The consequence of differences: How heterogeneity in practice adaptations affects the diffusion process

This study extends diffusion studies by developing the concept of heterogeneity in practice adaptations, defined as the differences in how adopters adapt to a new practice post adoption. I first propose that the combination of organizational learning and legitimacy construction leads to the curvilinear effects of heterogeneity in practice adaptations on the subsequent adoptions. Second, I argue that its effect varies depending on the stage of the diffusion process. I test this argument using the context of the diffusion of an informal corporate governance practice—the executive officer system—in Japan from 1997 to 2013. The findings demonstrate that the effect of heterogeneous adaptations is curvilinear with an inverted U-shape, and that its effect in the early stage differs from that in the late stage.