Management accountants’ influence on centralization of information through ERP implementations

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Amsterdam Business School

Management Accountants’ influence on Centralization of Information

through ERP implementations

Name: Jim Rozenberg Student number: 10468048 Date: 25-Jan-15

Word count: 20,102

MSc Accountancy & Control, variant Control Amsterdam Business School

Faculty of Economics and Business, University of Amsterdam Supervisor: Dr. Ir. S. van Triest

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Statement of Originality

This document is written by student Jim Rozenberg who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract Purpose

This case study aims to contribute to the deeper and richer understanding of the influence of management accountants on successful implementation of an Enterprise Resource Planning system (ERP system).

Design/methodology/approach

Four companies in the Construction Industry are studied. The researcher participated as an external consultant during ERP implementations in the case

companies. In each company the Management Accountant was interviewed and one or two other participants of the ERP project. Giddens’ Structuration Theory was used as analytical framework.

Findings

The organizations’ objectives of implementing ERP focused on Centralization of Information: using standardized procedures and norms to record information regarding operational processes. In all cases, the management accountants took the initiative for the ERP system. Since they are responsible for management reporting they benefitted more from the new ERP system than any other actor.

Using structuration concepts to explain the success of implementation, we find that the domination dimension was high on formal power allocated to the MA for successful implementations, while top-management support was not always present. Significance was enhanced through high involvement of the MA beyond the configuration phase. Legitimation issues were invariably sources of resistance, which were overcome when the MA re-allocated resources to support to actors. Resistance could be prevented when building on pre-ERP institutionalized constructs.

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Practical implications

The findings provide for information which strategies contribute to more support of implementing new ERP systems and mentions critical resistances management accountants may expect they need to mitigate. The findings also provide knowledge how prior to implementing ERP social actions can be prepared that benefit the acceptance of the to-be implemented ERP system.

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Originality/value

The combination of State-of-the-art ERP, Management Accountants and Giddens’ Structuration Theory contribute to a better understanding of how and why social actions in this context lead to new institutionalized properties. The strategy of this study could also be applied in other industries. The operalization how in this study the systems of Domination, Signification and Legitimation are measured form a basis to expand it to other Industries. As only four companies are part of this study, extended research

whether and why similar arguments apply or additional ones are found further contribute to theory.

Acknowledgements

I would to thank the management accountants and their colleagues of the studied organization for allowing the research to be done in their company. Their supportive cooperation in disclosing information was essential to writing this thesis.

I would also like to thank dr. ir. Sander van Triest for his guidance how to write a thesis, reviewing this master thesis and the providing of helpful comments on earlier drafts of this paper. Working with dr. ir. Van Triest was a privilige.

