Rational versus Institutional Perspectives in Organizational Web Sites

Despite the business importance attached to the choice of features in organizational Web sites, most research on the subject is descriptive in nature. To our knowledge, no study has attempted to understand the underlying theoretical rationale explaining firms' choice of Web site features. Adoption of innovative systems by organizations is not always a "rational decision" based on the market innovation perspective; it may be based on the organizations' decision to conform to the "institutionalized norms" within or across the industries. In a similar vein, the underlying rationale for the firms' choice of Web site features may be either predominantly "rational" or "institutional." We use Web content analysis to examine the dominant theoretical perspective guiding the organizational Web sites: rational (differentiation) or institutional (alikeness). For this, we analyze the data recorded from 243 Web sites: 91 information technology firms (IT industry), 67 business schools (education industry) and 85 banks (banking industry). Data pertaining to 20 features of Web sites are classified into information and interactive contents within and across three industries. Results suggest that Web site features are primarily explained by intra-industry norms of alikeness rather than inter-industry similarities, thereby supporting the preponderance of "institutional perspective" for Web site features within each of the three industries examined. In contrast, differences in Web site features across the three industries can be explained using the "rational perspective." Thus, both rational and institutional perspectives serve as useful theoretical lenses for understanding choice of organizational Web site features. The study also delineates a set of implications for research and practice.