Effects of ERP Systems in China: Cultural Influences in the Manufacturing Industry

Publisher:
The International Institute for Applied Knowledge Management
Publication Type:
Journal Article
Citation:
Journal of Information, Information Technology, and Organizations, 2013, 8 (1), pp. 40 - 66
Issue Date:
2013-01
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To gain a competitive advantage in the global market, many Chinese manufacturing firms have invested heavily in implementing Enterprise Resource Planning (ERP) systems. Evidence shows, however, that ERP system use has varied significantly between firms. This study addresses such variances in performance in the Chinese manufacturing context, particularly at a plant level. The Gattiker and Goodhue model was adapted for our investigation incorporating a survey instrument. Data were collected from 59 Chinese manufacturing firms. The data collected were analysed using Structural Equation Modeling in association with the Partial Least Squares technique. The results show that the level of interdependence, differentiation between plants, time elapsed after ERP system implementation, high context communication in the Chinese culture, and personal relationships (guanxi) have significant impacts the performance of on firms that use ERP systems. The results also indicate that a better fit between ERP systems and Chinese culture will lead to a higher performance. Particularly, personal relationships (guanxi) have a positive influence on the use of ERP systems, while high context communication has a negative influence. The findings have significant implications for IS researchers and practitioners in the Chinese social context.
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