Determinants of Information and Communication Technology Adoption in Municipalities

Abstract

Local governments use various technologies to enhance responsiveness to citizens’ demands and to improve efficiency. However, the determinants for technology adoption may vary by the type of technology used. We separately examine the adoption of two different types of information and communication technologies (ICTs): intranet, which increases efficiencies within an organization, and e-services, which aim to increase efficiencies for the public and government agencies. Using 2012 data collected from a national random survey of the managers in 500 municipal governments with populations ranging from 25,000 to 250,000, we find that organizational centralization, work routineness, and personnel constraints are related to the adoption of both intranet and e-services, but that these relationships are mediated by an organization’s risk-taking culture. We also find that external stakeholder influence is positively related to ICT use. Governmental stakeholder influence is related to intranet adoption, and non-governmental stakeholder influence is related to the adoption of e-services. Our study highlights the importance of understanding the dynamics by which different ICTs are adopted. A main contribution lies in the finding that risk-taking culture mediates the relationship between structural constraints and ICT adoption in municipal governments.

Keywords

E-government ICT adoption organizational innovation risk-taking culture

Introduction

Public organizations have long been stereotyped as being highly bureaucratized and slow to innovate. Despite their rigid structures and the lack of flexibility to accommodate client and citizen needs (Bozeman, 2000; Rainey, Pandey, & Bozeman, 1995), public managers have made efforts to adopt organizational innovations. This article investigates the effect of both structural and cultural factors of government on innovation, in particular, how these effects are differently related to the types of e-government technologies adopted by governments.

Although the definition of “organizational innovation” remains ambiguous (Lam, 2005), scholars strive to understand this multidimensional concept by examining different organizational aspects including the structural characteristics (Mintzberg, 1979), organizational change (Hannan & Freeman, 1977), and organizational learning processes (Duncan & Weiss, 1979). We define innovation as the adoption of an internally generated or purchased device, system, policy, program, process, product, or service that is new to the organization (Daft, 1982; Damanpour & Evan, 1984; Zaltman, Duncan, & Holbek, 1973). Accordingly, the adoption of information and communication technologies (ICTs) is an example of innovation in the public sector.

Ho (2002) noted that local governments are undergoing a transformation to the e-government paradigm. In this transition, local governments are moving from the traditional bureaucratic paradigm, which emphasizes departmentalization and formalization, to the “e-government” paradigm, which emphasizes coordinated network building, external collaboration, and customer service. Ho argued that innovation is evident in the website designs of local governments, shifting from administrative orientation that mirrors the organizational structure, to informational orientation and user orientation that emphasize directness and extensiveness in information presentation and information needs specific to each user group.

“The delivery of information and services online via the Internet or other digital means” (D. M. West, 2000, p. 2) and the “e-government” paradigm induce changes within the organization. Local governments often pursue e-government initiatives with the hopes of improving the delivery of public services and increasing organizational efficiencies. For example, offering services online can improve access to government resources, improve efficiencies, and reduce costs for government agencies. Similarly, ICTs can improve administrative functions within local governments. The use of an intranet for internal operation is an example of such influence, improving operational efficiency and enabling faster and better communication within an organization (Fountain, 2001; Gore, 1993). Although researchers have noted the stages or types of e-government, including information provision, e-services, e-participation, and e-democracy (Moon, 2002), much of the empirical work on e-government and ICT adoption and use treats these technologies as interchangeable, paying little attention to their different goals and determinants.

Here we investigate the determinants of two types of ICTs in municipalities: intranet and e-services. Specifically, we investigate the ways in which organization factors such as work routineness, organizational centralization, personnel constraints, and external stakeholder influence affect administrative and technical innovation. The contributions this study strives to make are as follows. First, the organizational factors examined in this study, such as work routineness, organizational centralization, personnel constraints, and external stakeholder influence, are salient in public organizations; therefore, the study contributes to the public management literature by investigating the relationship between bureaucracy and innovation adoption. Second, using path analysis, we develop a model to formally test the relationships between organizational structure and culture on ICT adoption. Third, we explore the mechanisms through which structural and cultural factors interact and are related to e-service and intranet use, using risk-taking as a mediator in the model. Next we discuss the literature and propose hypotheses for this study. Then we present the data and methods followed by the results of the analysis. We conclude with a discussion of the findings.

Literature and Hypotheses

Organizational Innovation and E-Government

Innovation takes different forms. To account for the wide variance among the empirical findings of innovation, researchers have developed different typologies of innovations and relied on subtheories of organizational innovation (Damanpour, 1991; Downs & Mohr, 1976). For example, Dewar and Dutton (1986) and Nord and Tucker (1987) took an organizational change perspective differentiating between radical and incremental innovations. They argued that innovation adoption creates changes in an organization’s structure and function, but the extent of these changes is not equal leaving innovations to be classified according to the degree of change they bring to the organization. Daft (1978) proposed a “dual-core model” and characterized organizational innovation as administrative and technical. Administrative innovations involve organizational structure and administrative processes that are indirectly related to basic work activities but more directly related to management, such as the policies of recruitment, allocation of resources, and the structuring of tasks, authority, and reward. Technical innovations, however, pertain to new ideas for new products, services, and production process technologies and thus are related to basic work activities (Daft, 1978; Evan, 1966). Armbruster, Bikfalvi, Kinkel, and Lay (2008), in comparison, categorized organizational innovation into two types: structural and procedural. Structural innovation refers to change and improvements in responsibility delegation, divisional structure of functions, and information flows, whereas procedural innovation refers to the changes in organizational routines, processes, and operations.

In the context of public management, e-government adoption is often viewed as an organizational innovation, focused on processes, products, structure, management, administrative tasks, or technical activities. Initial research on e-government innovations focused on the adoption of websites. For example, Moon (2002) found that city size and form of government were positively associated with the adoption of municipal websites and the longevity of those cites. Today, municipal websites are ubiquitous, but quality and purpose of websites vary. Some cities may offer advanced, interactive website services including blogs, wikis, and videos. Still others will enable citizens to pay bills and fines or request services. More advanced municipalities might also use their websites and servers for internal work activities, via an intranet or cloud computing. But, though these technologies are widespread, few municipalities take advantage of their full potential (Coursey & Norris, 2008; Moon & Norris, 2005) and some cities adopt certain types of technologies, whereas others do not.

