All else equal, the likelihood of deciding to adopt an innovation increases with the extent to which perceived benefits outweigh costs. When this occurs, the perceived risk of adoption is likely to be low (see Figure 1) and a decision to adopt is likely to be made. As shown below, a decision to adopt also is more likely when an organization has the capacity to manage down-side risk (e.g., slack resources are available) and when the organization has a past history or propensity to take risks.

Figure 1. Phase I: The Decision to Adopt an Innovation as a Decision Under Risk

Finally, as indicated in Figure 1, the variability in the perceived risk of adopting, the capacity to manage adoption-related risks, and the propensity to take risks is expected to be explained by a host of antecedent variables that span multiple levels of analysis. These constructs as well as their antecedents will be measured in the research.

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