Asian Academy of Management Journal, Vol. 11, No. 2, 1–17, July 2006
RESISTANCE TO CHANGE AND ERP IMPLEMENTATION SUCCESS: THE MODERATING ROLE OF CHANGE MANAGEMENT INITIATIVES Zafar U. Ahmed,1 Imad Zbib, 2 Sawaridass Arokiasamy,3 T. Ramayah 3 and Lo May Chiun4 Faculty of Marketing, Texas A&M University-Commerce, Commerce, Texas, USA 2 Faculty of Management, American University of Beirut, Beirut, Lebanon 3 School of Management, Universiti Sains Malaysia, 11800 USM Pulau Pinang, Malaysia 4 Faculty of Economics and Business, Universiti Malaysia Sarawak, 94300 Kota Samarahan, Sarawak, Malaysia e-mail: 1 Zafar_Ahmed@tamu -commerce.edu 1
Enterprise Resource Planning (ERP) is a useful tool that builds strong capabilities, improves performance, supports better decision making, and provides competitive advantage for businesses. ERP aims to help the management by setting better business practices and equipping them with the right information to take timely decision. In any new technology implementation, one of the issues that need to be addressed is the resistance to change. Many implementations have failed due to strong resistance from the end users. Thus, the main purpose of this paper is to test the impact of resistance to change on ERP's implementation success and how change management initiatives acts in the capacity of a moderating role. Using data collected from 69 manufacturing organizations through a mail survey, it was found that resistance to change is negatively related to achievement of predetermined goals ( = –0.930, p < 0.01) and user β satisfaction (β = –0.952, p < 0.01). Further, change management initiatives did not moderate the relationship between resistance and predetermined goals but it moderated the relationship between resistance and user satisfaction. In addition, change management initiatives have a direct positive impact on user satisfaction. This research concludes that the human factor is very important in ERP's implementation . Keywords : resistance to change, change management initiatives, implementation success, moderating effect
INTRODUCTION The business environment has become increasingly complex and the marketplace has changed from local setting to a global one. Constant pressure is applied on the management to improve competitiveness by lowering operating cost and improving logistic. Organizations therefore have to continuously realign their operations to meet all these challenges by being responsive to the customer and competitors. A useful tool that businesses are turning to in order to build strong 1
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capabilities, improve performance, undertake better decision-making and achieve competitive advantage is Enterprise Resource Planning (ERP) (Al-Mudimigh, Zairi, & Al-Mashari, 2001). This was reaffirmed by The Star (January 15, 2002), Malaysia's leading English daily, which reported that ERP has become the prerequisite for companies to compete in global economies, especially in e-commerce era. In addition, ERP application is expected to grow by 32% over the next five years with total market value reaching USD66.6 billions by 2003 (AMR Research, 1999a). In other words, ERP represents 43% of organization's application budget (AMR Research, 1999b). In May 2001, Boston-based AMR Research predicted that total ERP company's revenue will grow at a 14% compounded annual growth rate, increasing to USD36 billion in 2005 from USD21 billion in 2001. Successful business organizations recognize the importance of technology in running an efficient operation and maintaining their competitive edge. The exploitation of technology is a necessity and one can try new technologies only when an individual is ready to adopt the new technology. Successful exploitation of technology occurs at the individual level, as it is the individual employee who operates the various technologies purchased by organization. Thus, adoption of technology leads to another aspect of this whole...
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