Strategic Advantages of ERP in Pakistan

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Impact of Organizational Culture on the achievement of Strategic Advantages of ERP in Pakistan

ABSTRACT

This study looks at the relationship that organizational culture has with the achievement of Strategic advantages from implementing Enterprise Resource Planning (ERP) software. A sample of 30 organizations that implemented ERP was used to test the hypotheses. A competing values approach to measuring organizational culture was used to quantitatively measure an organizations culture profile. The results show that the organization’s culture is significantly related to the achievement of strategic advantages from implementing ERP

1. Introduction

This paper studies the relationship between Enterprise Resource Planning (ERP) and organizational Culture. ERP is buzz word now days with every company implementing from different models coined by different vendors in order to stay in the competition and to ensure that its operations are efficient and effective. Through ERP the organizations are able to achieve low costs of procurement, production, inventory & distribution etc hence streamlines whole value chain that includes various primary & secondary activities. These are pivotal in making any organization successful and taking it ahead of competition. Furthermore higher turnovers, reduced cycle times, inventory levels and financial operations can be given a face-lift to meet the challenges of the modern global recession the world is observing. ERP refer to the integrated way of carrying out all or major / core operations of the company. Organizations now regard ERP as a vital tool for the enhancement of their business operations by implementing most of its functions if not all of their processes under a single information system in an endeavor to benefit from the strategic advantages that ERP offers.

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Organizational culture is a vital notion in organizational analysis. In past few years, there has been a lot of focus on the development of organizational cultures that are conducive of achieving better results and higher performance & motivational levels of the employees. Organizational culture can be described as an "abstract composite of assumptions, values, and artifacts shared by its members [that] can be reliably represented by the values…which drive its members’ attitudes and activities" (Howard, 1998, p. 234). The model proposed in this study advocates that there is an essential connection between an organization’s culture and the achievement of strategic advantages from ERP. A Competing Values approach to measuring organizational culture is used to provide an empirical measure for an organization’s culture (Quin and Spreitzer, 1991). The competing values approach provides a profile of four cultural archetypes occupied by a particular organization. These archetypes are group, hierarchical, developmental and rational cultures. The combination of the archetypes describes the organizations culture profile.
The primary question this study attempts to answer is how does Organizational cultural profiles affects the achievement of strategic advantages of ERP.

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