New Wine in Old Bottles? The Role of Status and Market Identity in Creating a 'Digital Media' Catagory.

Abstract

In this dissertation, I examine the role of the status and market identity in the adoption of a discontinuous technology, and theorize how status, market identity, and technology mutually shape each other in the diffusion process. Specifically, I study the effects of status and market identity on adoption timing, form, and performance of the discontinuous technology. Middle-status organizations perceive the new technology as an opportunity for gain, whereas high- and low-status organizations as a threat of loss. Middle-status organizations, therefore, adopt the discontinuous technology first and develop an adoption form that emphasizes the distinct features of the new technology. However, high-status organizations tend to have the best adoption performance by choosing not to be the first to adopt the discontinuous technology (to avoid any uncertainty related to it) and by focusing on aspects similar to the existing technology in implementation. I find strong support for my arguments in statistical analyses of the digital media adoption of U.S. daily newspapers from 1993 to 2009. By using the cumulative number of the Pulitzer Prizes as an indicator of status, I found that middle-status newspapers with two Pulitzer Prizes tended to be the first to launch their websites. In addition, newspapers that won four Pulitzer Prizes also had the most interactive websites, which challenges the core notion that newspapers are news producers. High-status newspapers, however, had better print- and online-readership because they were not the first to launch their own websites and developed websites that did not emphasize the distinctive aspect of the new technology, that is, interactivity. My dissertation contributes to research in strategy and organizational theory that focuses on the importance of discontinuous technologies and status in markets by examining how status creates structural inertia despite the introduction of a discontinuous technology and by theorizing the conditions under which middle-status actors, a group of organizations traditionally viewed to be the least innovative, can be the most innovative.