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Contents

1 INTRODUCTION... 1

2 BACKGROUND & LITERATURE REVIEW ... 4

2.1 ERP-ENTERPRISE RESOURCE PLANNING ... 4

2.2 ERP IN THE CONSTRUCTION INDUSTRY ... 4

2.3 ADMINISTRATIVE PARADOX ... 6

2.4 MANAGEMENT ACCOUNTANTS –TRADITIONAL ROLES AND CHANGES ... 9

2.5 STRUCTURATION THEORY ... 10

2.6 EXPECTED RESEARCH FINDINGS BASED ON LITERATURE ... 14

3 DEVELOPMENT OF THE RESEARCH QUESTION... 16

3.1 RESEARCH QUESTIONS QUALITATIVELY APPROACHED ... 16

3.2 RESEARCH QUESTIONS QUANTITATIVELY APPROACHED ... 17

4 METHODOLOGY... 18

4.1 QUALITATIVE AND QUANTITATIVE APPROACH ... 18

4.2 ORGANIZATION &INTERVIEWEES ... 19

4.3 QUANTITATIVE SUPPORT -MEASURING THE PROXIES ... 21

4.3.1 Proxies measuring the Centralization of Information through ERP functions ... 22

4.3.2 Proxies measuring the involvement of the Management Accountant ... 22

4.4 INTERVIEWS ON RATIONALES FOR (NOT) SUPPORTING CENTRALIZATION OF INFORMATION ... 22

4.5 ANALYZING THE CONSTRUCTS ... 22

4.5.1 Qualitative ... 22

4.5.2 Quantitative ... 23

5 RESULTS ... 24

5.1 REALIZATION OF MANAGEMENT’S ERP OBJECTIVES ... 25

5.2 CLUSTERS OF SUPPORT AND RESISTANCE TO IMPLEMENTING ERP ... 27

5.2.1 Signification ... 28

5.2.2 Domination ... 28

5.2.3 Legitimation ... 29

5.3 COMPANY I ... 30

5.3.1 Domination – the role of the Management Accountant ... 30

5.3.2 Domination – the role of the other actors ... 31

5.3.3 Semantics – role of the management accountant ... 32

5.3.4 Semantics – role of the other actors ... 33

5.4 COMPANY II ... 35

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5.5 COMPANY III ... 39

5.6 COMPANY IV ... 42

6 DISCUSSION AND CONCLUSIONS ... 46

6.1 RESEARCH QUESTION 1 ... 46 6.2 RESEARCH QUESTION 2 ... 47 6.3 RESEARCH QUESTION 3 ... 51 6.4 DISCUSSION ... 52 7 REFERENCES ... 54 8 APPENDIX I... 58

A. QUANTITATIVE MEASUREMENTS OF BUSINESS FUNCTIONS ON CENTR.OF INFORMATION ... 59

B. QUESTIONS ON THE OBJECTIVES OF SENIOR MANAGEMENT ... 65

C. QUESTIONS ON THE LEVEL OF INVOLVEMENT OF MA... 65

D. QUESTION FOR ACTORS OF THE BF’S AS CONTRA-FORCES ... 66

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- 1 - 1 Introduction

Scapens and Jazayeri (2003) find that early ERP implementations have a large impact on the work of management accountants. They mention: (i) routine jobs are eliminated, (ii) accounting knowledge becomes more widely available, (iii) forward-looking information becomes important, and (iv) the role of the management accountant becomes broader than just a numbers provider. Scapens and Jazayeri’s (2003) findings picture the management accountant as a somewhat passive person, who has to deal with the changes brought on by the ERP system. In this thesis, I investigate how

management accountants impact the implementation of ERP systems. I do this through examining four ERP implementations in a single industry.

Although much research investigates acceptance of ERP systems (Umble E.J., Haft R.R. and Umble M.M. 2003; Al-Mashari M., Al-Mudimigh A. and Zairi M. 2003; Doom C., Milis K., Poelmans S.; Bloemen E. 2010; Hustad, E. and Olsen, D.H. 2013) or resistance to change during ERP implementations (Momoh A., Roy R. and Shehab E. 2010; Žabjek D., Kovačič A. and Štemberger M.I. 2009), my focus is on the extent to which the ERP implementation contributes to the centralization of information, that is, the extent to which the ERP system provides top-management the significant facts about what is going on in and around business, being one of the chief bases for

strategic business decisions (Sloan, 1963, p. 118). Centralization of Information in this thesis focuses on the implementation of directives concerning methods of uniform working. This is based on the implemented ERP system to ensure such a level of consistency of the Financial Model that the significant facts about what is going on in and around business can become available to top-management. The ERP objective of Information to top-management in this thesis is the central theme. This is further referred to as Centralization of Information.

Successfully implemented Centralization of Information through an ERP

implementation may influence company results positively. A typical effect based on centralizing data is related to the procurement of materials, subcontracting and

equipment rental. It is the centralized insight of the purchased volumes that result in an improved procurement position because of the economies of scale (Mitra and Chaya, 1996; Harris and Katz, 1991). Next, centralized insights on the level of Working Capital across the company contribute to improve the companies’ access to the capital

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investment market. Centralized insight on order books leads to efficiently allocate personnel resources across the working companies. Even make or buy decisions on equipment can be improved by central decision-making based on the overall

requirements planning. Such effects can only come to a level of realization if the implementation of the Centralization of Information is done accordingly successful.

ERP implementation may suffer from usage resistance. The management literature has defined resistance to change as ‘the forces against change in work organizations (Mullins, 1999, p. 824). Resistance determinants have been described in literature. Some relate to individuals like job insecurity (De Jager, 1994). Others relate more to resistance on company level like misalignment of the system with the organization (Gosain, 2004) and the undesired trading out of the business functions’ flexibility to respond to business requirements with a more stable organization (Leana and Barry, 2010).

