The Effect of Dynamic Capability to Technology Adoption and its Determinant Factors for Improving Firm's Performance; Toward a Conceptual Model

Abstract

Based on TOE framework this paper analyze the influence of the Dynamic capabilities (DCs) associated with technology adoption for improving firm's performance. This study proposed technology adoption as a functional competence/ capability which mediate relationship between DC with firm's performance. It is focusing on the determinant factors of technology adoption at firm level and showing a conceptual model of the indirect effects of DCs at firm level, which can be key predictors of firm performance in dynamic environment. The four determinant factors has been identified are externalities, entrepreneurial leadership, slack resources, and absorptive capability. The results of this research is mostly relevant to top corporate executives (BOD) or top management team (TMT) who seek to provide some supporting “hardware” content, and to improve firm's “software” ability, in order to achieve a successful technology adoption in their organization. A further research for showing its empirical results is highly recommended.