Enterprise Resource Planning Productivity Function:the Impact Of CEO Holdings And Horizon And Implementation Characteristics

Abstract

The productivity of Enterprise Resource Planning (ERP) systems has been discussed in several other studies in the past decade. Those studies utilized several research methodologies, including case studies, surveys and archival data. The results were largely consistent with the theoretical predictions that ERP implementation enhances firm productivity. The only exceptions were the results of studies that were conducted using financial archival data as a measure of productivity. This study predicts that the exceptional findings of the previous studies in the ERP-productivity relationship are due to the failure to consider several important factors: CEO equity holdings and horizon, timing of the implementation, type of modules implemented, and the scope of the implementation.

The results were consistent with the study prediction, particularly for CEO holdings with significance in five out of six productivity measures. Moreover, the results of the CEO holdings indicate that within ERP-productivity context, the amount of control (i.e., percentage held by a CEO in a firm) is more important than the dollar value of her/his wealth. Finally, the results also indicate that the influence of an individual CEO on the organization outcome within the context of ERP-productivity is greater than the influence of the other top five executives as a group, after excluding the CEO effect.