Both technology acceptance and resistance to change will impact the success of Centralization of Information. I investigate the role of the management accountant in moderating the impact of acceptance and resistance. I expect that the level of fulfillment of the objectives of centralization of information defined prior to implementing ERP are moderated by the Management Accountants. Management accountants play an

important role here because of their role as executioners of top-management (MacIntosh, 1985), previous experiences in cross-functional taskforces and their

professional background (Byrnes and Pierce, 2007). Their power to influence the results of the ERP implementation implies resistance of other actors participating in the ERP project. This thesis researches how the management accountant moderated the ERP project, which resistance he experienced and how the Management Accountant acted upon it.

The research focuses on companies active in the project-driven Industry such as Construction Companies and Technical Solution Providers delivering services for the construction of houses, offices, roads and other infrastructural objects. Four companies in this Industry were interviewed. The company-size and structure of the companies involved in the research have the following commonalities: (i) they are divisions of a holding company, (ii) they have multiple working companies and (iii) there’s a

geographical distance between on the one hand division management and controlling staff and on the other hand the working companies’ management and employees.

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(iv) The ERP solution implemented in the division and its working companies are all based on the same product called 4PS Microsoft Dynamics NAV. This is a best-practice standardized ERP product for the described Industry. The functions of this ERP product can be activated in many alternative ways by choice of the implementing company. This is referred to as “Configuring the ERP system”. The configuration process results in activating more or less functions to support Centralization of Information. Centralization of Information in this thesis is referred to as the level of access and availability of

information in the ERP system to top-management. The data required for the information is captured resulting from implementing a company-wide ERP system.

Via semi-structured interviews in four different companies Management Accountants and eight other business functions have been interviewed. The questions relate to get in-depth knowledge on: (i) how the Management Accountant was involved in the ERP implementation project, (ii) which acceptance and resistance appeared at the other business functions and (iii) how the Management Accountant dealt with the resistances. In the interviews with the Management Accountant a score-table was filled out

measuring the objectives on Centralization of Information of top-management. Another score-table was filled out measuring the realized level of Centralization of Information. The score-tables were newly developed for this research. The quantitative data served as additional knowledge on the effectiveness of the Management Accountants’

moderating impact. The interviews were recorded, transcripted and reviewed by the interviewees.

The research resulted in the following findings:

(i) Management Accountants initiate the implementation of ERP

(ii) After-live ERP initiatives for optimizing ERP is initiated primarily by other than Management Accountants

(iii) The level of involvement of Management Accountants in ERP implementations is related to the level of implemented ERP functions ensuring Centralization

(iv) Resistance to ERP increases significantly when construction-site actors (not working in the offices) are to use ERP,

(v) Resistance decreases when compensated by personal gains,

(vi) Resistance decreases if ERP objectives are aligned with moral and cognitive legitimacy

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- 4 - 2 Background & Literature Review

2.1 ERP - Enterprise Resource Planning

In general terms ERP can be described as a computer program that provides a business working platform for all business functions integrated into this program. In the 70’s and 80’s the Manufacturing Industry pioneered with automating MRP and MRPII (Elragal and Haddara, 2012). ERP was born in the 90’s when MRP integrated with logistic-, financial-, human resources, sales force, electronic commerce and supply chain applications. ERP became a platform to improve managing and/or planning all resources across the enterprise. In the new millennium ERP developed beyond the internal business functions. Exchanging information with the outside world expanded the scope of ERP into an inter-organizational IT business platform.

Over the years ERP systems became less custom-built. Instead best-practices were developed in standardized ERP products which an ERP vendor marketed to its

customers. The standardized ERP products continued to grow in functions and features over the years threatening to overkill a company with it. To control for the many

functions and features companies are able to switch on or switch off functions and parametrize the ERP product for alternative usage. This controlling process is referred to as the configuring of an ERP system.

Being able to configure an ERP system means that it is possible to influence the way Information Technology is deployed. The ability to configure an ERP system is a

platform in which interaction between principals and agents are unfolded through which institutional properties can be exchanged.

2.2 ERP in the Construction Industry

ERP systems have their roots in de Manufacturing Industry. In the process of production information is to be dispatched from one processtep to the next. The processes and its steps of a Manufacturing Industry Company differs from a

Construction Industry Company as the business environment is very different. Riley and Clare-Brown (2001) describe that Construction companies are challenged by the

geographically distributed sites of their construction projects. On these sites the workforce is not only constituted of the employees of the construction company but typically also out of the many employees working for the subcontractors. This requires

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extensive site-management on these short-term sites and is a big contrast to the long-term stable environment of a Manufacturing plant. The typical challenge is to manage the many conflicts resulting from adverse interests between the main-contractor and its sub-contractors. A challenge less known in Manufacturing Plants.

