Revisiting the Technological-Organizational-Environmental (TOE) Framework and Diffusion of Innovation (DOI): A Theoretical Review for Artificial Intelligence (AI) Adoption

Abstract

While the TOE framework emphasizes contextual domains such as technological readiness, organizational capabilities, and environmental pressures, the DOI theory focuses on innovation attributes and the diffusion process. The study advances a holistic framework that synthesizes these perspectives, linking why organizations adopt AI with how innovation diffuses across social and institutional systems. This study revisits and integrates these two foundational models to develop a cohesive theoretical lens for understanding AI adoption in underdeveloped economies. The study adopted a conceptual and theoretical review design and employed a structured literature review and thematic synthesis to identify patterns, overlaps, and gaps in TOE-DOI-based research. The study revealed that integrating DOI’s innovation characteristics with TOE’s contextual determinants enhances the explanatory power for AI adoption, particularly in a limited resources context. The integrated multi-theoretical lens addresses the constraints of each theory, embedding behavioural, structural, and institutional dimensions often overlooked in fragmented model studies. The study contributes to the theoretical discourse by proposing a multi-level context framework for AI adoption. Practically, it provides policymakers and managers with guidance aligning innovation perception with organizational readiness and external pressures.