1.0 Introduction
Enterprise Resource Planning (ERP) is basically software packages providing enterprise-wide general solutions to several organizational problems. These are considered to be the biggest technological invention since the 1990s old legacy systems (Zhu, Li, Wang, & Chen, 2010). Many organizations are adopting and implementing ERP systems. However, there are some factors that affect influence the rate of ERP adoption and implementation. Among one of the factors is the national culture. National culture is said to be influencing the user satisfaction of the ERP system (Zhang, Lee, Huang, Zhang, & Huang, 2005). However, there are national culture frameworks that explain ERP adoption and implementation. Therefore, this paper seeks to assess the national culture frameworks that explain ERP implementation, describe the nature of the empirical assessment of these frameworks and give my views drawing to a conclusion by giving insightful views of the suitability of the national culture framework in explaining ERP adoption/implementation.
2.0 Task 1: Identifying Frameworks on national culture
There are two main theoretical frameworks identified that are used to explain ERP implementation from the perspective of national culture which are the Hofstede theoretical framework and Hall cultural theory. According to Thavapragasam (2003) in his research on the cultural influence on the successfulness of ERP implementation, he concentrated on national culture dimensions in a large Australian University thus using Hofstede’s cultural theoretical framework in assessing user satisfaction and as well address the significance of user satisfaction in ensuring that ERP implementation is a success. The assumption of this framework is that in order to have the capacity of acting together, people should understand and distinguish between cultures (Thavapragasam, 2003). In the study, the author used Hofstede theoretical framework on national culture dimensions by applying the theory to create a comparison among the culture that exists among the users selected to undertake the research.
In a study undertaken by Chandhar and Rahmati (2004), Hofstede and Hall cultural theories were used in exploring the influential state of national culture. Hofstede describes culture to be collective programming of mind differentiating members belonging to one group from another group whereas Hall view culture as a screen lying between an individual and his environment enabling him to determine what is more significant for him (Chadhar & Rahmati, 2004). To apply the theories, two countries were selected, Australia and Saudi Arabia; which have different and opposite cultural dimensions. The main intent behind this selection was to determine; users utilizing the same system, uncertainty avoidance, operating in the same type of company, low versus high context, undertaking same job roles and duties but differing in power distance, individualism versus collectivism, as well as determining how they relate with the system (Chadhar & Rahmati, 2004).
Van Everdingen and Waarts (2003) carried out a study using Hofstede and Hall cultural theoretical frameworks to investigate national culture’s role in explaining the differences existing in ERP implementation rates in various countries. Particularly, they investigated the impacts of the 5 Hofstede cultural dimensions as well as Hall’s proposed culture dimensions on country adoption and implementation rates (Van Everdingen & Waarts, 2003). In essence, the hypothesized impacts were tested utilizing a large scale empirical research regarding the ERP adoption software by companies across 10 European countries.
Rajapakse and Seddon (2005) undertook a study investigating ERP adoption process; specifically, the way cultural misfits can result in low ERP adoption rates in Asia, which is typically a contemporary aspect in real life setting. The authors used Hofstede theoretical frame in the research. Based on Hofstede framework data, only power distance as well as individualism determined to vividly differ from Asia to the United States and Germany (Rajapakse & Seddon, 2005). Using these two dimensions were determined to be associated with the way people work together and was projected to be likely to cause problems in implementing the western-based ERP systems within Asian states. Therefore, the authors concentrated only on power distance as well as individualism dimensions.
