The Relationship between Organizational Structure and Enterprise Resource Planning Systems: A Structural Contingency Theory Approach

Despite its tremendous popularity and potential, the field of ERP implementation is littered with spectacular failures. We argue that the integrated nature of ERP systems, which generally requires an organization to adopt standardized business processes reflected in the design of the software, is not suitable for all organizations and is thus a culprit of implementation failures. In this paper we use structural contingency theory to identify a set of dimensions of organizational structure and ERP system characteristics that can be used to determine the degree of fit between the characteristics of the adopting organization and the ERP system, thus providing a set of predictors of ERP implementation success. A set of propositions are developed based on these analyses regarding the success of ERP implementations in different types of organizations. These propositions provide guidance for future research that might lead to guidelines for managers of organizations contemplating implementing ERP systems.

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