Academic journal article Asian Social Science

The Relationship between Enterprise Resource Planning, Total Quality Management, Organizational Excellence, and Organizational Performance-The Mediating Role of Total Quality Management and Organizational Excellence

Academic journal article Asian Social Science

The Relationship between Enterprise Resource Planning, Total Quality Management, Organizational Excellence, and Organizational Performance-The Mediating Role of Total Quality Management and Organizational Excellence

Article excerpt

Abstract

Purpose: This study was set up to examine the mediating effect of TQM and organizational excellence between ERP and organizational performance.

Design/methodology/approach: To examine the model of the study, design of survey questionnaire was employed through data collected from Dubai Police Departments. Out of 565 questionnaires, 320 only usable returned. Partial Least Square (PLS) structural equation modelling was employed to analyze the data.

Findings: Based on statistical results, the effect of ERP on TQM, organizational excellence, and organizational performance were confirmed. In addition, the effect of TQM and organizational excellence on organizational performance was also confirmed. Moreover, TQM was found to partially mediate the effect of ERP on organizational performance, whereas organizational excellence was found to fully mediate the effect on the same relationship.

Practical implications: The results of this study have several practical implications. This study will help managers and decision makers to take the proper decision when implementing ERP system. Due to that, TQM and organizational excellence are the most important practices to ease the ERP implementation.

Originality/value: This study is considered as the only empirical study that examines the collective effect of ERP, TQM, and organizational excellence on organizational performance.

Keywords: enterprise resource planning (ERP), total quality management (TQM), organizational excellence (OE), organizational performance (OP), Dubai Police (DP)

1. Introduction

The current global competitive environment compels organizations around the world to enhance and increase their performance through implementing innovative strategies in order to sustain their business and remain competitive. To assist the process of development, organizations have to adopted different philosophies and approaches including Total Quality Management, business excellence (Oakland, 1999), and Enterprise Resource Planning (ERP) (Uwizeyemungu & Raymond, 2010).

The resource-based view theory (RBV) of the firm has been used in IT business research to investigate and theorize the effect of rare IT capabilities on sustainable competitive advantages (Masli, Richardson, Sanchez, & Smith, 2010). ERP effects on operations such as in supply chain based on RBV and contingency theories (Hwang & Min, 2013). Previous research has empirically reported a positive relationship between superior IT capabilities and organizational performance. One of those superior IT systems in the last few years is ERP system. The implementation of ERP as an innovative system with large business organizations, and later expanded to cover other organizations such as small and medium-sized organizations (SMEs) (Everdingen, Hillegersberg, & Waarts, 2000) and organizations of public sector (Kumar, Maheshwari, & Kumar, 2002). While some organizations reported potential benefits from ERP implementation, others reported horror stories about ERP system (Barker & Frolick, 2003; Shang & Seddon, 2000). Therefore, the decision of using the most appropriate system is not an easy task. Organizations have to implement a system that can help them to achieve their goals with low risks. ERP as a complicated system can lead to achieve high performance and competitive advantages if supported by other factors inside and outside the organizations.

Total Quality Management (TQM) as a management philosophy can be one of those factors that can help ERP system to achieve the desired goals. It has been argued that TQM is a pre-requisite practice before implementing ERP system (Ghadilolaee, Aghajani, & Rahmati, 2010). Excellence as a desired outcome for any strategy and practice can be also considered as a practice that can help organizations to implement the proposed practice in excellent ways to achieve ultimately the best organizational performance. …

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