption of innovations is widely discussed within innovation diffusion research. The various stages of adoption, innovation attributes, and adopter traits have been empirically measured and meta-analyzed by many researchers, in both consumer and organizational market situations. While innovation diffusion research originated in sociology, the majority of recent studies have been focused within marketing. However, only a few studies have attempted to operationalize and test a conceptual framework utilizing both innovation diffusion and marketing constructs. These few studies have not addressed the complexity of relationship marketing in any particular depth, especially in reference to the most critical transitional innovation diffusion stage of the intention to adopt. This study operationalizes and empirically tests a conceptual framework of 25 hypotheses utilizing both innovation diffusion and relationship marketing constructs regarding the most critical transitional innovation diffusion stage of the intention to adopt not previously addressed in other studies. Survey data was utilized regarding the intention to adopt the innovation of modular facility technology for building new pharmaceutical manufacturing facilities. The target population was senior level decision makers from pharmaceutical companies accessed through a common database from the International Society of Pharmaceutical Engineering, ISPE. The results provide valuable insight into a highly complex purchasing situation within a particular market segment. Findings indicate that an adopter’s perceived value as being more influential than an adopter’s perceived risk when developing an intention to adopt the innovation of focus. Furthermore, innovation diffusion antecedents were more influential due to early stage adoption dynamics with relative advantage, compatibility, and perceived acquisition and switching costs proving to being significant influencers in lieu of trust and relationship satisfaction. EV

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Acknowledgements

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- - iiEV A research project of this extensive nature could not be accomplished without the support, advice, and input of others. I am deeply indebted to my research committee consisting of Dr. Tao Gao, Chair, Dr. J.D. Eveland, and Dr. Kristen DeTienne. Their help, guidance, and encouragement greatly helped to navigate this challenging undertaking. Furthermore, my special gratitude is due to Dr. Gao who persevered and motivated me to complete this project with his patience and determination. Also, my gratitude is extended to the faculty of Touro University International for enabling a distinguished remote learning doctoral program, without which completing a program of this magnitude would be unattainable for someone in my situation. Additionally, gratitude to my employer and colleagues at Pharmadule, Inc, who have supported my efforts and provided me the opportunity to be exposed to the innovation of topic in this study, and for providing me the time and encouragement to compete the program. Furthermore, I thank the cooperation and support of the management of the International Society for Pharmaceutical Engineering (ISPE), inclusive of my long time colleague and friend Jon Tomson, who has supported me in my academic pursuits over the years. And lastly, and most importantly, my deepest gratitude is extended to my loving wife Nancy, and daughters Sarah and Rebecca; it would have been impossible to complete the project without their unselfish support and sacrifice over the duration of my study. Finally, I would like to dedicate this project to my beloved deceased parents, Howard and Muriel Leichter, whose hard work and life achievements instilled the importance of the pursuit of higher education as the driving force behind this accomplishment. IEW

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TABLE OF CONTENTS

Abstract............................................................................................................................................i Acknowledgements.........................................................................................................................ii TABLE OF CONTENTS...............................................................................................................iii

LIST OF TABLES.........................................................................................................................vi LIST OF FIGURES.....................................................................................................................viii

CHAPTER 1: INTRODUCTION...................................................................................................1 Importance of Research in Innovation Diffusion and Relationship Marketing in Industrial

Markets.....................................................................................................................................1

Modular Facility Technology.................................................................................................4

Deficiencies in Prior Research..................................................................................................8

Imbalance of Technical and Social Factors............................................................................9

Intention to Adopt Stage.......................................................................................................11

Incumbent Deterrence...........................................................................................................14 Moderating Influence of Adopter’s External Market Pressure and Organizational Readiness

...............................................................................................................................................15

Empirical Measurement of Individual Decision Makers......................................................16

Research Questions.................................................................................................................17

Organization of the Dissertation.............................................................................................20

CHAPTER 2: LITERATURE REVIEW AND THEORECTICAL BACKGROUND................21

Overview.................................................................................................................................21

Innovation Diffusion...............................................................................................................21

Perceived Innovation Attributes...........................................................................................23

Communication.................................................................................................................24

Innovation Stages..............................................................................................................25

Social System....................................................................................................................28

Relationship Marketing.........................................................................................................29

Supplier’s Market Factors.....................................................................................................33

Introduction to the Conceptual Model....................................................................................35