E-services enable the electronic delivery of services, including online job applications, license renewals, form submission, and online payment for services (Edmiston, 2003; Li & Feeney, 2012). Similar to the technical innovation described by Daft (1978), e-services aim at enhancing citizen access to services and improving existing processes and basic work activities. E-services aim to facilitate government linkages with citizens, businesses, and clients, improving transactions, communications, and provision of services. Moon (2002) described e-services as the third stage of e-government, where service and financial translations occur, which comes after the earlier stages of information dissemination (I) and two-way communication (II) but before vertical and horizontal integration (IV) and political participation (V).

In contrast to external serving e-services, an intranet is an important tool for streamlining operations within organizations (e.g., government) and enhancing administrative processes. An intranet is an electronic network used for communication, data exchange, and business operations that are accessible to organizational members (Welch & Pandey, 2007). An intranet requires secure government servers and often includes central databases for cooperative activities (Moon, 2002). An intranet can greatly increase functionality internal to the organization, serving as an effective and efficient management tool for collecting, storing, organizing, and sharing large amounts of data and information (Moon, 2002). Here intranet is analogous to what Daft characterized as administrative innovations, encompassing functions such as human resources management, procurement, financial reporting, and interdepartmental collaboration.

Some argued that e-government technologies occur in stages, with more basic information dissemination activities occurring first, followed by more advanced two-way communications, and finally, integration and political participation (Moon, 2002). Although it is possible that e-government occurs in stages, it is also possible that these activities occur simultaneously, or in a different order. This research, while not concerned with the order of adoption, is concerned with understanding the factors that are related to the use of particular technologies in municipal departments. Underlying this research is the understanding that different technologies serve distinct purposes and sometimes differing stakeholders. Jun and Weare (2011) noted that the motivations driving e-government adoption vary because the benefits of e-government are multidimensional. As e-services aim to improve the delivery of services to citizens and stakeholders external to the organization and intranet serves to improve internal administrative functions, it follows that structural and cultural factors may help explain innovation adoption.

Structural Determinants for ICT

Scholars in management and organizational sociology have long strived to understand organizational factors that affect innovation adoption, including specialization (Kimberly & Evanisko, 1981; Wolter & Veloso, 2008), formalization (Burns & Stalker, 1961; M. A. West, Smith, Feng, & Lawthom, 1998), and centralization (Aiken & Hage, 1971; Damanpour, 1996; Jun & Weare, 2011). Here we investigate how organization factors, including organizational centralization, work routineness, personnel constraints, and stakeholder influences are related to ICT adoption in municipal governments.

Centralization

Centralization reflects the locus of authority and decision making, and the extent to which decision-making autonomy is dispersed or concentrated in an organization (Pfeffer, 1981). Thompson (1965) noted that centralization, the concentration of decision-making authority, prevents the adoption of innovative solutions because innovation requires the dispersion of power. A centralized authority fails to cultivate participatory work environments that facilitate innovation by increasing organizational members’ awareness, commitment, and involvement. An advocate for reinventing government would criticize the centralized structure of public organizations as being an obstacle to improving efficiency and enhancing responsiveness to citizen needs (Osborne & Gaebler, 1992).

There is not a clear consensus about the relationship between centralization and technology use. In the dual-core model, Daft (1978) argued that centralization is positively associated with administrative innovation. With a sample of 13 suburban high school districts in Cook County, Illinois, Daft found that most of the administrative innovations, innovations in operational procedures and class arrangements, were initiated by administrators who were in a position that gave them a big picture view of the overall operational process. Based on this finding, Daft suggested that high centralization may contribute to administrative innovations.

In the context of e-government, Jun and Weare (2011) found no statistically significant relationship between administrative centralization and the adoption of e-services, whereas Li and Feeney (2012) found organizational centralization to be negatively related to e-service adoption in local government. Similarly, Newell, Scarbrough, and Swan (2001) concluded that an intranet is more effective in organizations where the decision capacity is more dispersed rather than concentrated in the upper level. In contrast, Pandey and Bretschneider (1997) found that an intranet can be used in ways that reinforce existing centralized structures, functional boundaries, and status differences.

Damanpour (1991) conducted a meta-analysis on the determinants for organizational innovations and found that, taking into account the moderating roles of organizational type and innovation scope, centralization had a negative effect on innovation. Therefore, we use Damanpour’s meta-analysis as a guide to our hypothesis, expecting that centralization will be negatively related to ICT adoption (both e-services and intranet):

Hypothesis 1a (H1a): Organizational centralization is negatively associated with e-service adoption.

Hypothesis 1b (H1b): Organizational centralization is negatively associated with intranet adoption.

Work routineness

Burns and Stalker (1961) compared two kinds of organizational systems, the mechanistic and the organic, and suggest that the organic model is more suited for change and conducive to innovation. Aiken and Hage (1971) further examined Burns and Stalker’s hypothesis and found that the diversity in tasks—a dimension of organic organization—is directly related to innovation because it promotes the cross-fertilization of ideas in an organization. As the diversity of tasks in more organic organizations is related to innovation, we expect that increases in work routineness, defined as a lack of variety in an organization’s work tasks (DeHart-Davis & Pandey, 2005), will be negatively associated with innovation in public organizations. In fact, Li and Feeney (2012) also found work routineness to be negatively related to the use of communication technologies and e-services. We extend their study by investigating the effect of work routineness on the use of both e-services and intranet, two types of ICT that are aimed at responding to external needs of citizens and internal operation, respectively. In particular, we hypothesize that

Hypothesis 2a (H2a): Work routineness is negatively associated with e-service adoption.

Hypothesis 2b (H2b): Work routineness is negatively associated with intranet adoption.