3.0 Task 2: Describing how national culture frameworks explain ERP adoption/implementation
Theoretical frameworks are very important in guiding research and also help in explaining the ERP implementation in organizations. Essentially, ERP implementation gives differential benefits to organizations. Hofstede theoretical framework helps in explaining ERP implementation through its four dimensions. Studies show that national cultural values, signified by the four dimensions, exhibit themselves as largely as organizational cultural practices (Rajapakse & Seddon, 2005). This implies that ERP implementers may effectively design configurations as well as start organizational change programs through redesigning their CSFs, based on their national culture orientations, so as to attain the implementation success and therefore result in greater business performance. Moreover, Hofstede theory validation is useful in the ERP implementers. This framework addresses the effect of various ERP deployments based on performance as well as a national culture on CSFs enables ERP implementers to restructure their implementations and attain successful ERP implemented worldwide (Karahanna et al., 2005). Hofstede theoretical framework is made up of four dimensions which help in describing national cultures. They include; power distance index, uncertainty avoidance index, individualism index and also masculinity index. These dimensions help in explaining ERP implementation in various ways.
Power Distance Index; In Hofstede’s view, firms in countries having high power distance normally are characterized by a central decision structure, usage of formal rules as well as authority. Information dissemination is limited by the hierarchy. High extent of centralization, as well as formalization, tends to be attributed to lower innovation implementation. The reason behind this can be because, in a centralized organization, the top management is of not capable of identifying operational problems and also in suggesting the introduction of inventions to address these issues by adopting and implementing an ERP system (Madapusi & Ortiz, n.d.). Furthermore, this dimension suggests that informal organizations, the subordinates can pursue minimal initiative in considering and discussing the introduction of new items in the company. The subordinates will have to chill for the top management to undertake the program. Therefore, giving the assumption that the higher a country’s power distance index score; the less probability for organizations within that country in adopting innovations and hence results in low innovation adoption rate within that country.
Uncertainty Avoidance Index; Organizations within a country experiencing some uncertainty avoidance index typically exhibit traits like resistance to high formalized management as well as the limiting of innovations through rules (Thavapragasam, 2003). Within high uncertainty avoidance index cultures, risk-prone attitudes suggest that organizations will not actually risk and just adopt innovations suppose their value has already been predetermined to be marketable. Uncertainty avoidance index simply helps in explaining cross-country by organizations as well identified an important negative impact. Therefore giving the assumption that; the higher the uncertainty avoidance index scores of a country, the lower the likelihood of organizations within that country to adopt and implement ERP innovations and hence resulting in reduced adoption rate.
Individualism Index dimension defines the correlation between a group and an individual. Within a collectivist country, one action kowtows to a certain group’s norms. Moreover, organizations operating under collectivistic cultures have characteristics such as making collective decisions, which may result in delays in adopting a decision process or ERP system (Shanks et al., 2000). On the other hand, in individualistic countries, everyone has the liberty of making their own independent choices. In organizations too, individual decisions are believed. Additionally, employees belonging to organizations within individualistic countries tend to have more freedom for developing or trying new products than employees from a collectivistic country. It is determined that patents are provided more in individualistic countries as compared to collectivistic countries. Studies have also exhibited a positive correlation between national innovativeness and individualism hence giving the assumption that; the higher the individualism index score for a country, the more probable the organizations within that country are to embrace innovation and therefore leading to high ERP adoption rate.
Masculinity index simply is in charge of expressing the extent to which a national culture is portrayed and dominated by masculine or feminine values (Huang & Palvia, 2001). Essentially, feminine cultures are exhibited by values such as social relationships, equality, managers’ usage of intuition and looking for consensus. Contrary to that, material values, competition, a determination as well as focusing on performance is dominated and exhibited by masculine cultures. Hofstede implies that in organizations of masculine cultures, the focus is on the rewards as well as acknowledgment of the performance characterized by innovative organizations.
In Hall’s approach, to explain on ERP implementation it focuses on differentiating between low and high-context cultures and also creates a distinction between monochronic and polychronic cultures. For low vs high-context cultures, provided that adoption decisions are mostly reinforced by means of processing information as well as extending decision-making process, it can be anticipated that organizations in low-context cultures utilizing the formal information sources tend to be faster in adopting innovations such as ERP systems (Chadhar & Rahmati, 2004). In monochronic vs polychronic cultures, the distinction is on the basis of the attitude of the culture towards time. Individuals within monochronic cultures tend to be more focused on one thing in a given time and are very organized and time conscious whereas individuals in polychronic cultures tend to be unorganized, opportunistic and less punctual.
