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Cultural dimensions affecting user satisfaction of ERP systems for a developing country.
Abstract:
The literature review was based on a multi-disciplinary research approach by incorporating user satisfaction and cultural dimensions of ERP systems for an emerging country such as Thailand. Previous studies suggested that national cultures are substantially influenced by ERP system satisfaction. Thai people tend to have high power distance and high uncertainty avoidance, but they are likely to have low individualism and low masculinity. Then, all fours cultural dimensions should affect user satisfaction of ERP system.

Keywords: Cultural Dimensions, ERP and Cultures, Hofstede Theory, Developing Country, Thailand

Article Type:
Report
Subject:
Business management software
Developing countries
Enterprise resource planning
Authors:
Kanthawongs, Penjira
Kanthawongs, Penjuree
Pub Date:
07/01/2011
Publication:
Name: Review of Business Research Publisher: International Academy of Business and Economics Audience: Academic Format: Magazine/Journal Subject: Business, international Copyright: COPYRIGHT 2011 International Academy of Business and Economics ISSN: 1546-2609
Issue:
Date: July, 2011 Source Volume: 11 Source Issue: 4
Topic:
Computer Subject: Business management software; Enterprise resource planning
Product:
SIC Code: 7372 Prepackaged software
Geographic:
Geographic Scope: Thailand; China Geographic Code: 9THAI Thailand; 9CHIN China; 0DEVE Developing Countries
Accession Number:
272616378
Full Text:
1. INTRODUCTION

Due to intensive market competition and the advancement of Information Technology (IT), Enterprise Resource Planning (ERP) has been implemented by organizations in developed countries such as the United States and Western Europe (Chung et al., 2008; Ifinedo, 2009) since late 1990. Today, many organizations in emerging countries such as China, Thailand, Egypt, and Jordan have accelerated the implementation of ERP systems (Kanthawongs & Kini, 2003; Ngai et al., 2008; Sawah et al., 2008; WorldBankReport, 2010). ERP is a complex software or concept based on business processes integrating to automate the flows among different functions such as finance, accounting, and materials management within an organization using a shared database (Wei, 2008). Then, the economic growth of emerging countries in Asia, Latin America, and Eastern Europe has made these regions become attractive targets of ERP software vendors (Sawah et al., 2008; BusinessNewsAmericasReport, 2010; ReportLinkerReport, 2010). Nevertheless, the implementation of ERP systems in developed and emerging countries are unlikely to follow the same implemented pattern since infrastructure, research and development capacity, labor cost, skill base, and government of the two groups are significantly different. For example, the internet infrastructure of Thailand (as an emerging country) is far different from that of the USA (which is a developed country) because 24.4% of Thai population in 2008 is Internet users (NectecReport, 2010), while 74.1% of the US population is Internet users (InternetWorldStatsReport, 2010a, 2010b). However, the industrial production growth rate of Thailand is much higher than that of the USA. The industrial production growth rate of Thailand is 5.4%, while that of the USA is 0.5% (InternetWorldStatsReport, 2010b). Then, this paper is proposed a conceptual model of different cultural dimensions influencing user satisfaction for ERP users in Thailand.

2. CONCEPTUAL FRAMEWORK DEVELOPMENT

Many researchers have pointed out that the popular ERP packages developed by Western countries, though based on good business models, may not fit the requirements of other organizations. For example, Soh et al. (2000) emphasized that the "misfit" examples should be recognized in the unique Asian context when adopting ERP systems, especially when the business models originated from Western practices (Soh et al., 2000). Specifically, they suggested that the specific data, functional, and output issues were the basic categorization of misfits in the Asian context. In cultural context incorporating organizational practices different than those faced in North America or Western Europe, there could be substantial barriers associated with the reengineering of local practices and processes, as was the case with the Chinese communities of Southeast Asia (Davison, 2002b). Sheu et al. (2004) recommended that national differences such as national cultures, languages, management styles, politics, regulations, customs, etc. could affect the way of doing businesses in each country. The ERP implementation in China has not fully perceived as positively by Chinese managers and end-users as it is by their business counterparts in the USA (Ngai et al., 2008). Unique Asian context concerning cultures may not fit the existing business process models of the Western practices (Al-Mashari, et al., 2003; Zhang, et al., 2005). Based on Hofstede's (2001) definition of well-known national cultural dimension (power distance, collectivism vs. individualism, femininity vs. masculinity and uncertainty avoidance), one can apply to make comparisons in Table 1.