Personnel constraints

Inflexible personnel rules are an important descriptor of many public organizations (Bozeman & Bretschneider, 1994; DeHart-Davis & Pandey, 2005). Rigid personnel rules and an emphasis on compliance with rules and procedures is often a mechanism for public organizations to ensure accountability. Although many reformers call for a reduction in personnel restrictions and increases in personnel flexibility through performance-based rewards and other reforms, others note that many of the personnel rules in force in the public sector ensure accountability and protection for workers. Thompson (2006), for example, challenged the principles of performance-based management, arguing that performance objectives allow supervisors to have greater ability to influence their subordinates’ pay, and consequently weaken the protection for civil servants from retribution by their supervisors, especially in instances of noncompliance with inappropriate directives. In his view, Weberian bureaucratic rules and job tenure guard the accountability and technical competence and preserve public service ideals. According to this Weberian ideal, public employees should devote their loyalty and training to the impersonal and functional purposes of the positions they serve, while job tenure guarantees an objective discharge of specific office duties free from personal considerations (Weber, 1922/1946). Believing that bureaucratic rules represent the foundation of public laws, Moe and Gilmour (1995) also criticized proponents of government reinvention for casting aside red tape, because, they argue, such reinventions put entrepreneurial management before the law. As Kettl and Fesler (2005) noted, “Public organizations exist to administer the law, and every element of their being—their structure, staffing, budget, and purpose—is the product of legal authority” (p. 10).

Although it is important to acknowledge the important role of law and personnel protections in the public sector, at the same time these constraints inevitably create obstacles for enhancing organizational effectiveness (Pandey, Coursey, & Moynihan, 2007). According to Brewer and Walker (2010), personnel constraints are a stumbling block for improving performance. Aiming at improving efficiency and service responsiveness, the adoption of ICT may require incentives that motivate employees to experiment with new ideas to propose and eventually implement innovation. ICT adoption might also increase or decrease managerial workloads as e-services duplicate in-person services or an intranet speeds document sharing and communication within the organization. An inflexible personnel system that fails to effectively tie performance to pay and reward those who effectively adopt new technologies may thus impede innovation. Therefore, we hypothesize,

Hypothesis 3a (H3a): Personnel constraints are negatively associated with e-service adoption.

Hypothesis 3b (H3b): Personnel constraints are negatively associated with intranet adoption.

External stakeholders

Much of the previous research on organizational innovation does not take into account the influence from external stakeholders, a factor that is critical in public organizations that are responsible to citizens and are often required to be responsive to the demands of citizens, politicians, organized groups, and other interests. While acknowledging the value of innovative thinking and solutions in the New Public Management (NPM) regime, which emphasized cost effectiveness, public sector downsizing, and marketization (Osborne & Gaebler, 1992), DeLeon and Denhardt (2000) noted the need for equal emphasis on accountability to external stakeholders. To this end, e-government has great promise to enhance public sector efficiency and be more personal, customizing relationships between citizens and their governments. ICTs bring the promise of faster service delivery, increased communication (e.g., Web 2.0 technologies), and a more engaging platform for civic dialogue. In a recent presentation to the Chicago’s Metropolitan Planning Council, Margo Georgiadis (2013), president of the Americas at Google, told the audience, “The Internet is the greatest tool for democracy, ever.” Researchers note that technologies can bring increased access to a more democratic government and that these technologies are in high demand from government stakeholders (Edmiston, 2003). Indeed, many innovative practices in government, especially in areas of technology and computer usage, are the result of influence from business leaders and citizens, who see demonstrated successes of ICT adoption in the business sector (Ho & Ni, 2004). Jun and Weare (2011) found that municipalities with wealthier and more educated residents are more likely to be early adopters, likely due to the increased residential demand for e-government services. West and Berman (2001) confirmed that customer demand is a significant driving force for information technology (IT) usage in city governments, finding that the significance of constituency pressure is even greater than factors such as city council members’ and managers’ views toward information technologies.

Public organizations are not only accountable to citizens but also to other government stakeholders including legislatures, courts, and public officials (Lynn, 2001). Johnston and Romzek (1999) suggested four types of accountability: hierarchical, legal, political, and professional, noting the importance of higher authorities, courts, and political actors to which public organizations should be responsive. Ahn (2011) examined the influence of the political environment on e-communication adoption and found political competition to have a significant effect on e-government application. Ahn concluded that although governments are generally disinclined to adopt e-government applications with high communicative impacts, such disinclination dissipates with the presence of a high level of political competition and perceived demand for online communication.

These studies highlight the importance of not only recognizing stakeholder influences on government innovation, but also acknowledging the ways that influence can vary due to different stakeholder needs. In regard to e-government, citizens are interested in enhancing service delivery and accessibility through the Internet; thus they are likely to demand e-services. In comparison, internal organizational stakeholders and other government officials will have more motivations to influence the development of intranet services and innovations that improve internal communications, government work activities, data sharing, and other administrative functions. Elected officials and interest groups, speaking for their constituents, may seek the increased use of e-services and intranet services that improve the management of contracts or inter-governmental activities. We expect that different stakeholders exert their influences on municipal adoption of different ICT types, and hypothesize,

Hypothesis 4a (H4a): Governmental stakeholder influence is positively associated with e-service adoption.

Hypothesis 4b (H4b): Non-governmental stakeholder influence is positively associated with e-service adoption.

Hypothesis 4c (H4c): Governmental stakeholder influence is positively associated with intranet adoption.

The Mediating Role of Risk-Taking

In addition to organizational centralization, routineness, personnel constraints, and the influence of external stakeholders, we expect that organizational climate is related to the adoption of innovation. Although public organizations are often perceived as rigid and risk averse, many reforms have sought to increase entrepreneurial values in the public sector. For example, the Reinventing Government movement argues that the bureaucratic model of government is accountable for many inefficiencies and calls for more entrepreneurial, decentralized, flexible designs, encouraging managers to follow the example set by the private sector, take stewardship, and transform the government to be customer and result driven. These reforms, while possibly increasing entrepreneurship and bringing new innovations to public organizations, sometimes require radical change and inevitably expose managers to uncertainty. Innovative initiatives, such as the privatization of public services, expose not only the government but also citizens to a great amount of uncertainty, including issues and concerns about equity, accountability, and other democratic values (Moe, 1987; Rosenbloom, 2001).