Shi and Halpin (2003) underline that the Construction Industry operates in such different way than manufacturing companies that the original ERP systems needed to be redefined. They called for a Construction ERP (CERP) system and defined a

conceptual CERP architecture. Part of this architecture are the central applications. It is based on a central database that contains cost data, project data, equipment

information, and any other corporate-level information. They organized the central applications into three categories: (1) corporate-level applications; (2) project-level applications; and (3) back-office applications. The corporate-level applications mainly aim at typical Construction Industry corporate level activities. They include planning corporate resources, determining bidding strategy for new projects, determining the marketing strategy, determining the operation and business strategy of the enterprise, and providing corporate management tools. The project-level applications serve the following project-level functions: cost estimating, scheduling, planning, resource-management, progress reporting and control, and quality assurance. Backoffice-level applications include human resources, purchasing, warehousing, accounting, financing, and equipment management. The applications are illustrated in figure 1.

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To control for the many variants this specific Construction Industry is selected. This Industry has highly uniformed processes and business functions. A uniform context allows for an improved level of explanatory power of the findings of the research performed. Therefore the Construction Industry provides an environment in which the moderating effects of Managements Accountants can be analyzed up to the level sought.

2.3 Administrative Paradox

Thompson (1967) describes the dilemma of contemporaneous striving for stability and flexibility when organizing. He discussed the dilemma in terms of an organization’s administrative paradox. As described by Leana and Barry (2000) flexible organizations have advantages and stable organizations have other advantages. Stability in

organizations is for example important in a production process where any disturbance is costly. Other advantages are sustaining competitive advantages, keeping social capital, being predictable or reducing uncertainty to stakeholders. If a company does well, stability in its organization may be a preferable strategy. Flexibility in organizations offers the advantage of being more able to improve the organization towards adapting to new markets and products, performing efficiency programs or create other

competitive advantages.

A company would like to have the advantages of both stability and flexibility, but that’s like trying to see both sides of a medal. Choosing relatively more for flexibility equally relatively reduces the ability to get the advantages of stability and vice-versa. It becomes a trade-off or a paradox, exchanging parts of one advantage for parts of the other one.

ERP systems are featured for supporting the formalizing of actions to reduce undesired variation among people in, and between organizations and provides procedures for accomplishing them. In the context of this thesis this means that ERP ensures such a level of consistency of the Financial Model across the regional operations, where Sloan (1963, p. 118) is referring to, that the significant facts about what is going on in and around business can become available to top-management. The more the application of Information Technology is regulated the more stable, predictable and controllable the organization will be. Yet the other side of the medal is,

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that prescribed or even mandatory methods of working may be contra-productive when agility is required to respond to changing business environments. Therefore it is

expected that Centralization of Information through implementing ERP will increase stability and decrease flexibility. Moreover it is expected that this will lead to resistance to change (Alvarez and Urla (2002), Keen (1981), Sheth (1981), O’Leary (2000)) and thus impacts the success of implementing Centralization of Information.

Melin (2010) described that the implementation of an Enterprise System is part of the administrative paradox. Following from the strategy chosen in the administrative paradox the ERP systems’ configuration objectives are derived. Melin (2010) found that these objectives change over time; it’s like shooting at a moving target as the

organization will continuously seek to co-align being flexible and at the same time absorb uncertainty. In the case study of Melin (2010) it was specifically found that the ERP system centralizes control and maintained or reinforced administrative

organizational structures. In this case-study the researched firm in the short-run seeked reduction of uncertainty, more stability and more efficiency. Standardization of work processes was required. In the long-run the combination of business and IT platform can be used as an infra-structure that is more flexible and allows for more freedom of action. From this case-study it appears that implementing an ERP system leads to the stability side of the medal of the administrative paradox.