Dependent Variable: The Intention to Adopt an Innovation................................................39

Definition..........................................................................................................................39

Dimension.........................................................................................................................40

Mediating Variables..............................................................................................................43

Adopter’s Perceived Value...............................................................................................43

Definition......................................................................................................................44

Dimensions....................................................................................................................44

Hypothesis rationale.....................................................................................................46

Adopter’s Perceived Risk..................................................................................................46

Definition......................................................................................................................46

Dimensions....................................................................................................................46

Hypothesis rationale.....................................................................................................49

Moderating Variables............................................................................................................50

Adopter’s External Pressure.............................................................................................50

Definition......................................................................................................................50 PREV

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Dimensions....................................................................................................................50 Hypotheses rationale....................................................................................................52

Adopter’s Readiness..........................................................................................................52 Definition......................................................................................................................53 Dimensions....................................................................................................................53 Hypotheses rationale....................................................................................................55

Independent Variables..........................................................................................................55

Non-relational Factors.....................................................................................................56

Relative Advantage.......................................................................................................58

Compatibility.................................................................................................................60

Perceived Complexity...................................................................................................63

Perceived Acquisition Costs.........................................................................................66

Perceived Switching Costs............................................................................................68

Relational Factors............................................................................................................71

Network Externalities....................................................................................................72

Adopter’s Trust of Seller...............................................................................................76

Relationship Satisfaction..............................................................................................79

Supplier’s Market Factors................................................................................................81

Attractiveness of Offer..................................................................................................81

Effectiveness of Communication...................................................................................84

Incumbent Deterrence...................................................................................................87

CHAPTER 3: METHODOLOGY................................................................................................92

Research Design......................................................................................................................92

The Sample.............................................................................................................................92

Pre-Study...............................................................................................................................93

Data Collection Results.........................................................................................................95

Online Survey Response Dynamics......................................................................................99 Incentives............................................................................................................................101 Research Instrument..............................................................................................................102 Measurements for the Dependent Variable.........................................................................106 Measurements for Mediating Variables..............................................................................108 Adopter’s Perceived Value.............................................................................................109 Adopter’s Perceived Risk................................................................................................111 Measurements for Moderating Variables............................................................................113 Adopter’s External Pressure...........................................................................................113 Adopter’s Readiness........................................................................................................115 Measurements for Independent Variables..........................................................................117 Measurements for Non-relational Factors.....................................................................117 Relative Advantage.....................................................................................................117 Compatibility...............................................................................................................120 Perceived Complexity.................................................................................................122 Perceived Acquisition Costs.......................................................................................124 Perceived Switching Costs..........................................................................................126 Measurements for Relational Factors............................................................................128 Network Externalities..................................................................................................129 Adopter’s Trust of Seller.............................................................................................130 PREV

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Relationship Satisfaction............................................................................................132 Measurements for Supplier’s Market Factors................................................................135

Attractiveness of Offer................................................................................................135 Effectiveness of Communication.................................................................................137 Incumbent Deterrence.................................................................................................139 CHAPTER 4: ANALYSIS.........................................................................................................141 Analysis Overview................................................................................................................141 Treatment of Missing Values..............................................................................................143 Construct Validation.............................................................................................................144 Unidimensionality...............................................................................................................145 Reliability............................................................................................................................147 Convergent Validity............................................................................................................148 Discriminant Validity..........................................................................................................149 Model Re-specification/Modification Indices....................................................................149 Multicollinearity and Outliers.............................................................................................150 Validation of First-Order Measures.....................................................................................152 Dependent Variable............................................................................................................153 Mediating Variables............................................................................................................155 Adopter’s Perceived Value.............................................................................................155 Adopter’s Perceived Risk................................................................................................158 Moderating Variables..........................................................................................................160 Adopter’s External Pressure...........................................................................................160 Adopter’s Readiness........................................................................................................162 Independent Variables........................................................................................................166 Non-Relational Factors..................................................................................................166 Relative Advantage.....................................................................................................166 Compatibility...............................................................................................................169 Complexity..................................................................................................................171 Perceived Acquisition Costs.......................................................................................173 Perceived Switching Costs..........................................................................................177 Relational Factors..........................................................................................................179 Network Externalities..................................................................................................179 Adopter’s Trust of Seller.............................................................................................181 Relationship Satisfaction............................................................................................183 Supplier Market Factors.................................................................................................185 Attractiveness of Offer................................................................................................186 Effectiveness of Communication.................................................................................188 Incumbent Deterrence.................................................................................................191 Validation of Second-Order Variables..................................................................................204 Mediating and Moderating Variables.................................................................................204 Independent Variables........................................................................................................207 Structural Analysis and Model Testing.................................................................................213 Mediating Variables............................................................................................................214 Moderating Variables..........................................................................................................215 Independent Variables and APV.........................................................................................218 Independent Variables and APR.........................................................................................222 PREV