Interestingly, the call for an entrepreneurial spirit to transform the public sector emphasizes that being more entrepreneurial should not be equated with taking risks, stating that “entrepreneurs do not seek risks, they seek opportunities” (Osborne & Gaebler, 1992, p. xxi). Osborne and Gaebler (1992) warned that public managers must exercise caution when taking risks, because, “after all, who wants bureaucrats taking risks with their hard-earned tax dollars?” (p. xxi). Innovations inevitably involve risks, and successful innovations require the definition and confinement of risks. In the context of e-government and the adoption of ICTs, which can change not only internal operations but also government interaction with citizens (or, in the language of reinventing government, “customers”), the risks lie in unintended negative consequences. Jun and Weare (2011) asserted that adopting e-government is a risky endeavor because it entails resources, complex technologies, and can potentially disrupt municipal power structures and routines. For example, the use of intranet may change the ways in which human resources management and team collaboration take place within an agency or threaten security with increased data and information sharing in cyberspace. Relying on e-services for payment collection may lead to unequal distribution of services, as some populations do not have access to the Internet, or may increase the risk of fraudulent transactions. A risk-taking culture, defined as perception of an organization’s propensity to take risks (Bozeman & Kingsley, 1998), is needed to cope with the uncertainty that is inevitably introduced by innovation adoption. Thus, we expect that risk-taking will be positively associated with adopting both types of ICT:

Hypothesis 5a (H5a): Risk-taking is positively associated with e-service adoption.

Hypothesis 5b (H5b): Risk-taking is positively associated with intranet adoption.

Indirect Effects via Support for innovation

The mechanism through which organizational determinants interact and affect e-government technology adoption is noteworthy. Both external and internal factors may shape organizational climate, specifically the risk culture perceived by managers. First, public organizations typically have a greater concentration of authority at the top of the organization (Pugh, Hickson, Hinings, & Turner, 1969) and a stronger emphasis on hierarchy as compared with private organizations (Warwick, 1979). Public managers also report a greater desire, compared with their private counterparts, for increased rules and management control (Bozeman & Rainey, 1998). These organizational characteristics can discourage risk-taking culture in the public sector (Bozeman & Kingsley, 1998; Deal & Kennedy, 1982). For example, Bozeman and Kingsley (1998) found internal control to be negatively associated with total risks taken by managers. Because organizational centralization is a structural factor that enhances internal control and dampens risk-taking, we expect that the relationship between organizational centralization and ICT adoption will be mediated by risk-taking, with organizational centralization being negatively associated with risk-taking.

By expecting individuals to behave in a uniform manner, work routineness creates an environment devoid of challenge (DeHart-Davis & Pandey, 2005). Work routineness means more predictable work and outcomes with respect to different tasks (Burton & Obel, 1998; Hall, 1963), and therefore keeps managers from taking risks or introducing more risks into work. Similar to routineness, we would expect personnel constraints to dampen risk-taking, as they are an indicator of organizational constraint. Bozeman (1989) argued that an organization’s behavior can be partially explained by the degree to which external government constraint affects an organization. Bozeman and Kingsley (1998) demonstrated that political control decreases the total risks that managers are willing to take; in particular, external influence by elected officials is likely to have a dampening effect on risk. Although external stakeholders would like to see governments taking innovative approaches to promote efficiency and effectiveness, they are also concerned about how to hold governments accountable in the process of innovation adoption. We expect that increased influence from external stakeholders will be negatively associated with risk-taking. In sum, we expect that the organizational determinants all have indirect effects on ICT adoption because of the mediating presence of risk-taking:

Hypothesis 6 (H6): Organizational factors (centralization, work routineness, personnel constraints, and stakeholder influence) will have an indirect negative effect on ICT adoption.

The indirect effects of both internal and external factors on ICT adoption are illustrated in Figure 1. As indicated in the path model in Figure 1, risk-taking is a mediator through which both internal organizational factors and stakeholder influence affect the adoption of intranet and e-services in municipalities. Figure 1 illustrates the direct and indirect relationships between organizational factors and e-service municipalities; both governmental and non-governmental stakeholders are expected to have significant effects on e-service adoption.

Figure 1.

Organizational determinants (Indirect and Direct) for ICT adoption.

Data and Method

This study used data from a 2012 national random survey of 500 city governments in the United States with citizen populations ranging from 25,000 to 250,000. The two-stage cluster sample design focused on city population and department. We randomly selected 500 cities in the United States. Because there are fewer larger cities in the United States, we sampled all 184 cities with a population 100,000 to 250,000. We then took a random, proportional sample of 316 cities with populations 25,000 to 100,000. The data are weighted to adjust for the sampling procedure. In each of the 500 cities, we surveyed five managers in the following positions: City Manager/City Administrator, Director of Community and/or Economic Development, Finance Director, Director of Parks and Recreation, and Deputy Police Chief. Respondents provided information at the individual level and reported about their respective departments. A total of 2,428 city managers were invited to take part in the survey (the sample was reduced by 72 individuals who could not be reached due to unreachable email addresses). A total of 845 individuals from 429 cities responded to the survey. There was one respondent from 167 cities, two from 146 cities, three from 83 cities, four from 28 cities, and all five individuals responded from five cities. There were no statistically significant differences in city size, department type (e.g., job title), or city between respondents and non-respondents. The adjusted response rate, calculated using the American Association of Public Opinion Research Response Rate Calculator,¹ is 34.8%.