This appears to be contrasting to what MacIntosh and Quattrone (2010) argue. Their finding was that an implementation of an ERP system to integrate business functions, and to increase control and accountability, had the opposite effect. In their case-study they found that accounting inscriptions, traditionally done by centered accountants, now were done by potentially “everyone”. Logistical transactions were posted by operations instantaneously and materially affect the books. Accountants now no longer were

master of their traditional field. Initially the implementation led to a dilution of control and created disorder. As a response the management of the organization translated these issues into constraining access to maintaining integrated data. Specific harnessed protocols trying to restore “control” were additionally implemented. The findings of MacIntosh and Quattrone (2010) however seem to describe issues of the ERP implementation. Improved methods of administration directed by the Management Accountant would be an alternative way to sustain the Management Accountant

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Bloom et al (2014) explicitly separate Information and Communication Technology in two components; Information Technology and Communication Technology. Information Technology is defined as the access to information through the availability of data storage and data processing. Communication Technology is defined as the access to information through wired or wireless communications. Top-management is located at such a distance that they cannot access Operations’ IT system without the deployment of Communication Technology. The finding of Bloom et al (2014) is that improvements in the availability of Information Technology lead to Decentralization and that

improvements in the availability of Communication Technology lead to Centralization of Information. Increasingly standardized best-practice-ERP products resulted in falls in information acquisition costs facilitating more effective employee decision-making. For example the project-scheduler can have direct access to the information of updated delivery-dates of purchase orders. With this information he now can make a better decision when to schedule project activities depending on these delivery dates.

Resulting from improved Information Technology, employees in the lower regions of a company increasingly have the required information available. This also leads to a more cognitive burden to them. It requires more capabilities to access and use the increased information to improve their decision-making. However they need less reliance on corporate headquarters’ direction. The improved Information Technology capabilities pushes decision-making down thus leading to decentralization of control. Falls in communication technology through the improved availability of intranets make information from local operations more accessible to corporate headquarters. The

cognitive burden of local managers can be substituted for the knowledge from corporate headquarters. Top-management now has increased knowledge of what’s going on in and around their businesses.

From the case studies of Melin (2010) and MacIntosh and Quattrone (2010) we learn that the actors higher up the hierarchy strive for being better informed on how business is done in and around their company. However ensuring an ERP configuration such that ERP data transactions are efficient to Operations, and simultaneously

accessible to top-management seems to be a challenge. From Bloom et al (2014) we learn that top-management increases their knowledge of what’s going on in and around their businesses resulting from increased availability of Communication Technology. Building upon the theories that ERP and Communication Technology increase stability

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this thesis aims to find explanatory findings why actors of an organization support increased stability or resist decreased flexibility. This thesis researches the reasons behind a successful or failing ERP project in terms of Centralization of Information.

2.4 Management Accountants – Traditional roles and changes

Management accountants traditionally played a major role in the implementation and execution of management control in organizations (Macintosh, 1985). Later also

described in Simons’ Levers of Control (1995) when control systems are deployed. The experiences of Management Accountants in the former two decades in participating implementing ERP Systems have put them in a changed position. They now

increasingly operate in cross functional teams on business processes, are more involved in decision making and participate in integrating financial and non-financial information on operational and strategic levels.

Scapens and Jazayeri (2003) described these changing working environments and

urged for new theory-building on this area. They studied the implementation of ERP from

the angle how management accounting changes. They specifically found a changing role of management accountants. After implementing ERP they found that (i) routine jobs were eliminated, (ii) line-managers had more accounting knowledge, (iii) more forward looking information was available and (iv) the management accountant fulfilled a wider role. It appeared that ERP enabled these changes. The changes as such were instigated prior to implementing ERP.

Eliminating routine jobs is a typical ERP feature. A single information database across all business functions re-using the same data without the requirement of double, triple (or more) entering the same data. This typical ERP feature has a direct impact on the number staff needed previously for executing the routine jobs.

Line-managers with accounting knowledge is not a direct consequence of

implementing ERP. In de case-study of Scapens and Jazayeri (2003) line-managers already were taking more responsibility for the financial aspects of their activities. This renewed attitude was the driver for building up accounting knowledge. The ERP system enabled this process with its features to efficiently dispatch accounting information to line-managers.

More forward-looking emphasis was noted in the use of management accounting information after implementing the ERP system. However ERP is not recognized as the

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driver for this change although it facilitates this emphasis. Other research noted the use of more forward-looking reporting without any linkage to ERP systems.