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Table 1 Hypotheses.......................................................................................................................37

Table 2 Survey Response Distribution..........................................................................................97

Table 3 Complete and Partial Survey Responses.........................................................................98

Table 4 Partial Response Breakdown...........................................................................................98

Table 5 Analysis of Partial Responses..........................................................................................99 Table 6 Latent Variables and Dimension Scales - Coding and Quantities...............................104 Table 7 Scale Items - Intention to Adopt.....................................................................................108 Table 8 Scale Items for Adopter's Perceived Value (H1)...........................................................110 Table 9 Scale Items for Adopter's Perceived Risk (H2)..............................................................113 Table 10 Scale Items for Adopter's External Pressure (H3a, H3b)............................................115 Table 11 Scale Items for Adopter's Readiness (H4a, H4b)........................................................117 Table 12 Scale Items for Relative Advantage (H5)....................................................................119 Table 13 Scale Items for Compatibility (H6a, H6b)...................................................................122 Table 14 Scale Items for Perceived Complexity (H7).................................................................124 Table 15 Scale Items for Perceived Acquisition Costs (H8a, H8b)............................................126 Table 16 Scale Items for Perceived Switching Costs (H9).........................................................128

- - viEV CHAPTER 5: DISCUSSION AND RESEARCH IMPLICATIONS.........................................228 Discussion.............................................................................................................................228 Mediating Variables............................................................................................................230 Moderating Variables..........................................................................................................231 Independent Variables........................................................................................................232 Non-Relational Factors.......................................................................................................233 Relational Factors...............................................................................................................235 Supplier’s Market Factors...................................................................................................237 Contributions to Literature....................................................................................................239 Managerial Implications.......................................................................................................242 Limitations of the Study........................................................................................................245 Recommendations for Future Research................................................................................246 References...................................................................................................................................250 Appendixes.................................................................................................................................259 Appendix A Construct References for Dependent, Mediating, and Moderating Variables259 Appendix B Construct References for Independent Variables – Non-Relational Taxonomy...............................................................................................................................................261 Appendix C Construct References for Independent Variables – Relational Taxonomy......263 Appendix D Construct Reference for Independent Variables – Supplier’s Market Taxonomy...............................................................................................................................................265 Appendix E Cover Letter and Survey Introduction..............................................................267 Appendix F Incentive Response Letter.................................................................................269 Appendix G Research Instrument.........................................................................................270 Appendix H Correlations, Means, and Standard Deviations of Second-Order Constructs..282 Appendix I First-Order Factor Distributions.......................................................................284 Appendix J Partial Regression Plots.....................................................................................291 LIST OF TABLES IEW

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Table 17 Scale Items for Network Externalities (H10a, H10b)..................................................130 Table 18 Scale Items for Adopter's Trust of Seller (H11a, H11b)..............................................132