Dependent Variables

Two dependent variables are included in the analysis: Intranet and E-services. Intranet ranges from 0 to 11 and indicates the number of ways in which the respondent’s department uses the intranet, if at all. The questionnaire asked respondents,

Does your department have an intranet (a web server accessible only to local government’s employees, sometimes called a “portal”)? If so, do you use the intranet for the following activities: post job openings for internal recruitments, provide employee benefit forms, provide online report generation, provide online procurement tools, enable project teams to collaborate, enable financial reporting, expand telecommuting staff access to information and data, provide online training, exchange data with employees in other departments or agencies, exchange data with contracted non-government organizations, and collaborate on work with other departments.

For E-services, respondents were asked,

Please indicate if your department currently offers the following online services: (1) online payment for services, (2) online delivery of local government records or department information, (3) online requests for services, and (4) online completion and submission of job applications.

E-services is the sum of the four services offered.

Independent Variables

Respondents were asked to respond to a series of questionnaire items about their organization (e.g., department). The response categories for survey items used to construct organizational centralization, work routineness, personnel constraints, and risk-taking are a 5-point Likert-type scale of agreement (1 = strongly disagree and 5 = strongly agree). Organizational centralization is measured by the mean of the following three items (Aiken & Hage, 1971; Li & Feeney, 2012): (a) There can be little action taken here until a supervisor approves a decision; (b) in general, a person who wants to make his or her own decisions would be quickly discouraged in this agency; and (c) even small matters have to be referred to someone higher up for a final answer (Cronbach’s α = .776). Work routineness is measured by the mean of three survey items: (a) People here do the same job in the same way every day, (b) one thing people like around here is the variety of work (reverse coded), and (c) most jobs have something new happening every day (reverse coded; Cronbach’s α = .652). This scale is adapted from Hage and Aiken (1969) and used in Li and Feeney (2012). Personnel constraint is measured by the mean of the following three items (Feeney & Rainey, 2010; Rainey et al., 1995): (a) The formal pay structures and rules make it hard to reward a good employee with higher pay here; (b) even if a manager is a poor performer, formal rules make it hard to remove him or her from the organization; and (c) because of the rules here, promotions are based mainly on performance (reverse coded; Cronbach’s α = .617). Risk-taking is measured by the mean of two items: (a) Most employees in this organization are not afraid to take risks, and (b) this organization is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take risks (Cronbach’s α = .752).

We operationalized external stakeholder influence using two variables: Governmental stakeholder influence and Non-governmental stakeholder influence. Respondents were asked, “Please indicate the level of influence the following institutions or individuals exert over your department” (response categories: 1 = no influence, 2 = mild influence, 3 = moderate influence, 4 = strong influence, 5 = very strong influence). Governmental stakeholder influence is the mean of responses to items asking managers to indicate the level of influence imposed by the mayor, mayor’s council, other departments within the city, governor, state legislature, state courts, and federal government (Cronbach’s α = .815). Non-governmental stakeholder influence is the mean of responses on the level of influence imposed by business groups, advocacy groups, public opinion, and the media (Cronbach’s α = .837).

The summary statistics for all study variables and correlations are noted in the appendix. To examine whether the measures of the key independent variables (e.g., work routineness, organizational centralization, personnel constraint, governmental and non-governmental controls, and risk-taking) capture distinct constructs, we ran a confirmatory factor analysis (CFA) using Mplus 7 (Muthén & Muthén, 2012). Governmental control was indicated by three item-parcels and non-governmental control was indicated by two item-parcels. Adopting the conventional approach for evaluating CFA models, we examined fit indices of the hypothesized measurement model (Williams, Vandenberg, & Edwards, 2009). Mplus reports the chi-square statistic as well as four fit indices, that is, comparative fit index (CFI), Tucker–Lewis Index (TLI), root mean square error of approximation (RMSEA), and standardized root mean square residual (SRMR). The hypothesized six-factor model had a χ²(89, N = 706) = 259.94, CFI = .95, TLI = .93, RMSEA = .05, and SRMR = .04. All items were specified to load on their corresponding factors. Results show that all observed items and dimensions loaded on their respective latent factors.

Control Variables

We include a set of control variables at the city, department, and individual level. City Size is the natural log of the population of the respondent’s city. To control for the level of professional IT services available in departments, IT Provider captures if the respondent’s organization has an in-house person or department who is responsible for maintaining the department’s website and e-government services (=1) or if the department uses an outside contractor (=0). Previous research indicates that IT departments or external actors can be powerful players in innovation adoption, influencing both what technologies are adopted and how they are designed (Jun & Weare, 2011; Welch & Pandey, 2007). Jun and Weare (2011) found that municipalities with internal providers tend to adopt website technology earlier than those with contractors. As a measure of city professionalism, we include a control variable that is common in this research (Jun & Weare, 2011; Moon, 2002; Moon & Norris, 2005; Tolbert, Mossberger, & McNeal, 2008), Council-Manager Government indicates if the city has a council-manager form of government (=1) or a mayor-council form of government (=0). At the department level, we control for the department of employment with a set of dummy variables for Mayor’s Office (=1), Community Development (=1), Finance (=1), Police (=1), and Parks and Recreation (=1). At the individual level, Job Tenure indicates the number of years the respondent has worked in the current position. We also control for the respondent’s Sex (women = 1), Race (White = 1), Age, and Education (1 = have a graduate degree in business administration or public administration). Table 1 reports the summary statistics for study variables. Table 2 reports the variable correlations.

Table 1.

Summary Statistics.

	n	M	SD	Minimum	Maximum
Dependent variables
Use of intranet	380	7.13	2.87	0	11
Use of e-services	584	2.52	1.35	0	4
Independent variables
Organizational centralization	704	2.37	0.73	1	5
Work routineness	704	2.55	0.68	1	4.67
Personnel constraint	705	3.51	0.81	1	5
Governmental stakeholder influence	716	2.87	0.74	1	5
Non-governmental stakeholder influence	713	2.64	0.75	1	5
Risk-taking	712	2.99	0.86	1	5
Control variables
IT capacity	812	0.57	0.5	0	1
Council-manager government	845	0.71	0.45	0	1
MPA/MBA	703	0.01	0.06	0	1
Age	704	51.84	8.49	23	77
Job tenure	654	7.20	6.51	0	45
Female	830	0.19	0.39	0	1
White	845	0.75	0.43	0	1
ln(population)	845	10.9	0.55	10.2	12.4
Mayor’s office	845	0.17	0.38	0	1
Community development	845	0.22	0.42	0	1
Finance	845	0.16	0.36	0	1
Parks and recreation	845	0.22	0.41	0	1
Police department	845	0.24	0.43	0	1

Note. IT = information technology; MPA/MBA = master of public administration/master of business administration.

