Today, organizations in different sectors are adopting or are expected to adopt Internet-based virtual worlds for a variety of business purposes. As the Internet has grown to become an important part of conducting business, virtual worlds, which provide a 3-D interactive experience, can be expected to follow a similar growth trajectory. However, little academic research has been done on organizational adoption of virtual worlds. In particular, most of these studies are confined to conceptual research. In addition, to the best of my knowledge, no academic research has been focused on why organizations are willing or unwilling to adopt virtual worlds. To fill these gaps, this study investigated empirically what factors influence organizational adoption of virtual worlds.

By integrating the innovation diffusion theory, institutional theory, and the findings from prior studies on organizational adoption of the Internet into the TOE framework, this study developed a research model that posits predictors for virtual world adoption within an organizations’ contexts that influence organizational adoption: technological, organizational, and environmental. The research model was tested using survey data from 130 organizations that had not adopted virtual worlds.

Surprisingly, none of technological factors were found to play any role in organizational intent to adopt virtual worlds. In addition, among the organizational factors, only organizational readiness was found to play a role. Interestingly, this study found that environmental factors play a key function in influencing organizational intent to adopt virtual worlds. Notably, external institutional pressures were found to have strong effects on organizational intent to adopt virtual worlds.

This study provides several theoretical and practical implications. On the theoretical side, this study enhances the understanding of organizational adoption of virtual worlds by explaining empirically organizational intent to adopt virtual worlds. In addition, this study offers strong empirical evidence for the applicability of institutional theory to yield an understanding of organizational adoption of virtual worlds and other new IT. Lastly, this study provides empirical evidence that it is important to examine environmental factors in studying organizational adoption of IT innovation. On the practical side, this study suggests that managers should pay attention to the capabilities of their organizations regarding the adoption of virtual worlds before they commit to such action. In addition, managers may need to pay attention to the institutional factors in their decisions to adopt virtual worlds. This may help their organizations avoid being left out of their respective industries or foster their image and reputation within those industries.