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|Author:||Tossavainen, Päivi J.|
|Title:||Transformation of organizational structures in a multinational enterprise : the case of an enterprise resource planning system utilization|
|Series:||Acta Universitatis oeconomicae Helsingiensis. A, 1237-556X; 253|
|Year:||2005 Thesis defence date: 2005-06-16|
|Electronic dissertation:||» dissertation in pdf-format [1563 KB]|
|Index terms:||Change; International companies; Kansainväliset yhtiöt; Muutos; Organisaatiomuutos; Organizational change|
|Bibid:||321512 | Availability info (Aalto-Finna)|
|Abstract (eng):||Due to constant changes, multinational enterprises (MNEs) are interesting phenomena to study. An MNE has several units across separate geographical locations with different degrees of freedom in their activities. Hence, an MNE is geographically, time-wise and environmentally (both externally and internally) diverse. As the information used in managing an MNE originates in different locations, it is fragmented. Some of the new information systems are developed to integrate this fragmented information. For example, enterprise resource planning systems (ERPs) are developed to integrate operational data with logistics business processes. This research examined how a leading multinational enterprise in the telecommunication industry managed an enterprise resource planning system to support its operations and logistic business processes globally.
The increasing application of complexity sciences in the field of MNE management motivated the research. Moreover, the ambiguity of ERP research, and especially the notion of failures in implementing ERPs, provided further motivation. The dissertation identifies an organizational research problem: the influence of ERP in the transformation of organizational structures. In the study, the implementing organization structure was analyzed. This doctoral dissertation answers the following research question: Does enterprise resource planning system have impact on the implementing organization? The main thesis of the dissertation is that to enable long-term ERP use requires fundamental changes in the implementing organization structure and governance. A new permanent organization structure that integrates business and information technology (IT) domains is needed to accomplish variety of tasks related to the ERP system.
The argumentation for this is the following: because the implementing organization defines ERP, it must reflect the MNE strategies and management. Therefore, new organizational capabilities are required for the implementing organization to achieve the promised benefits associated with the ERP. These capabilities include business knowledge such as the MNE form and its implications, how MNE uses ERP as a control and coordination mechanism, and business operations, activities and processes. Likewise, the capabilities include information technology knowledge such as ERP utilization dimensions, integration level, and their implications. Moreover, the organizational capabilities include self-organizing capability. Hence, the conventional view of organizing ERP utilization is applicable but less valid with a single instance ERP in an MNE. The single instance ERP refers to a universal ERP solution for the focal MNE in which only one ERP system (i.e. instance) is used throughout the enterprise.
The present research examined through a single case study, how an ERP system has influenced the implementing organization structures of an MNE contributing to the formulation of novel implementing organization structures. It analyzed the rare case of a single instance enterprise resource planning system. An empirically driven and application-oriented study was conducted. Empirical evidence from a single case was collected with multiple methods: participant observations, secondary sources of data, semi-structured interviews (qualitative), and electronic survey (quantitative).
The research makes several contributions. To conclude, the main findings are as follows: first, the management of the utilization of the enterprise resource planning system was addressed from the organizational perspective. More specifically, from the implementing organization perspective. Second, the research developed a conceptual model for utilizing an ERP system in an MNE from the organizational perspective. According to the model, the utilization of an enterprise resource planning system in an MNE can be explained by the following elements: 1) organizational awareness, 2) imperfect autonomy, 3) change orientation, 4) transformation triggers, 5) ERP system impact, and 6) successful performance. Third, the research defined two constructs. To enable the long-term use of the ERP system i.e. utilization, was defined through five dimensions of initial implementation, enhancements, deployment rollouts, support of the use, and upgrades. In addition, the integration levels of the ERP system were defined. The research discovered that both these constructs influence the organizing. Fourth, the study identified two types of organizational transformation: guided and self-organized. Fifth, the research revealed that the organization structures evolved from temporary to permanent. The evolutionary path of the organization structure followed the typology of chaotic, flexible, planned, and rigid forms. The reasons for the movement on the transformation trajectory were discussed. The self-organizing is pivotal. The highest level of self-organizing was observed during the chaotic and flexible forms. The increase of rigid ness decreased the self-organizing capability. On the actor level, the transformation resulted in hybrid managers and hybrid teams, which aimed to close the gap between the business and the IT domains. Their capability to self-organize contributed to the success of the ERP case. Based on the case study results, the dissertation suggests changes in the organizational mechanisms.
|Thesis defence announcement:|
Tampere University of Technology, Finland