This social psychological theory describes the patterns of adoption, explains the mechanisms by which they occur, and assists in predicting whether a new invention will be successful. In its early stages, DOI theory was limited to experts in one specific field, examining and evaluating the diffusion of a process which was relevant to their specialization. For example, medical sociologists would look at new technologies occurring in health care and record the general rates of adoption, at the same time education researchers would study the spread of new teaching methodologies and its inevitable diffusion throughout the school system (Roger Clarke 1999).

The early ideas about the diffusion of innovation can be traced back to the beginning of the century in German – Austrian and British

Second stage forming an attitude toward the innovation - persuasion occurs when an individual forms a favorable or unfavorable attitude toward the innovation.

First lets begin with an innovation. Rogers defines innovation as an idea, practice, or object that is perceived as new by an individual or other unit of adoption. It matters little, so far as human behavior is concerned, whether or not an idea is "objectively" new as measured by the lapse of time since its first use or discovery. The perceived newness of the idea for the individual determines his or her reaction to it. If the idea seems new to the individual, it is an innovation (Everett Rogers 1995). This definition broadly takes on innovation to include not only products such as technological innovations but also ideas and processes that stimulate the development of human potential and organizational processes. For instance 3M had institutionalized a corporate culture that promoted intrapreneurship. Early in 3M’s history, chair and CEO William L. McKnight, long considered to be the company’s “spiritual founder,” introduced policies and philosophies that were considered to be responsible for 3M’s ability to innovate consistently. Current management has continued to embrace and expand these polices and philosophies, believing innovation to be the cornerstone of 3M’s future success.

Rogers' definition contains four elements that are present in the diffusion of innovation process. These four main elements are:

Drawing from Lawrence's (1989) four-ring model on organization change, the two inner rings encircle different internal stimuli that may be sources for innovations. The first inner ring encapsulated valueadding behavior and the second ring encompassed the 7-S framework - strategy, structure, systems, superordinate goals, staffing, skills, and style. External stimuli for innovation may come from the two outer rings of Lawrence's (1989) model which encompassed customers, suppliers, shareholders, and community in the third ring, and social change, technological change, economic change, and political change in the fourth ring.

Third stage decision to adopt or reject - decision occurs when an individual engages in activities that lead to a choice to adopt or reject the innovation. A study was conducted at University of Nevada to determine how small retailers are adopting IT for their entrepreneurial venture. Three antecedents were posited to influence the information technology adoption in small business environments: (1) the owners perception of the relative advantage of using information technology, (2) social expectations of information technology use, and (3) the owners innovativeness in managing their own business. Seventy-one small business owners participated in the study. The research results suggested that among these three key drivers of adoption, the firm's innovativeness is the strongest determinant for adopting traditional information systems. However, in adopting Internet related technologies, the owners’ positive perception of the relative advantage of using information technology played the most critical role. Social expectation did not seem to directly influence the adoption level in either case, but exhibited indirect influence on perceived relative advantage and in turn on the level of Internet adoption (Jungwoo Lee 2001).

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