Understanding AI adoption at organizations: literature review of TOE framework

Purpose- In the contemporary business landscape, we are witnessing the rapid development of Artificial Intelligence (AI), which is fundamentally reshaping organizational practices. These developments mark what can be described as the "Era of AI", a significant milestone in technological history. While AI offers benefits, it also presents critical challenges, particularly concerning its adoption and the adaptation processes within organizations. Despite the swift evolution of AI technologies, research on their practical applications in organizational settings remains scarce and underdeveloped. This gap highlights a promising area for further exploration. In alignment with the literature, it can be argued that organizations with higher AI adoption rates tend to achieve better innovation outcomes, which suggests a need to revisit and potentially expand the Technology-Organization-Environment (TOE) paradigm. Originally developed to explain technological adoption/embracement, the TOE framework may not capture the complexities introduced by AI. This study aims to explore whether an expanded TOE paradigm is necessary to better address the contemporary dynamics of AI adoption. Methodology- This research investigates the historical development and consolidation of AI within organizations, using the TOE paradigm as a foundational theoretical look. The study examines whether the existing TOE model sufficiently explains AI adoption or whether it requires augmentation to remain relevant in the age of generative AI. Findings- Literature review findings indicate that the traditional TOE framework exhibits limitations when applied to AI adoption. To address these gaps, another study was found in the literature that proposes the inclusion of a human factor—transforming the TOE into a TOEH (Technology-Organization-Environment-Human) model. In our research we would like to integrate critical thinking (CT) skills under Human Factor, as organizations increasingly seek employees who can critically assess and effectively utilize outputs from generative AI (GenAI) tools. The ability to make intelligent and ethical decisions in the context of AI is now a vital competency. Conclusion- The proposed TOEH framework offers a more well-rounded approach to discovering AI adoption within organizations. By incorporating the human element, particularly critical thinking skills, organizations can better prepare to embrace AI in an ethical, effective, and innovative manner.