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Introduction The task of deciding when and how to innovate is not an easy one. Consider the following managerial quandaries: . A CIO has joined a firm that lags in the adoption of emerging information technologies. He wonders: just how innovative should this firm be going forward, and what can be done to position it to be more willing and able to assume the challenge of early adoption? . A VP of marketing resides in a firm that generally leads in IT innovation, and must decide whether to endorse the immediate adoption of a particular innovation with major implications for marketing strategy. She wonders: are her firm's needs in this area and "readiness" to adopt sufficient to justify taking the lead with this specific innovation? If so, how should the assimilation process be managed? . A product manager must design a deployment strategy for an innovative software development tool. He wonders: how fast can this technology diffu

This article identifies the emergence of the institution-based view as a third leading perspective in strategic management (the first two being the industry-based and resource-based views). We (a) review the roots of the institution-based view, (b) articulate its two core propositions, and (c) outline how this view contributes to the four fundamental questions in strategy. Overall, we suggest that the institution-based view represents the third leg of a strategy tripod, overcomes the long-standing criticisms of the industrybased and resource-based views ’ lack of attention to contexts, and contributes significant new insights as part of the broader intellectual movement centered on new institutionalism.

This paper aims to clarify the concept of business models, its usages, and its roles in the Information Systems domain. A review of the literature shows a broad diversity of understandings, usages, and places in the firm. The paper identifies the terminology or ontology used to describe a business model, and compares this terminology with previous work. Then the general usages, roles and potential of the concept are outlined. Finally, the connection between the business model concept and Information Systems is described in the form of eight propositions to be analyzed in future work.

This paper investigated the relationship between Internet-enabled supply chain integration strategies and performance in manufacturing and services. It summarizes the literature on demand and supply integration and describes four web-based strategies. A stratified random sample was collected from UK manufacturers and services, and there was strong evidence that demand chain management (DCM) led to the highest performance in manufacturing, but few signs of DCM in services. Manufacturers and services relying on only web-based demand or supply integration outperformed their low integration counterparts, but lagged DCM in manufacturing. The study also investigated DCM adoption drivers and found that rational efficiency and bandwagon effects drove change. The findings have some important implications for theory as well as for manufacturing and service companies interested in improving their performance.

Although organizational innovation with information technology is often carefully considered, bandwagon phenomena indicate that much innovative behavior may nevertheless be of the “me too” variety. In this essay, we explore such differences in innovative behavior. Adopting a perspective that is both institutional and cognitive, we introduce the notion of mindful innovation with IT. A mindful firm attends to an IT innovation with reasoning 1 Jane Webster was the accepting senior editor for this paper. Swanson & Ramiller/Innovating Mindfully with IT RESEARCH ARTICLE grounded in its own organizational facts and specifics. We contrast this with mindless innovation, where a firm’s actions betray an absence of such attention and grounding. We develop these concepts by drawing on the recent appearance of the idea of mindfulness in the organizational literature, and adapting it for application to IT innovation. We then bring mindfulness and mindlessness together in a larger theoretical synthesis in which these apparent opposites are seen to interact in ways that help to shape the overall landscape of opportunity for organizational innovation with IT. We conclude by suggesting several promising new research directions.

Do outside directors on corporate boards make a difference in firm performance during institutional transitions? What leads to the practice of appointing outside directors in the absence of legal mandate? This article addresses these two important questions by drawing not only on agency theory, but also resource dependence and institutional theories. Taking advantage of China’s institutional transitions, our findings, based on an archival database covering 405 publicly listed firms and 1211 company–years, suggest that outsider directors do make a difference in firm performance, if such performance is measured by sales growth, and that they have little impact on financial performance such as return on equity (ROE). The results also document a bandwagon effect behind the diffusion of the practice of appointing outsiders to corporate boards. The article not only highlights the need to incorporate multiple theories beyond agency theory in corporate governance research, but also generates policy implications in light of the recent trend toward having more outside directors on corporate boards in emerging economies. Copyright © 2004 John Wiley & Sons, Ltd. Do outside directors on corporate boards make a difference in firm performance? Agency theory suggests that a board comprised of a greater proportion of outside directors, due to their presumed independence, may theoretically lead to better firm performance (Jensen and Meckling, 1976; Shleifer and Vishny, 1997). However, empirical researchers report that overall, there is little significant relationship between outside directors and firm performance (Dalton et al., 1998; Finkelstein and Hambrick, 1996). Consequently, Dalton et al. (1998: 285) argue that ‘consideration of multiple theories [beyond agency theory]... may lead to a more complete understanding. ’ We agree, and add that Key words: outside directors; firm performance; institutional transitions; China

A Dynamic Theory of Organizational Choice A central proposition in organization theory is that discrete organizational forms are matched to environmental conditions, market strategies, or exchange conditions. This paper develops a contrary theoretical proposition. We argue that efficiency may dictate modulating between discrete governance modes (i.e., structural modulation) in response to a stable set of exchange conditions. If governance choices are discrete as much of organization theory argues, then the consequent steady-state functionality delivered by these organizational forms is itself discrete. However, if the desired functionality lies in between the steady-state functionality delivered by two discrete choices, then efficiency gains may be available by modulating between modes. We develop an analytical model of structural modulation and examine factors that influence when modulation is efficiency enhancing as well as the optimal rate of modulation. We conclude that, under certain conditions, structural modulation is efficiency enhancing. Further, contrary to theories that highlight the potentially destructive consequences of inertia on

Abstract This article challenges the tendency of the information systems literature to subsume IT innovation in processes of organizational change, either with the role of ``enabler' ' of organizational objectives, or as an instrument appropriated by situated organizational actors. Using institutionalist theory, the relationship between information systems development and organizational transformation is studied as the interaction of two institutionalization processes: the increasing momentum and legitimation of IT innovation; and the organizational efforts for the substitution of established structures and activities with new ones which often do not command adequate legitimacy. Such analysis suggests that IT innovation in organizations is to a large extent sustainable by its own institutional forces, irrespective of contribution to the processes of organizational change. This perspective is demonstrated with the case study of the Mexican oil company, Pemex, where IT projects have played a large part in its transformation from a stateowned to private enterprise.

access to the managers we spoke to and surveyed, and the managers themselves who so generously gave us their time and thoughts about these issues. We would also like to thank Jennifer Aaker, Sally Blount, Kathy Eisenhardt, Pam Haunschild, Robert Sutton, Michael Morris, Lara Tiedens, George Wu, the associate editors, and the anonymous reviewers who gave us so many helpful comments on drafts of this paper. 2 This paper compares how managers value knowledge from internal and external sources. Although many theories account for favoritism toward insiders, we find that preferences for knowledge obtained from outsiders are also prevalent. Two complementary case studies and survey data from managers demonstrate the phenomenon of valuing external knowledge more highly than internal knowledge and reveal some mechanisms through which this process occurs. We found evidence that the preference for outsider knowledge is the result of managerial responses to 1) the contrasting status implications of learning from internal versus external competitors, and 2) the availability or scarcity of knowledge—internal knowledge is more readily available and hence subject to greater scrutiny, while external knowledge is more scarce, which makes it appear more special and unique. We conclude by considering some consequences of external knowledge preference for organizational functioning. 3 1.