Table 19 Scale Items for Relationship Satisfaction (H12a, H12b).............................................135 Table 20 Scale Items for Attractiveness of Offer (H13a, H13b).................................................136 Table 21 Scale Items for Effectiveness of Communication (H14a, H14b).................................138 Table 22 Scale Items for Incumbent Deterrence (H15a, H15b).................................................140 Table 23 Rotated Component Matrix ITA...................................................................................153 Table 24 Rotated Component Matrix APV.................................................................................156 Table 25 Correlation Matrix of APV..........................................................................................157 Table 26 Rotated Component Matrix APR.................................................................................158 Table 27 Correlation Matrix of APR..........................................................................................160 Table 28 Rotated Component Matrix AEP.................................................................................161 Table 29 Correlation Matrix of AEP..........................................................................................162 Table 30 Rotated Component Matrix ARD.................................................................................163 Table 31 Rotated Component Matrix ARD + TC.......................................................................164 Table 32 Correlation Matrix of ARD..........................................................................................166 Table 33 Rotated Component Matrix RAD.................................................................................168 Table 34 Correlation Matrix of RAD..........................................................................................169 Table 35 Rotated Component Matrix CPT.................................................................................170 Table 36 Correlation Matrix of CPT..........................................................................................171 Table 37 Rotated Component Matrix CMP................................................................................172 Table 38 Correlation Matrix of CMP.........................................................................................173 Table 39 Rotated Component Matrix PAC.................................................................................174 Table 40 Correlation Matrix of PAC..........................................................................................177 Table 41 Component Matrix PSC...............................................................................................178 Table 42 Correlation Matrix of PSC..........................................................................................179 Table 43 Rotated Component Matrix NET.................................................................................179 Table 44 Correlation Matrix of NET..........................................................................................181 Table 45 Component Matrix ATS...............................................................................................182 Table 46 Correlation Matrix of ATS...........................................................................................183 Table 47 Component Matrix SAT...............................................................................................184 Table 48 Correlation Matrix of SAT...........................................................................................185 Table 49Rotated Component Matrix AOO.................................................................................186 Table 50 Correlation Matrix of AOO.........................................................................................188 Table 51 Component Matrix EOC..............................................................................................189 Table 52 Correlation Matrix of EOC..........................................................................................191 Table 53 Component Matrix IND...............................................................................................191 Table 54 Correlation Matrix of IND...........................................................................................193 Table 55 Initial 1st Order Latent Variable Re-specification......................................................194 Table 56 Re-specified 1st Order Latent Variable CFA Factor Loadings.................................198 Table 57 Chi-Square Difference – First-Order Factor Models..................................................203 Table 58 Construct Level CFA for Mediating and Moderating................................................206 Table 59 Φ Matrix for Construct Level CFA for Mediating and Moderating Variables...........206 Table 60 Construct Level CFA for Independent Variables........................................................210 Table 61 Stepwise Chi-square Difference – Construct Level.....................................................211 Table 62 Φ Matrix for Construct Level CFA for Independent Variables...................................212 PREV

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Table 63 Path Coefficients - Hypotheses Testing.......................................................................225 Table 64 Multiple Regression Analysis.......................................................................................226

LIST OF FIGURES Figure 1. Facility modules being fabricated...................................................................................5

Figure 2. Modular facility being factory assembled.......................................................................6

Figure 3. Facility modules being set in place on site.....................................................................6

Figure 4. Conceptual model: The antecedents of the intention to adopt an innovation...............36 Figure 5. CFA Model ITA..........................................................................................................154 Figure 6. CFA Model APV.......................................................................................................157 Figure 7. CFA Model APR.........................................................................................................159 Figure 8. CFA Model AEP.........................................................................................................162 Figure 9. CFA Model ARD........................................................................................................165 Figure 10. CFA Model RAD......................................................................................................169 Figure 11. CFA Model CPT.......................................................................................................171 Figure 12. CFA Model CMP......................................................................................................173 Figure 13. CFA Model PAC.......................................................................................................176 Figure 14. CFA Model PSC.......................................................................................................178 Figure 15. CFA Model NET.......................................................................................................181 Figure 16. CFA Model ATS.......................................................................................................183 Figure 17. CFA Model SAT.......................................................................................................185 Figure 18. CFA Model AOO......................................................................................................188 Figure 19. CFA Model EOC......................................................................................................190 Figure 20. CFA Model IND.......................................................................................................192 Figure 21. CFA Model Mediating and Moderating Variables...................................................205 Figure 22. CFA Model Independent Variables..........................................................................209 Figure 23. Structural Model of Mediating Variables to Dependent Variable...........................215 Figure 24. Structural Model of Moderating Variables to Mediating Variables........................218 Figure 25. Structural Model Independent Variables to Mediating Variable APV.....................221 Figure 26. Structural Model of Independent Variables to Mediating Variable APR.................224 Figure 27. Conceptual Model with Path Coefficients................................................................227 Figure 28. Distribution curves of Complexity (CMP)...............................................................235 Figure 29. Distribution curves for Adopter’s Trust of Seller (ATS)..........................................237 Figure 30. Distribution curves for Effectiveness Of Communications (EOC)..........................238 Figure 31. Facility modules being fabricated.............................................................................268 Figure 32. Modular facility being factory assembled.................................................................268 Figure 33. Facility modules being set in place on site...............................................................268 Figure 34. Distribution curve for Intention to Adopt (ITA).......................................................284 Figure 35. Distribution curves for Adopter’s Perceived Value (APV)......................................284 Figure 36. Distribution curves for Adopter’s Perceived Risk (APR).........................................285 Figure 37. Distribution curves for Adopter’s External Pressure (AEP).....................................285 Figure 38. Distribution curves for Adopter’s Readiness (ARD)................................................285 Figure 39. Distribution curves for Relative Advantage (RAD).................................................286 Figure 40. Distribution curves for Compatibility (CPT)............................................................286 Figure 41. Distribution curves for Complexity (CMP)..............................................................286 PREV