4.0 Task 3: Nature of empirical assessment of the national culture frameworks for ERP context
The empirical assessments tend to use two case studies and as well focus on making comparison and distinction among various groups from different cultures. The case studies utilized to assess the phenomenon under study are from the real world context and can be exploited and used to develop a theory (Karahanna et al., 2005). In the empirical assessment, a process model as well as some vital success factors are synthesized from the literature obtained then given a framework whereby the interview protocols are established as the data for the case study are provided. Essentially, the unit of analysis within the study is the project team whose role and obligation entail planning and implementation of ERP systems as well as the end user of ERP. There are various ways of collecting data such as conducting surveys, questionnaires or undertaking observation. A specified time that data collection will take is specified and based on the protocols established. Data collection in the form of questionnaires or surveys has to be centered on the management, planning, implementation and the use of ERP system. Also, the documentation is done during the data collection process.
Two case studies tend to be normally presented for study and mostly have to be from different and opposite cultures so as to facilitate cross-case comparison. For example, the groups under study can be from China and the United States. Interviews are equally conducted from the two groups under study (Karahanna et al., 2005). Other data can be obtained from literature reviews associated with these groups. Data collected may include; the background information both cultures, information regarding phases of ERP implementation procedure. The data collected are then assessed and synthesized using the framework provided. The frameworks that may be used are, Hofstede theoretical framework, and Hall cultural theory.
5.0 Task 4: Views on empirical assessment of the application of the national culture frameworks for ERP context
In my view, I think an empirical assessment of the national culture frameworks for ERP is appropriate. The fact that the assessment begins by using two case studies and also making comparison and distinction among various groups from different cultures, this gives strength to the assessment as this difference will help in creating a distinction that will bring viable results and create a better understanding. However, in the part of data collection, more data collection methods should be employed so as to get more data that will facilitate the assessment. Additionally, time for data collection should be equal for both cultural groups and based on the same protocol. I tend to agree that it is necessary to use two opposite cultures in order to facilitate cross-case comparison, especially during the theoretical framework analysis. Documentation is critical and should be well organized.
In the application of the theoretical framework, in the Hofstede theoretical framework it is important that all the data obtained is assessed through all the four dimensions. In the power distance index dimension, firms in countries having high power distance normally are characterized by a central decision structure, usage of formal rules as well as authority. Additionally, information dissemination is limited by the hierarchy. This is a weakness in this framework because effect information dissemination is important to ensuring a proper implementation of the ERP system and since it is limited by hierarchy the implementation process of ERP is constrained. The fact that high extent of centralization, as well as formalization, tends to be attributed to lower innovation implementation, I find this power index dimension to be an appropriate approach in determining the rate and capacity of a country’s adoption of innovations such as ERP systems (Madapusi & Ortiz, n.d.). Furthermore, this dimension puts more emphasis on the critical factors such as the role of subordinates in formal organizations in taking part in adopting new items or innovation into the organization. This is evident as this dimension suggests that in formal organizations, the subordinates can pursue minimal initiative in considering and discussing the introduction of new items in the company. It gives exhibit more strength by emphasizing that the subordinates wait for their top management to undertake the management. Therefore, the researcher needs to take note that the higher a country’s power distance index score; the less probability for organizations within that country in adopting innovations and hence results in low innovation adoption rate within that country.
In the uncertainty avoidance index dimension, characteristics such as resistance to high formalized management and limitation of innovation through rules and regulation are characterized by organizations in a country (Thavapragasam, 2003). This dimension is effective since it implies that organizations will not actually risk and just adopt innovations suppose their value has already been predetermined to be marketable. This dimension is critical since it assists in explain ERP system adoption and implementation. It is therefore important to note that the higher the uncertainty avoidance index scores of a country, the lower the likelihood of organizations within that country to adopt and implement ERP innovations and hence resulting in reduced adoption rate (Van Everdingen & Waarts, 2003).
