HUO, YANGCHUNG PAUL; PHD

                        UNIVERSITY OF CALIFORNIA, BERKELEY, 1987
 
                        BUSINESS ADMINISTRATION, MANAGEMENT (0454)
 

                         Drawing on the transaction-cost theory of economics, a theortical model is developed to explain how
                         organizational boundaries influence the decision to adopt a technological innovation over time.
                         Organizational boundaries are defined both vertically and horizontally in terms of vertical integration and
                         breadth of diversification. Specific hypothesis posit the mechanisms by which organizational boundaries
                         influence the timing of innovation adoption. These include internal resource allocation, commitment to
                         specific technologies, transaction costs, and interstage coordination. The empirical analysis uses data on
                         the diffusion of new microprocessors across all manufacturing firms in the personal computer industry.
                         The findings suggest that (1) organizational boundaries do affect the timing of adoption, but their effects
                         differ across different generations of microprocessors; (2) other organizational variables, such as size and
                         age, remain significant factors after the boundary variables have been controlled, but their effects cannot
                         be reliably assessed unless the life-cycle stage of the microprocessor technology is taken into account;
                         (3) some interactions between the boundary variables and size or age help provide a more complete
                         explanation of the innovation-adoption behavior of personal computer firms; and (4) the CEO's
                         background and tenure may play crucial roles in affecting the propensity to adopt innovations in the
                         personal computer industry, although their effect deviates from what has been predicted by common
                         wisdom.

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