The interplay between structural rigidity and uptake of innovation-a critical examination of infusion of innovation in the stockbroking sector

In the studies concerned with the uptake of innovation, the process of diffusion and subsequent uptake of technological innovations is seen as a direct outcome of communication between users of an innovation and the potential adopters. Rogers (1995) explains that innovation spreads across a population of organisations beginning with the initial awareness of the innovation, and progressing to its formal adoption and full scale development. Diffusion of innovation theory (DOI) was employed to explore the adoption of information systems (IS) technologies in the listing, sales and clearance processes in the Australian stockbroking sector. The research revealed that in rule-bound industries such as the stockbroking sector, the adoption of IS technologies occur in the context of two dimensions: (1) a wave of standardisation perpetuated by the sector’s governing bodies followed with (2) individual firms’ strategic differentiation. The differentiation phase initiates after strict adherence to the overall rules and regulations devised by the sector’s governing bodies. In addition, the demands of the customer groups influence the direction of change in the composition of the sector

Infusion of information systems in the stockbroking sector

The Australian stockbroking sector has been at the forefront of integrating information systems (IS) in its daily operations. Trade and clearance account for a large percentage of processes undertaken in a brokerage house. Upon integration of IS, the trade and clearance processes of the sector were centralised and the institutional arrangements of the sector were transformed. Centralisation also meant that this large percentage of processes was directly controlled by the Australian Stock Exchange (ASX) and the Australian Securities and Investment Commission (ASIC). Although the integration of IS was intended to rationalise the trading regime and make the process of brokerage identical across the industry, there are many types of brokerage houses - each catering to a specific group of customers. This interplay between the intent to homogenise the sector by the regulatory authority and the move by the brokerage houses to strategically differentiate from peers motivated this research to explore the dynamics of the diffusion of IS adoption and its resultant structural changes in the stockbrokerage sector