Table 2.

Correlation of the Study Variables.

	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19
1. Intranet	1
2. E-services	.339**	1									1
3. Work routineness	.029	.054	1
4. Organizational centralization	−.048	.024	.536**	1
5. Personnel constraint	.022	.014	.242**	.269**	1
6. Governmental stakeholder influence	.016	.019	−.080*	.009	.022	1
7. Non-governmental stakeholder influence	.053	.029	−.174**	−.040	−.038	.454**	1
8. Risk-taking	−.002	−.039	−.523**	−.504**	−.316**	.092*	.127**	1
9. IT capacity	.007	−.058	−.124**	−.050	−.032	−.030	−.035	.093*	1
10. Graduate degree	.012	−.054	.012	−.006	−.016	−.016	.038	.018	.013	1
11. Age	−.006	−.018	−.038	−.100*	−.102**	−.068	−.045	.076	−.090*	−.071	1
12. Community development department	.104**	.034	.053	.096*	−.024	−.009	.055	−.109**	−.070*	−.022	−.040	1
13. Finance department	−.049	−.047	.273**	.134**	.058	.018	−.131**	−.105**	−.074*	.046	.000	−.228**	1
14. Park and recreation department	−.031	.005	−.084*	−.033	−.053	−.197**	.066	.029	.031	−.161**	.044	−.276**	−.227**	1
15. Police department	.012	.022	−.198**	−.175**	.099**	.059	−.104**	.140	.109**	−.054	−.046	−.296**	−.243**	−.295**	1
16. Female	−.019	.036	−.010	−.053	−.053	−.144**	−.075*	.087*	.034	.019	.067	−.044	−.140**	−.031	.182**	1
17. White	.046	−.056	−.075*	−.033	.018	−.125**	.004	.049	.054	−.021	.108**	−.019	.027	.046	−.058	.004	1
18. Job tenure	−.007	−.057	−.017	−.029	−.054	−.032	.007	.086*	−.107**	−.055	.340**	−.015	.032	.097*	−.059	.004	.082*	1
19. Council-manager form of government	−.004	−.029	−.054	−.043	−.105**	−.112**	−.031	.015	.079*	.110**	.013	−.050	.016	−.022	.029	.032	−.008	−.077*	1
20. Population	.034	−.055	−.060	−.056	.041	.104**	.135**	−.004	.123**	.015	.049	.037	−.019	−.035	.026	.011	−.067	−.079*	.001

Note. IT = information technology.

p < .05. **p < .01.

Because the responses from the department managers of each city are the source for organizational factors and e-government technology adoption data, we conducted Harman’s single-factor test (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003) to compare the fit of a one-factor model with the fit of our hypothesized measurement model with each factor capturing a distinct variable. The results show that the one-factor model had a χ²(104, N = 706) = 1694.34, CFI = .51, TLI = .44, RMSEA = .15, and SRMR = .13. The likelihood ratio test had a Δχ²(15, N = 706) = 1434.40, p < .01, indicating that the model with all items loaded on one factor provided a significantly worse fit to the data than our hypothesized model. Harman’s single-factor test indicates that common method bias does not account for a significant amount of variance in the variables collected from the managers.

Method

Similar to Lim and Tang’s (2008) path analysis that examined ICT use in Korea, we use path analysis with clustered standard errors at the city level to test the hypotheses. Because both dependent variables are counted, we use Poisson regression models for estimation. Path analysis allows us to simultaneously estimate both the direct effects of the independent variables and the indirect effects via the mediator. To test the indirect effects of various structural factors via risk-taking on the use of intranet and e-services, we followed the bootstrap procedure recommended by MacKinnon, Lockwood, and Williams (2004); specifically, we used the Monte Carlo Method for Assessing Mediation (MCMAM). The analysis was conducted with Mplus 7.

Results and Findings

Direct Effects on ICT Adoption

Figures 2 and 3 present the coefficients on each variable of interest in the path diagram for predicting intranet and e-service use, respectively. The results do not support H1a or H1b. Organizational centralization does not have a significant direct effect on the adoption e-services or intranet. The model supports H2a: Work routineness has a negative direct effect on e-service adoption (see Figure 2). A one-unit increase in work routineness is related to a 13.7% decrease in the rate of e-service adoption. We do not find support for H2b: Work routineness does not have a significant direct effect on intranet use (see Figure 3). We find partial support for H3. Personnel constraint is significantly and negatively related to intranet and e-service adoption at p < .10. A one-unit increase in personnel constraint is related to a 5.1% and 4.9% decrease in the rate of intranet and e-service adoption, respectively.

Figure 2.

Results of path analysis—Organizational determinants for e-services.

Figure 3.

Results of path analysis—Organizational determinants for intranet.

External stakeholder influence has a positive direct effect on both intranet use and e-services, but the relationships vary based on whether the influence is governmental or non-governmental. We find no support for H4a, that governmental stakeholder influence will be significantly related to e-service adoption. We find support for H4b: Non-governmental stakeholder influence has a positive direct effect on e-services, with a one-unit increase in non-governmental influence being related to an 11.3% increase in the rate of e-service adoption. We confirm H4c: There is a positive relationship between governmental stakeholder influence and intranet adoption, with a sizable effect. A one-unit increase in governmental stakeholder influence is related to a 14.6% increase in the rate of intranet adoption.

