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ERP Implementation Among Manufacturing Based SMEs And MNCs : A Malaysian Case Study

Mahadevan Supramaniam (Taylor's University, Malaysia), Mudiarasan Kuppusamy (University of Western Sydney, Australia), Mustafa Dakian (International Islamic University Malaysia) 

 

Abstract:

Given the significant impact implementing enterprise resourses planning (ERP), many small and medium sized enterprises (SMEs) have started adopting the ERP system for their manufacturing processes. This paper is aimed at making a comparative analysis on enterprise resource planning (ERP) system implementation among manufacturing based multinational corporations (MNCs) operating in Malaysia and small and medium sized enterprise (SMEs). The partial least squares (PLS) modelling techique was used to assess the cause-effect associations between technological, organizational and environmental (TOE) factors and successful ERP adoption in these two manufacturing sectors. The empirical result suggests that the causal relationship between technological factor and successful ERP adoption statistically significant for SMEs, this implies that successful ERP system adoption in the sample SMEs seems to be facilitated by the existence of adequate technological and environment factors exclusively. The findings show that Malaysian government has been very supportive in equipping the SMEs with ERP system. The analysis further revealed significant associations between organizational and environmental factors with successful ERP adoption for MNCs. This suggests that MNCs with distinctive size and operational complexity leverages extensively on their organizational and environmental factors to experience successful ERP adoption as opposed to smaller sized SMEs. Based on the empirical findings several theretical and practical implications are highlighted in this study.

Keywords : Enterprise Resourse Planning (ERP) system, Small and Medium sized enterprises (SMEs), Multinational Corporations (MNCs), Technology- Organization- Environment (TOE), Partial Least Square (PLS), adoption.

 

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JMIFR - Vol 8, No.1 2011 - Part 3.pdf

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