Information and Communication Technology diffusion, collective rationality and form selection in the Australian stockbroking industry

Stockbroking firms have adopted information and communication technology (ICT) to improve their competitiveness and responsiveness to shifts in market conditions. This paper adopts an institutional approach to the Diffusion of Innovation (DOI) to examine the diffusion of ICT and associated changes in organizational structure in the Australian Stockbroking Industry. From an institutional perspective, changes experienced by a firm can be viewed as a process of individual adaptations running in parallel to the evolution of the business environment. The ability of the industry to adapt to ICT enabled change lies in the existence of resources and capabilities that managers build using organizational capabilities and the dynamics of industry structure. The logic behind this approach is founded on the notion that intensity in competition and rapid technological change has made organizational boundaries less permanent, which has resulted in firms networking and pooling their resources. To explore these networks and the concomitant institutional power relations, an adaptive framework of ICT is proposed. In this framework, to gain legitimacy, the interacting firms mimic each others practices thereby developing a standardised set of operating procedures.