The mediator, risk-taking, has no significant direct effect on e-services (H5a), but has a positive, significant direct effect on intranet adoption (H5b). A one-unit increase in risk-taking is related to a 9% increase in the rate of intranet adoption. We find partial support for H6, which stated that organizational factors (centralization, work routineness, personnel constraints, and stakeholder influence) would have an indirect negative effect on ICT adoption. All structural factors, except stakeholder influences, are negatively related to the culture of risk-taking. A centralized organization structure, work routineness, and personnel constraint appear to prohibit a culture of risk-taking.

Indirect Effects via Risk-Taking

The indirect effects of the structural factors on e-service and intranet adoption via risk-taking are the products of the coefficient on the relationship between each predictor and risk-taking, and the coefficient on the relationship between risk-taking and technology adoption. We tested the significance of the indirect effects with a Monte Carlo procedure based on the coefficients and their respective standard errors. Table 3 reports the indirect effects of the organizational determinants on the adoption of e-services and intranet via the mediator, risk-taking. The results show that the indirect effects differ across the two types of ICT: e-services and intranet. Organizational centralization, work routineness, and personnel constraints have negative indirect effects on the adoption of intranet; specifically, these factors are related to a reduction in risk-taking, which is positively related to intranet adoption. In comparison, these organizational factors are not significantly related to e-service adoption. Stakeholder influence does not have a significant indirect effect on either e-services or intranet.

Table 3.

Indirect Effects of Organizational Structural Factors on E-Government via Risk-Taking Culture.

	Intranet			E-services
	Point estimate	95% CI		Point estimate	95% CI
	Point estimate	Lower	Upper	Point estimate	Lower	Upper
Organizational centralization	−0.025	−0.047	−0.007	−0.013	−0.035	0.008
Work routineness	−0.029	−0.057	−0.007	−0.017	−0.045	0.010
Personnel constraint	−0.013	−0.012	0.000	−0.006	−0.017	0.004
Governmental stakeholder influence	0.005	−0.002	0.014	0.003	−0.003	0.011
Non-governmental stakeholder influence	—	—	—	0.000	−0.005	0.005

Note. CI = confidence interval.

Effects of Control Variables

First, we find that respondent job tenure is positively related to the adoption of ICT, but with marginal effects. A 1-year increase in job tenure is related to a 1% and 0.8% increase in the rate of e-service and intranet adoption, respectively. Similarly, manager age is positively related to the adoption of e-services. A 1-year increase in manager age is related to a 0.7% increase in the rate of e-service adoption. Similar to previous findings (Jun & Weare, 2011), larger cities, measured by population, have a wider use of ICT; population is positively related to intranet and e-service adoption. IT capacity is significantly related to the adoption of e-services, but is not significantly related to intranet adoption. Having a designated person or department to maintain ICT use is related to an 11.9% increase in the rate of e-service adoption. ICT adoption also varies by department of employment. Compared with the mayor’s office, respondents in police departments report higher rates of intranet adoption, an increase in the rate by 25.7%. Respondents in community development departments report adopting significantly fewer e-services than Mayor’s offices, decreasing the rate of adoption by 25.9%. Finally, cities with the council-manager form of government report more e-service adoption than mayor-council cities, which we would expect, as council-manager forms of government aim to make municipalities administratively more innovative (Frederickson, Johnson, & Wood, 2004).

Discussion

Before discussing the results, it is important to note the limitations of this study. First, the cross-sectional data limit our ability to confirm the causal relationships. Second, the study relies on perceptual data that are subject to respondent errors and biases. Ideally, a model includes all critical variables that might predict the dependent variable. In this case, we are unable to control for department budget or IT budget due to variation in municipal budget reporting. The dependent variables may be subject to errors due to respondents’ incomplete information about the organization and technology, though we expect that most, if not all, department heads can accurately report on e-service and intranet availability in their organizations. Last, the random sample is drawn from municipalities; therefore, the findings are not generalizable to state and federal governments or agencies providing specific functions, such as housing and transportation.

This study explores the relationship between organizational factors, both structural and cultural, and the adoption of e-services and intranet in municipalities. The bureaucratic characteristics of public organizations are directly negatively related to the adoption of e-services, but not intranet. The negative relationships between intranet adoption and centralization, work routineness, and personnel constraints are indirect, likely because these characteristics discourage a risk-taking culture in the organization, that is, organizations that are more risk-taking are more likely to adopt intranet, and increased risk-taking is related to lower centralization, work routineness, and personnel constraints. Thus, organizational culture is related to the adoption of intranet, but is not a significant mediator for e-service adoption.

Jun and Weare (2011) found that external factors are more influential than internal factors in the adoption of municipal web innovations. We too find that the influence of external stakeholders plays an important role in ICT adoption. Increased influence from non-governmental stakeholders is significantly related to increased e-service adoption. This finding makes intuitive sense because e-services often benefit these non-governmental stakeholders (e.g., citizens, residents, service providers) who are more likely to use e-services. This finding likely illustrates the success of NPM reforms, which aim to orient municipalities toward customer service. Increased influence from governmental stakeholders is related to increased intranet use. This finding too makes sense, as intranet development and use is more likely to benefit other governmental actors and organizations that can share communications, data, and collaborative work products. These findings demonstrate the nuanced ways in which different organizational factors may be related to the adoption of technologies that serve multidimensional purposes and indicate the important ways in which internal organizational structure and culture and external factors are related to the adoption of particular ICTs.

Bureaucracy, Risk-Taking, and E-Government

Bureaucratic rigidity was originally expected to enhance operational efficiency. As Weber (1922/1946) argued, bureaucracy is technically superior to alternative forms of organization for it raises precision, speed, and clarity of tasks to the optimum point, and organizations conforming to the bureaucratic structure will be more efficient and therefore more durable than others. Our research indicates that the bureaucratic structure, operationalized as organizational centralization, work routineness, and inflexible personnel rules, is related to the decreased adoption of e-government, an innovative approach taken by governments to enhance operational efficiency and effectiveness of service delivery.

