The impact of ERP deployment upon organizational structure: a mixed method study of Chinese practices

Information technology (IT) plays an important role in the daily operation of the modem business organization. The implications for, and influences on organizational structure from the deployment of IT have long been recognized. One of the most important, recent innovations, in the world of information technology, has been the Enterprise Resource Planning (ERP) system. Because of its wide reach, sophistication and highly integrated nature, it is potentially far more powerful and advanced than any of its predecessors, and thus has the potential to greatly influence organizational practices and design. However, the understanding of the organizational impact of IT in general, and ERP in particular, is rather limited. Due to the shortcomings of past studies, no clear consensus has been reached with respects to the structural impact of IT Moreover, though there 4ave been a large number of studies focusing on the implementation of EPR, very few empirical works have explicitly and systematically explored the influence of ERP on a range of different structural dimensions. This study aims to fill these gaps in the literature, and in so doing, generate a more comprehensive understanding of the organizational impacts of ERP To this end, it adopted a mixed method in order to deliver a more balanced and richer set of conclusions. The outcomes of the quantitative data analysis confirmed the general influences of ERP on a range of different structural dimensions. More specifically, it has been shown that the deployment of ERP can lead to a flatter, more decentralized, more standardized and a more tightly integrated organizational structure. Furthermore, the qualitative data provided meaningful insight into the structural impact of ERP, in Chinese context. In addition,, the various analyses found important associations amongst the corporate strategy, organizational structure, ERP deployment and organizational flexibility constructs, and in so doing, demonstrated that the relationship between ERP deployment and organizational structure is not independent of its organizational context. Indeed, it is shown that the results of this study provide support for the 'configurational' view of organizational strategy and behaviour. Finally, this study's results have been strengthened by modelling the technological artefact using a more balanced set of measures than had been employed in previous studies. Indeed, it was demonstrated that the use of ERP success, rather than the scale of its adoption, to model the independent variable, was a more effective indicator of changes to structural design, and ultimately also to the realization of organizational flexibility.