Group cohesion in organizational innovation: An empirical examination of ERP implementation

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Abstract

Enterprise Resource Planning systems present unique difficulties in implementation in that they typically involve changes to the entire organization and are a novel application for the organization. These characteristics add to the importance of making groups more cohesive in their goals, commitment, and ability to work toward completion of the new system project. Such cohesiveness is built partly through the willingness of the team members to participate and commitment to learning the new system. To determine if these relationships hold, a survey of users and managers in Taiwan was conducted to test a model derived from social capital theory. The data support the positive relationships between group cohesion and both willingness to participate and commitment to learning. Group cohesion is likewise positively related to meeting management goals. Resources within an organization should support the climate of learning and the building of team participation.

Introduction

Enterprise Resource Planning (ERP) system implementations are typically managed via the project team structure, just as more narrow systems implementations are handled. These project teams are dedicated to apply broad knowledge to the implementation by forming a temporary, task-focused group of interested and knowledgeable people. The information system (IS) group comprising the project team often consists of business users and IS professionals with different backgrounds and interests to ensure team diversity and representation [72], [80]. The effective functioning of the project team has long been associated with eventual success of the project [44], [68]. Characteristics of the organization and the individuals in the team have been the subject of many studies to determine essential characteristics of effective teams [21], [81], [86].

Much of the work on team effectiveness in the IS literature focuses on the participation of individuals comprising the group and the contingency factors that drive the participation–performance relationship. It has long been assumed that user participation in the development process is critical, but a clear demonstration of the positive relationship between user participation and IS success has been elusive [6]. Many studies reported mixed results or no significant relationship [47]. To determine reasons for a lack in conclusive results, other studies have examined contingency factors (i.e. system complexity and task complexity) to determine the situations where participation may be more critical or in the correct composition of the groups [15], [47], [71].

Perhaps of more importance to the success of a group, however, is how the group functions as a cohesive unit [14]. This point is of increasing interest in the study of groups in other disciplines, where cohesion is the tendency of a group to stick together and remain united in the pursuit of its goals and objectives [11], [13], [43], [44]. One important conclusion emanating from these studies was that the overall cohesion–performance relationship is positive [57]. In addition, organizational theorists have emphasized the importance of considering the impact of contextual factors (e.g. different types of system implementation) on participation outcomes and the influences by distinguishing between individual participation and group participation [48], [54]. Project management research has suggested the importance of building team relationships that focuses on the collective group setting as opposed to individual contributions [46], [81].

Unlike individualistic user participation, the effects of group-level cohesion receive minimal attention in the IS literature. The objective of this study is, therefore, to explore the impact of group cohesion on organizational IS innovation implementation, and in particular, on the implementation of ERP in an organization. ERPs provide the ideal setting as they are typically a novel application for the organization and require a broad base of knowledge in terms of systems and organizational functions [61]. The complexities associated with an organization-wide system strongly suggest consideration separately from traditional systems [32], [33]. Furthermore, based upon the literature and ERP implantation context, willingness to participate and organizational commitment to learning are identified as antecedents for group cohesion in ERP implementation, providing a means to examine characteristics of building desired cohesion [45].

The contributions of the study include a model of ERP success based on social capital theory that serves to explain the importance of the group, rather than the individual for the successful implementation of enterprise systems. A survey of management and users in Taiwan organizations confirms the model, leading to the more practical considerations of determining how to build an environment that fosters group performance. In particular, willingness to participate and organizational commitment to learning are significantly associated with group cohesion and eventually with successful ERP implementation.

Section snippets

Theoretical background and hypotheses

The literature on information systems points out the significance of participation for the success of systems development and implementation [2], [35], [68]. Previous research recommends that the analysis, design and implementation of IS are often tasks-interdependent requiring user participation, vendor/consultant participation, and developer participation [40], [66], [69], [71]. The levels of stakeholder involvement are associated positively with system acceptance and development performance.

Sample and data collection

The target of this study is manufacturing companies that have implemented an ERP system. A cross-sectional field survey was conducted to collect data from senior managers from 1000 companies across Taiwan. Our study focused on medium to large manufacturing companies to target companies most likely to adopt ERP systems. One thousand largest manufacturing companies in Taiwan listed in the 2002 edition of Common Wealth served as the sample frame.

Data were collected from two types of informants in

Data analysis and findings

Partial Least Squares (PLS), a structural equation modeling (SEM) technique, was used for testing the research model. PLS is a regression-based technique that originates from path analysis [89]; however, it has emerged as a powerful approach to study causal models involving multiple constructs with multiple indicators. This approach facilitates testing of the measurement model and the structural model simultaneously. The PLS approach is superior to other SEM approaches for this study because of

Conclusions and implications

The goal of this research was to investigate the ways by which participation benefits could be maximized and the implementation success of organizational innovation, in the domain of ERP, could be enhanced. In particular, the role of group cohesion as well as its sources toward achieving these goals is examined. The results of a survey found that the group cohesion of an ERP project team is important to the attainment of organizational benefits of the project. Cohesive groups are able to better

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      In this study, the definition of cohesion refers to the ERP implementation team׳s interpersonal attraction, including its respect for the views of its members, group consciousness, and goal similarity (Carron et al., 1995; Huntona et al., 2001; Beal et al., 2003; Wang et al., 2006; Castano et al., 2013; Wood et al., 2013). Successful ERP implementation performance depends on the application of organizational change and innovation to the unique difficulties in implementation that usually need to be addressed by the enterprise׳s cross-sectoral composition of the team (Wang et al., 2006). However, in regard to the key factors that are related to the failure of ERP implementation performance, certain empirical studies displayed above 31% of the accumulated variation volume due to organizational factors and project management factors (Amid et al., 2012), especially factors related to human resources management and management communication (Boltena and Gomez, 2012).

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