The indirect relationship between organizational centralization and ICT adoption is noteworthy. The results suggest that although a centralized structure does not directly prohibit an organization from adopting ICT innovation, it can discourage a risk-taking culture, which can facilitate the adoption of intranet. However, caution must be exercised when evaluating the relationship between work routineness and organizational centralization and e-service and intranet adoption. As Welch and Pandey (2007) correctly pointed out, the rule-bound character of public organizations persists both as a pernicious constraint on organizational innovativeness and as an important means of ensuring accountability and responsiveness. Work routineness and organizational centralization are negatively related to e-government adoption mainly through a suppression of risk-taking culture. One of the major criticisms of reinventing government is that the entrepreneurial values may inevitably damage important democratic values that are ensured by legal and structural controls on managerial activities (Goodsell, 1993; Moe, 1994; Terry, 1993). Therefore, to be risk averse, one may argue, is the price that public organizations pay to safeguard the accountability for citizens (Bozeman & Kingsley, 1998). That said, democratic influence measured as the influence of external stakeholders remains a significant, direct predictor of innovation adoption.

Intranet’s Susceptibility to Governmental Stakeholder Influence and Risk-Taking

Our results indicate that, compared with e-services, the adoption of intranet in municipalities is strongly related to influence from governmental stakeholders. Phelps and Mok’s (1999) distinction between the technical risk and business risk of intranet implementation is helpful in understanding our finding. Whereas technical risk is rooted in complexity and uncertainty surrounding the technology itself, organizational risk is grounded in the mechanism by which the system achieves business needs (Phelps & Mok, 1999). Borrowing from existing widespread technology, an intranet may not have a high level of technical risk; rather, the main risk lies in organizational aspects, such as a lack of top management support, low user experience and support, changes to business processes, quality of supplier support (Barki, Rivard, & Talbot, 1993), and clarity regarding the intended use of the system (Moynihan, 1996).

Encompassing various functions such as personnel management, record keeping, reporting, and procurement, intranet adoption requires an organizational fit between management and technology infrastructure. Public organizations may face more risks if such fit is not fully achieved. Furthermore, achieving managerial and technological fit might bring uncertainty for management because it requires operational process restructuring, reengineering, and task consolidation. E-services, while facilitating service delivery to citizens, may not require organization-wide support and use, and therefore can be less risky compared with intranet adoption.

Whereas non-governmental stakeholder influence is significantly related to the adoption of e-services, only governmental stakeholder influence is significantly related to intranet adoption. This finding suggests that the adoption of e-government technology in municipalities is related to user influence. E-service technology, as part of the government’s effort for responding to the citizens’ needs for a more efficient and accessible service delivery, is related to the influence imposed by non-governmental stakeholders, including citizens and business groups. In contrast, intranet adoption, technology intended to streamline the internal operation, is significantly related to the influence governmental stakeholders, the users of the technology.

In conclusion, this study highlights the importance of understanding the heterogeneity of organizational innovation. This research points to the importance of better understanding the adoption of different types of ICTs. Our findings from the exploration of the effects of risk-taking culture on innovation are also intriguing. The findings show that risk-taking culture is significantly related to the adoption of intranet use, and that risk-taking is partially explained by other organizational factors (e.g., personnel constraints, centralization, and work routineness). Although the bureaucratic structure appears to suppress risk-taking, one should exercise caution when concluding that such structure is therefore undesirable solely based on the positive relationship between risk-taking and innovation. Risk-taking can be a double-edged sword, promoting innovation adoption, on one hand, and potentially undermining accountability for citizens, on the other. Scholars and practitioners are encouraged to further examine how organizational climates can encourage innovation and entrepreneurial values while ensuring public managers’ prudence and accountability for stakeholders.

Footnotes

Appendix

Summary Statistics of Individual Survey Items

	n	M	SD	Minimum	Maximum
Organizational centralization
There can be little action taken here until a supervisor approves a decision	703	2.50	0.91	1	5
A person who wants to make his own decisions would be quickly discouraged in this agency	702	2.39	0.84	1	5
Even small matters have to be referred to someone higher up for a final answer	702	2.23	0.86	1	5
Work routineness
People here do the same job in the same way every day	704	2.86	0.98	1	5
One thing people like around here is the variety of work (reverse)	704	3.74	0.77	1	5
Most jobs have something new happening every day (reverse)	703	3.49	0.87	1	5
Personnel constraint
The formal pay structures and rules make it hard to reward a good employee with higher pay here	705	3.95	1.03	1	5
Even if a manager is a poor performer, formal rules make it hard to remove him or her from the organization	704	3.66	1.14	1	5
Because of the rules here, promotions are based mainly on performance (reverse)	703	3.08	1.07	1	5
Governmental stakeholder influence
Mayor	714	3.73	1.13	1	5
Mayor’s council	708	3.69	1.09	1	5
Other city department	713	3.08	0.93	1	5
Governor	713	2.13	1.03	1	5
State legislature	714	2.49	1.09	1	5
State courts	714	2.51	1.20	1	5
Federal government	711	2.46	1.07	1	5
Non-governmental stakeholder influence
Business groups	713	2.44	0.89	1	5
Advocacy groups	711	2.48	0.86	1	5
Public opinion	713	3.19	0.92	1	5
Media	713	2.43	0.98	1	5
Risk-taking
Most employees in this organization are not afraid to take risks	712	3.10	0.95	1	5
This organization is a very dynamic and entrepreneurial place	709	2.89	0.98	1	5

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biographies

Shu Wang is a PhD candidate at University of Illinois at Chicago, specializing in public management and state and local finance. Her research focuses on local government innovation, and how policies realize public values such as efficiency, accountability, and social equity, and how public administration can contribute to the achievement of these goals.

Mary K. Feeney is associate professor and lincoln professor of Ethics in Public Affairs at ASU, where she also serves as the associate director of the Center for Science, Technology, and Environmental Policy Studies. Her newest book is an undergraduate text, Nonprofit Organizations & Civil Society in the United States (Routledge).

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