Resulting from eliminating routine jobs management accountants have more space to support the business managers. They found to be increasingly members of cross-functional management teams and taskforces. Some years later Byrne and Pierce (2007) have findings confirming this. They describe that the increased involvement of management accountants in the business appears to strengthen the effectiveness of management control, as the management accountants now have a better organizational understanding of reasons why control is required and how it best can be done. Through these interactions Management Accountants now are more knowledgeable of designing more efficient and effective control systems

2.5 Structuration Theory

The decision which objectives to pursue through an ERP implementation is not a simplistic calculation of costs and benefits or technical problem and solution. If it were, the decision could be explained from the functionalist paradigm seeking to provide essentially rational explanations, even to social phenomena, based on objectivism. The decision which objectives to pursue has its impact on people or even better, on a social system. Implementing an ERP system has effects on people in the organization in such a way that it effects both the costs and the benefits. An explanation from the perspective of the interpretive paradigm would therefore be preferred. The interpretive paradigm takes seriously the subjective meanings that people attach to things. This paradigm recognizes that the world can be viewed as socially constructed. The theory of Structuration (Giddens, 1984) can well be applied to the decision making process in ERP implementations.

Structuration is about reciprocal interaction of the people of an organization and an organization’s institutional properties. These institutional properties enable and constrain the human actors. The properties result in procedures and structures that human actors comply to. But at the same time these institutional properties are

constructed by these actors previously and continuously. The properties consist of the rules and resources that human agents use in their everyday interaction and they mediate their actions by it. At the same time they are reaffirmed through being used by human actors.

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The regularly repeating of actions of actors applying their knowledge and reflexivity will lead to patterns of interactions that become established as standardized practices in the actors’ organization. Typical examples are ways of manufacturing a product,

coordinating a meeting, or evaluating an employee. Over time, habitual use of such practices eventually becomes institutionalized, forming the structural properties of organizations.

Giddens’ Structuration theory (1984) brings along a tension between the positivistic and the interpretive approach. The positivistic aspect in Giddens’ structuration theory (1984) are the objective, structural features of organizations where agents draw upon expressing that social structures or models were taken to be beyond the realm of human control. The interpretive aspect is that subjective, knowledgeable actions of human agents recreates or reinforces the structural properties positing that action creates social structures. This tensioneous co-existence between the positivistic and interpretive approach in Structuration Theory is known as the Duality of Structure.

Structures are the "rules and resources" embedded in agents' memory traces. In performing social actions agents use their memory traces of which they are

"knowledgeable". Giddens (1984) distinguishes between discursive and practical knowledge. Discursive knowledge is the knowledge actors apply very consciously, which they are able to describe and identify fluently and coherently. Practical knowledge constitutes the highly automated knowledge actors apply tacitly not being able to

express what knowledge they are applying. In literature the spectrum between

discursive and practical knowledge is known as reflexivity. Giddens (1984, p. 5) notes “Reflexivity refers to the capacity of humans to routinely observe and understand what they are doing while they are doing it. It is not merely self-consciousness, but includes the continuous monitoring of physical and social contexts, and activities (their own and others)”. When high on reflexivity in the spectrum the actor’s knowledge is scaled as discursive knowledge. When low it’s scaled as practical knowledge. Human’s capacity to reflexivity is put to the test. Giddens (1979, P. 144) explains that “Actors' knowledge and reflexivity […] is always bounded to some extent by the situated nature of action, the difficulty of articulating tacit knowledge, unconscious sources of motivation, and unintended consequences of action. So the level of reflexivity, and thus how

knowledgeable an actor is, is the result of the actor’s capabilities and social context the actor is interacting in”.

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Giddens divides the knowledgeable memory traces into three types: Domination, Signification and Legitimation. These elements are fully interdependent but they have been distinct to be able to analyze them from the perspective of human agency and institutionalized properties.

Systems of Signification allow actors to communicate by applying interpretive schemes. In an organization a theme has a shared meaning. This shared semantical meaning (Structure) is developed and continuous to be developed through

communications (Interaction) of reasoning and arguments included in an actor’s interpretive scheme (Modality). The shared meaning as the institutional property can alter if the continuous social interactions by individuals lead to a deviating discourse. The interactions may also be reinforcive to the existing discourse.

Systems of Domination (Structure) allow actors to influence each other’s behavior through execution of Power (Interaction) by applying their authority over facilities such as rules and resources (Modality). Giddens distinguishes authoritative and allocative. Authoritative means an agent has authority over people. Allocative means an agent has authority over objects. These two types of power are not equally divided over the agents in the organization. That’s why structures of domination are existing. When disagreeing to institutionalized structures, agents can choose to act beyond the formal structures. The results of their informal acting however can be of the influence that the formal structure will be changed. This potentiality is referred to as the dialectic of control by Giddens (1984, p. 16). Roberts and Scapens (1985, p. 449) describe this

"transformative capacity" as the power of human action to transform the social and material world.

