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Research Article

The Linkage between ERP Systems and Organizational Integration Methods

Kang, Sora · Park, Jonghun · Yang, Huidong

Published: January 2003 · Vol. 32 No. 4 · pp. 1157-1186
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Abstract

This paper investigated under what conditions firms that adopted ERP systems can obtain the benefits of ERP, and through what mechanisms the effects of ERP can be created. Based on an empirical analysis of Korean firms that adopted ERP during the period from 1998 to 2000, the results showed that in order for firms to achieve improved management performance from ERP investment, an appropriate alignment between ERP and organizational integration methods is necessary, and the degree of such alignment is determined by the clarity of ERP adoption objectives. Furthermore, the appropriate alignment between ERP and organizational integration methods was found to contribute to the efficiency dimension of the firm but not significantly to the profitability dimension. These results suggest that if organizational integration methods are appropriately changed in the direction required by ERP, resulting in good alignment between ERP and organizational integration methods, the effects of ERP can be positive; however, if such alignment is not achieved, the effects of ERP may not materialize.
Keywords: Clarity of objective in ERP investmentERP systemOrganizational integrating modes