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Figure 42. Distribution curves for Perceived Acquisition Costs (PAC)....................................287 Figure 43. Distribution curve for Perceived Switching Costs (PSC).........................................287

Figure 44. Distribution curves for Network Externalities (NET)...............................................288 Figure 45. Distribution curves for Adopter's Trust of Seller (ATS)..........................................288 Figure 46. Distribution curves for Relationship Satisfaction (SAT)..........................................288 Figure 47. Distribution curves for Attractiveness of Offer (AOO)............................................289 Figure 48. Distribution curves for Effectiveness of Communication (EOC).............................289 Figure 49. Distribution curves for Incumbent Deterrence (IND)...............................................290 Figure 50. Partial Regressions Plots for Mediating Variables - APV, APR → ITA..................291 Figure 51. Partial Regression Plots for Moderating Variables - APR, APEP → ITA..............291 Figure 52. Standardized Multiple Regression Plot for Independent Variables →APV, →APR.

.............................................................................................................................................291 Figure 53. Partial Regression Plots for Independent Variables → APV....................................292 Figure 54. Partial Regression Plots for Independent Variables → APR....................................293

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CHAPTER 1: INTRODUCTION

Intention to Adopt - 1 - Importance of Research in Innovation Diffusion and Relationship Marketing in Industrial Markets

While innovation is at the core of technological advancement (Frontini & Richardson, 1984), innovations are usually met with skepticism (Higgins & Hogan, 1999). Manufacturers trying to penetrate industrial markets by introducing innovative products are faced with the challenge of commercial acceptability in order to perpetuate that innovation (Higgins & Hogan, resistance to change from the market (Sjöström, 2003). Both relationship marketing theories and

Relationship marketing has received substantial interest in the marketing research

community, both from the consumer and industrial market standpoint (Gao, 1998; Hibbard,

Hogan, & Smith, 2003; Lichtenthal & Long, 1998). Relationship marketing is differentiated from satisfaction among various parties, particularly in organizational purchasing environments (Gronroos, 1994).

Similar research points out the significant difference and unique characteristics of

industrial marketing relationships compared to consumerism (Choffray & Lilien, 1978; Gao, 1998; Stafford & Stafford, 2003). The uniqueness of relationship marketing in industrial markets poses interesting dynamics for both researchers and practitioners, especially in the area of market penetration factors involved with the introduction of an innovative product.

The innovation adoption decision can be considered as one of the most complex

decisions an organization will be faced with, because no prior experience with buying the

innovation exists (Frambach, 1993). Innovations are identified as new ideas, practices, or objects PRgeneral marketing theories by emphasis on establishing high levels of trust and relationship EVIEinnovation diffusion theories address this problem, to some extent. W1999). However, commercialization of an innovative industrial product is usually met with

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Intention to Adopt - 2 - perceived as new to an individual or organization (Damanpour, 1991; Frambach, 1993).

Technological innovations are generally more complex products or concepts processing

attributes that potential adopters may be unfamiliar with (Gatignon & Robertson, 1986), lending

substantial complexity to the adoption process. The phenomenon of adoption is the process discussed in detail within innovation diffusion theory, which analyzes the accumulation and perpetuation of users of an innovation within the boundaries of a society, market, or industry (Frambach, 1999; Rogers, 2003).