Employees are trusted to use information responsibly in the "open" system. Therefore, ERP is designed to be transparent systems, with all authorized users to access most, if not all, parts of a system. Nevertheless, in some cultures, a much stricter control of access to information is inevitable, often on a need-to-know basis (Martinsons, 1991). The reengineering of organization processes and the subsequent implementation of ERP software relates to changes in job descriptions and required skills. Accounting clerks in emerging country like China often are trained with skills for task workers instead of knowledge workers (Davison, 2002a). Then, employees of emerging countries should be empowered with the responsibility to make decisions in using the systems. It is important that "they understand the system thoroughly, since any mistakes made would be perpetuated downstream with consequent chaos for processes (and people) elsewhere" in using the system (Davison, 2002a). This is not an easy task for employees in emerging countries such as China, Thailand, or Brazil to understand, accept, and take responsibilities for such empowerment. When "culture plays a substantial mediation role, people in a low power distance culture (Hofstede, 2001), for instance, those typical of the Anglo-American societies, are likely to more willing to take on new responsibilities, to accept authority and decision-making powers (Davison, 2002a). Responsibility and accountability are related to status, which cannot simply be given to a person, particularly in a hierarchically structured context. The broadly held belief in Chinese society was that all men were born unequal clearly on the contrary to beliefs of those found in U.S. and could not simply be ignored (Bond, 1986; Davison, 2002a). Results from Van Everdingen and Warrts (2003) showed that countries with relatively high scores on individualism index and low scores on power distance index tend to have relatively higher ERP adoption rate (VanEverdingen & Waarts, 2003). Chansa-ngavej et al. (2004) pointed out that the Thai had high scores in masculinity instead of femininity. Moreover, they also found that Thai firms tended to be slow in ERP adoption observing by the findings that the participating companies had low individualism, but high scores in power distance, uncertainty avoidance, and masculinity (Chansa-Ngavej et al., 2004).

In an emerging country, Chinese people were more tolerant to unclear information, trusting more on personal experience, maintaining more information among themselves than their Western counterparts. However, the ERP system deployment requires clear and precise data and information and emphasizes on business processes and linked-unit cooperation. This might not be compatible with Chinese organizational culture. Then, it might be necessary for Chinese enterprises to take their organizational culture into account and attempt to change their culture to the modern requirements in terms of the three dimensions particularly parochial vs. professional, open vs. closed system, and loose vs. tight control (Zhang et al., 2005). If managers in China could enthusiastically communicate with their subordinates the benefits and capabilities in implementing ERP systems (high collectivism), the organizations should successfully adopt the systems (Bendoly et al., 2006). Egyptian culture hindered the ERP implementation success such as "centralized decision making, hierarchical structure, loose lateral links, and ill-defined documentation cycle" (Sawah et al., 2008). Moreover, Jordanian employees were threatened because they had a lot of uncertainty and anxiety (high uncertainty avoidance) toward the ERP projects. They resisted the project since they viewed that the projects would change their jobs. Also, Jordanians also accepted high power distance since the ERP project mangers stated that managers were unhappy with the idea of sharing information among the subordinates, the managers requested for restricted access to information for themselves (Hawari & Heeks, 2010). Therefore, the beliefs and attitudes of individualism, collectivism, power distance, masculinity, femininity, and uncertainty avoidance may be related to the implementation of ERP systems.

While the Western countries seem to have somewhat high uncertainty avoidance of 55, Thai people tend to have extremely high uncertainty avoidance of 64. While the Western countries seem to have quite low power distance of 38, Thai people tend to have high power distance of 64. "Individualism refers to caring of oneself and one's immediate family" (Rajapakse & Seddon, 2005). In contrast, Collectivism defines caring for both oneself and other groups (Rajapakse & Seddon, 2005). The Western countries have extremely high individualism of 79, but the Thai are quite low individualism of 25. Masculinity and femininity refer to the duality of genders is a fundamental fact with which different societies cope in different situations (Rajapakse & Seddon, 2005). Western countries are somewhat low masculinity of 47; however, the Thai are quite low masculinity of 34. Then, all four cultural dimensions are likely to affect user satisfaction of ERP system implementation.

