Study on E-Commerce Adoption in SMEs Under the Institutional Perspective: The Case of Saudi Arabia

The Theoretical Background

The conceptual research framework was developed based on the institutional theory (Figure 1). The institutional theory provides a rich, complex view of organizations; organizations are open systems and the institutional context is a major source of influence on organizational behavior. Accordingly, in order to understand individual and organizational behavior, it must be located in a social and institutional context, and this context both regularizes behaviors and provides opportunity for agency and change. Institutional theory posits that pressures from industrial, political, legal and cultural systems, and expectations from society define what is socially acceptable and expected organizational behavior, which pressures organizations to look and act the same. In viewing institutions more widely as varied social constructs, including cultural beliefs, new institutionalism has moved away from its formal legal historical roots and become a more explanatory discipline in economics and social sciences. Contemporary institutional theory focuses on developing a sociological view of institutions -the way they interact and the way they affect society (Scott, 2005).