Research into the diffusion of innovations has received substantial attention, also

(Chwelos, Benbasat, & Dexter, 2001; Damanpour, 1991; Frambach, 1993; Frambach &

Schillewaert, 1999; Gatignon & Robertson, 1986; Rogers, 2003). However, while innovation diffusion theorists have analyzed multiple stages of the adoption process, their interpretations

Where some previous researchers have analyzed innovation diffusion in different stages, this study presents a conceptual model that focuses on the intention to adopt stage, which has been identified as the most critical stage of the adoption process (Dickson, 1976; Lee & Allaway, 2002), especially within industrial markets (Chwelos et al., 2001). The criticality of this stage is felt to equally dependant upon marketing dynamics, specifically those tied to the more recent attention of relationship marketing aspects (Dwyer, Schurr, & Oh, 1987; Gronroos, 1994; Gwinner, Gremler, & Bitner, 1998; Henning-Thurau, Gwinner, & Gremler, 2002; Morgan & Hunt, 1994; Rao & Perry, 2002; Sharma, Tzokas, Saren, & Kyziridis, 1999; Zinkhan, 2002).

Researchers have discussed innovation adoption from generalizable factors to specific market niche aspects (Eveland, 1979). This study applies the respective theories towards a holistic approach to form a better understanding of the behavioral referents associated with the phenomenon under an applied circumstance (Eveland, 1979).

PREVhave varied in respect to the different stages. IEW

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attitudes regarding the innovation of modular technology for the construction and delivery of

facilities for the manufacturing of pharmaceutical products. The innovation, referred to as Intention to Adopt - 3 - The specific application of this study is an empirical measurement of decision markers’

Modular Facility Technology is considered a discontinuous innovation (Gatignon & Robertson, 1986) in respect to the “conventional” approach currently utilized within the industry for a similar end product. This innovation may even border on being a disruptive technology in the view of some emerging innovation studies, where it appeals to non-users (e.g., companies that contract others to make their drugs) by offering a simpler solution to the conventional alternative, which opens up new markets. For example, E-trade for the amateur investor is representative of a disruptive innovation (Christensen, Johnson, & Rigby, 2002). However, the relevance of classifications will be discussed further in regards to the construct of incumbent

The attributes of modular technology, as applied to the construction industry, has been analyzed in depth by The Construction Industry Institute, CII, a research venture within the University of Texas, Austin, which has conducted the targeted study Prefabrication,

Preassembly, Modularization, and Offsite Fabrication in Industrial Construction: A Framework for Decision-Making (2002). The CII study served as the basis for establishing the attributes of the innovation, defined under the construct of relative advantage.

The conceptual model in this study is based upon factors extracted primarily from

innovation diffusion and relationship marketing studies. Refinement of the model is discussed further in chapter 2 and depicted in Figure 4 in the respective chapter. This study measured developed constructs within a market niche focused specifically on the provision of new

pharmaceutical manufacturing facilities. Access to respective decision makers within this market niche was sourced through the International Society for Pharmaceutical Engineering, ISPE, PREVdeterrence. IEW

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Intention to Adopt - 4 - which is a global, not-for-profit membership organization for pharmaceutical manufacturing

professionals (source: ).

Modular Facility Technology

The innovation of modular facility technology provided an excellent opportunity to

further research the phenomena of the intention to adopt while it is in the early adopters phase of the adoption curve (Rogers, 2003). This technology is not as ubiquitous as other innovations of focuses in adoption intention research such as information technology as researched by Chwelos et al. (2001), and self-service technology as researched by Lee and Allaway (2002), which were in the early to late majority adoption phase. Thusly, the research conducted in this study provides further insight into the influences of the intention to adopt an innovation where the perceived

The innovation of modular facility technology examined in this study is a relatively new Stockholm, Sweden. At the time of this study, only a small fraction of the pharmaceutical manufacturing companies has utilized this technology. However, the number is increasing

annually as the innovation diffuses (Pharmadule-Emtunga, 2004). This innovation is not as well known as other technologies utilized by other adoption researchers, such as: (a) laptops

computers by Gatignon and Robertson (1989); (b) information technology by Chwelos et al. (2001); or (c) the generalized topic of foreign technology by Kia-ming Au and Enderwick (2000). However, the concept of modular technology is neither new nor unique, and has been utilized in the construction industry for a long time. The Statue of Liberty was one of the most notable modularly constructed structures in the United States history (Levine & Story, 1954). Furthermore, modular homes are very commonplace and widely accepted.

PRand complex innovation. The technology was introduced globally in 1986, originating in EVvalue and risk are not as mitigated by a larger number of adopters. IEW