Real options from RFID adoption: The role of institutions and managerial mindfulness

Abstract

Widely hailed as the next generation auto-identification technology, RFID has captured the imaginations of organizations across different industry sectors. Accordingly, organizational managers are faced with the important but difficult task of evaluating RFID in the context of their organization and deciding upon its adoption. This research uses the real options perspective to understand how managers' recognition of the real options from the adoption of RFID affects their adoption decision-making. Conceptualizing the recognition of real options as a sense-making exercise by managers, we investigate the roles played by the institution in which the organization operates, and managers' own mindfulness in recognizing these options. Using responses collected from 110 managers responsible for RFID adoption in their organizations, we demonstrate that managers recognize and value the presence of real options, and it affects their intention to adopt RFID. Both institutional factors and managerial mindfulness are found important in recognizing the real options.