For individualism index dimension, it defines the correlation between a group and an individual. I find this dimension being appropriate at it seeks to identify and define the relation that exists between a group and individuals. This helps in creating a distinction between groups and their respective cultures on their views on how they adopt new innovations. Essentially, within a collectivist country, one action kowtows to a certain group’s norms. Moreover, organizations operating under collectivistic cultures have characteristics such as making collective decisions, which may result in delays in adopting a decision process or ERP system (Shanks et al., 2000). Alternatively, in individualistic countries, everyone has the liberty of making their own independent choices. Therefore, the researcher should note that the higher the individualism index scores for a country, the more probable the organizations within that country are to embrace innovation and therefore leading to high ERP adoption rate.
Essentially, masculinity index dimension is concerned on expressing the extent to which a national culture is portrayed and dominated by masculine or feminine values (Huang & Palvia, 2001). I find this dimension being straight to the point. Gender plays a big role in our society and development. Therefore, it is important to examine both feminine and masculine cultures in order to determine how the influence the rate of adoption and implementation of new innovation such as ERP systems. Actually, feminine cultures are exhibited by values such as social relationships, equality, managers’ usage of intuition and looking for consensus. Contrary to that, material values, competition, a determination as well as focusing on performance is dominated and exhibited by masculine cultures. The researcher should note that in organizations of masculine cultures, the focus is on the rewards as well as acknowledgment of the performance characterized by innovative organizations (Zhu et al., 2010).
In Hall’s approach specifically in the distinction between low and high-context cultures, I find it being an appropriate approach because it draws into conclusion based on the finding from the distinction made with regards to culture context. This makes this approach to be viable since the differences in culture context within groups helps to define the capacity and rate of adopting innovations.
6.0 Task 5: Conclusion
To sum up, the national culture framework is appropriate in explaining the ERP adoption and implementation. It is suitable in explaining ERP adoption and implementation because it has relevant theoretical frameworks, Hall Cultural Theory, and Hofstede Cultural Theory. Specifically, Hofstede theoretical framework vividly explains ERP implementation through its four dimensions. In fact, this framework is based on compassion of two case studies making a distinction between groups of different and opposite cultures. This helps in giving strength to the assessment as this difference will help in creating a distinction that will bring viable results and create a better understanding of influence of national culture in the adoption and implementation of ERP system.
Through this framework, national cultural values, signified by the four dimensions, exhibit themselves as largely as organizational cultural practices. It is vivid that national culture plays a critical role in determining the country’s capacity to adopt new innovation. Implementation of ERP systems significantly depended on the national culture. Therefore, this makes Hofstede theory appropriate in assessing a country’s national culture in order to determine the country’s capacity to adopt the ERP system and other innovations. This theory is very resourceful for ERP implementer since it assess the national culture orientation of a country which is useful in planning and organizing for a successful ERP implementation globally. Therefore, this framework is viable for determining the rate and capacity of a country’s adoption of innovations such as ERP systems.
Additionally, this framework is essential since it is straight to the point as it considers gender being a great player in the society’s role. It focuses in examining feminine and masculine cultures in order to determine how the influence the rate of adoption and implementation of new innovation such as ERP systems. Moreover, this framework is appropriate because it focuses on defining the correlation between a group and an individual. This makes this framework to be appropriate as it seeks to identify and define the relation that exists between a group and individuals. As a result, it identifies the common factors that influence the groups and individuals’ will and capacity to adopt new innovations.
Also for Hall’s approach it explains the ERP adoption through the distinction of low vs high-context cultures, provided that adoption decisions are mostly reinforced by means of processing information as well as extending the decision-making process, the capacity of a certain group or a country to adopt new innovation can be predetermined. Therefore, the national culture framework is suitably explaining the ERP adoption in a country.