Combining an enterprise resource planning system and informality:a study of efficiency and flexibility complmentarity [sic]

DUE TO COPYRIGHT RESTRICTIONS ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY AND INFORMATION SERVICES WITH PRIOR ARRANGEMENT One of the current research trends in Enterprise Resource Planning (ERP) involves examining the critical factors for its successful implementation. However, such research is limited to system implementation, not focusing on the flexibility of ERP to respond to changes in business. Therefore, this study explores a combination system, made up of an ERP and informality, intended to provide organisations with efficient and flexible performance simultaneously. In addition, this research analyses the benefits and challenges of using the system. The research was based on socio-technical system (STS) theory which contains two dimensions: 1) a technical dimension which evaluates the performance of the system; and 2) a social dimension which examines the impact of the system on an organisation. A mixed method approach has been followed in this research. The qualitative part aims to understand the constraints of using a single ERP system, and to define a new system corresponding to these problems. To achieve this goal, four Chinese companies operating in different industries were studied, all of which faced challenges in using an ERP system due to complexity and uncertainty in their business environments. The quantitative part contains a discrete-event simulation study that is intended to examine the impact of operational performance when a company implements the hybrid system in a real-life situation. Moreover, this research conducts a further qualitative case study, the better to understand the influence of the system in an organisation. The empirical aspect of the study reveals that an ERP with pre-determined business activities cannot react promptly to unanticipated changes in a business. Incorporating informality into an ERP can react to different situations by using different procedures that are based on the practical knowledge of frontline employees. Furthermore, the simulation study shows that the combination system can achieve a balance between efficiency and flexibility. Unlike existing research, which emphasises a continuous improvement in the IT functions of an enterprise system, this research contributes to providing a definition of a new system in theory, which has mixed performance and contains both the formal practices embedded in an ERP and informal activities based on human knowledge. It supports both cost-efficiency in executing business transactions and flexibility in coping with business uncertainty.This research also indicates risks of using the system, such as using an ERP with limited functions; a high cost for performing informally; and a low system acceptance, owing to a shift in organisational culture. With respect to practical contribution, this research suggests that companies can choose the most suitable enterprise system approach in accordance with their operational strategies. The combination system can be implemented in a company that needs to operate a medium amount of volume and variety. By contrast, the traditional ERP system is better suited in a company that operates a high-level volume market, while an informal system is more suitable for a firm with a requirement for a high level of variety.

Capabilities for strategic flexibility:a cognitive content framework

Different forms of strategic flexibility allow for reactive adaptation to different changing environments and the proactive driving of change. It is therefore becoming increasingly important for decision makers to not only possess marketing capabilities, but also the capabilities for strategic flexibility in its various forms. However, our knowledge of the relationships between decision makers’ different ways of thinking and their capabilities for strategic flexibility is limited. This limitation is constraining research and understanding. In this article we develop a theoretical cognitive content framework that postulates relationships between different ways of thinking about strategy and different information-processing demands. We then outline how the contrasting beliefs of decision makers may influence their capabilities to generate different hybrid forms of strategic flexibility at the cognitive level. Theoretically, the framework is embedded in resource-based theory, personal construct theory and schema theory. The implications for research and theory are discussed.