User satisfaction with technology has been widely used indicators of success of information systems research (Al-Mashari et al., 2003; Delone & Mclean, 2003; Petter et al., 2008; Sawah et al., 2008). If persons have positive attitudes about a technological application, they are likely to behave in ways that enable them to get benefit from it. Recognizing the importance of people in ERP implementation, human measure is user satisfaction (Saatcioglu, 2009). Satisfaction with technology is viewed by the respondents' belief that the ERP system is able to provide integrated, accurate, timely, and reliable information to the respondents and whether they believe that the new system is better than the one it is replacing (Lin & Rohm, 2004). User Satisfaction is also concerned with the interaction between the information produced by the system and the recipients (Hawari & Heeks, 2010). Therefore, the purpose of this article is to propose a conceptual framework of cultural factors relating to user satisfaction of ERP system implementation framework in a developing country such as Thailand. The proposed model is as follows:

[FIGURE 1 OMITTED]

3. METHODOLOGY

This exploratory and preliminary study will be conducted using interviews. The purpose is to provide deeper understanding of the problem domain. Discovering/ identifying possible factors as well as validating the proposed factors would further develop conceptual framework. In-depth interviews of at least 10 users from 10 organizations which have used ERP for their business processes. The same interviewer will conduct these interviews in order to reduce variance of the study. These interviews are largely guided by the interview protocol derived from the study's theoretical constructs.

4. CONCLUSIONS, RECOMMENDATIONS, AND FUTURE WORK

User satisfaction of ERP system implementation tends to vary from country to country depending on a variety of factors, starting from external-level or internal-level ones. It is of interest for researcher in human behavior and computer to explore the factors underlying this phenomenon. Moreover, many studies provided evidence that national cultural issues are significantly related to ERP system satisfaction. Based on Hofstede's theory (2001), Western countries tend to have quite low power distance, a little high uncertainty avoidance, extremely high individualism, and somewhat low masculinity. However, on average, emerging countries tend to have extremely high power distance, somewhat low uncertainty avoidance, extremely low individualism, and somewhat high masculinity. For Thai, they tend to have high power distance and uncertainty avoidance, extremely low individualism, and quite low masculinity. Then, all four cultural dimensions are likely to affect user satisfaction of ERP system implementation. Nevertheless, empowered employees may be developed through requisite skills and more knowledge base for efficient and effective decision making and accountabilities. Therefore, the purpose of this article is to propose a conceptual framework of organizational factors relating to user satisfaction of ERP system implementation framework in a developing country such as Thailand. Qualitative and quantitative approaches are recommended to test the model.

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Penjira Kanthawongs, Bangkok University, Bangkok, Thailand

Penjuree Kanthawongs, Kasem Bundit University, Bangkok, Thailand

Dr. Penjira Kanthawongs received her Ph.D. in Business Administration jointly from Bangkok University (BU) and the University of Nebraska-Lincoln, USA in 2007. Penjira is currently an Assistant Dean for School of Business Administration at BU. She has published extensively in diverse areas of Information Systems including ERP in Education, ERP in industries, e-Government, and Technology Adoption. Penjuree (Penny) Kanthawongs received her Master's Degree in Business Administration from Southern Illinois University (SIU) at Carbondale, USA in 1996. Penjuree or Penny is a lecturer of the Bachelor of Business Administration (English program), Kasem Bundit University. Her published articles are involved with ERP in industries and in education. Her research interests are related to ERP, organizational behaviors, music and marketing industry.
Table 1: International comparison data on cultural dimensions
(Hofstede, 2001)

Country         Power     Uncertainty   Individualism [right arrow]
               Distance    Avoidance           Collectivism

Western
Countries

US                40          46                    91

Germany           35          65                    67

The               38          53                    80
Netherlands

Average           38          55                    79
index scores

Emerging
Countries

China             80          30                    20

Malaysia         104          36                    26

Philippines       94          44                    32

Indonesia         78          48                    14

India             77          40                    48

Thailand          64          64                    20

Pakistan          55          70                    14

Average           79          47                    25
index scores

Country        Masculinity [right arrow]
                      Femininity

Western
Countries

US                        62

Germany                   66

The                       14
Netherlands

Average                   47
index scores

Emerging
Countries

China                     66

Malaysia                  50

Philippines               64

Indonesia                 46

India                     56

Thailand                  34

Pakistan                  50

Average                   52
index scores
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