Systems of Legitimation (Structure) enable sanctioning (Interaction) by applying norms (Modality). Systems of legitimations are about the objectified appropriateness of behaviors. Through norms and sanctions social interaction is influenced. The realized social interaction influences the institutionalized view on appropriateness of behavior.

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Figure 2: The dimensions of duality of structure. Source: Giddens (1984)

Using Orlikowski’s model (1992) it can be explained that institutional properties influence the behavior of agents. In his model a new dimension to Giddens’ model (1984) has been added which is the use of Technology. Orlikowski (1992) managed to describe how the use of Technology is interacting with the institutional properties of Structuration Theory. He explains that implementing technology, in casu an ERP system, mediates human interaction and that technology conditions social practice, either way enabling or constraining it. Orlikowski (1992) explains based on Giddens’ Structuration Theory (Giddens, 1984) that humans are influenced by institutional

properties. In turn the institutional properties (signification, domination, and legitimation) can be either reinforced or transformed by human actors’ use of technology (figure 3). From Orlikowski’s model (1992) follows that configuring an ERP System that

Centralizes Control defines standardized working procedures and thus redefines Institutional properties and in this case constrains the flexibility of the organization.

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When configuring an ERP systems the configuration choices made by the human agents involved in this process are reflected in it with certain interpretive schemes (knowledge), certain facilities (processing functions), and certain norms (rules that define the organizationally sanctioned way of executing that work). When using the ERP system human agents appropriate it by assigning shared meanings to it, which influence their appropriation of the interpretive schemes, facilities, and norms designed into the technology, thus allowing those elements to influence their task execution.

At first the ERP technology conditions social practice either way enabling or

constraining it depending which side of the administrative paradox is pursued. Secondly the result of the use of Technology is being fed back by the behavior of the actors having used the Technology which on its turn influences the structural properties. A parallel is seen how results of the communicated message (semantic and signification), applied authority (domination and power) and the sanctions (legitimation and moral) influence the behavior of agents who in turn change or reinforce the structural properties.

2.6 Expected research findings based on literature

From Scapens and Jazayeri (2003) we expect the next four findings: (i) elimination of routine jobs, (ii) line-managers with more accounting knowledge, (iii) more forward looking information and (iv) the management accountant to fulfill a wider role in the organization. Via semi-structured interviews data is collected that explains acceptance or resistance to Centralization of Information. In the analysis if this theses Giddens’ structuration theory (1984) is put central to explain the findings of the semi-structured interviews. To structure the empirical results, this thesis uses Giddens’ modes of

mediation related to the three elements of the institutional properties; Semantics, Power and Legitimacy.

In the area of Semantics the expected finding of “elimination of routine jobs” fits in. In general efficiency improvement does. If actors interpret efficiency improvement to be a positive asset this a supportive force to implement the ERP system. If they don’t it is a source of resistance. The latter could occur if e.g. the actor fears to lose his job due to improved efficiency (De Jager, 1994).

In the area of Semantics also the expected finding of the management accountant to fulfill a wider role fits in. With the the management accountant communicating with a

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wide audience (s)he will be able to influence the opinion of this audience on themes related to the implementation of the ERP system. Because of his wider role the

management accountant now is better able to detect resistance and has the opportunity to alter it or at least mitigate it such that Centralization of Information can be fulfilled.

In the area of Power the expected finding of more forward looking information fits in. In general all centralization of information would. This will increase the transparency of the organization to top-management. The transparency redefines the level of

asymmetric information between the agent and the principal. Higher transparency means the agent can be more monitored. Thus top-management obtaining more power over the actors in their organization.

In the area of Legitimacy the discourse of behavior resulting from norms, rules and conventions determine whether support or rejection exists for Centralization of

Information. If legitimacy is aligned with top-management’s level of ambition regarding Centralization of Information, support is ensured. Scapens and Jazayeri (2003) in their case study find an increase of line-managers with accounting knowledge.

Line-managers taking more ownership of information based on accounting, influence the ERP configuration process such that data is maintained in a consistent and uniform way. With this they fulfill the pre-requisite of Centralization of Information.

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- 16 - 3 Development of the research question

3.1 Research Questions qualitatively approached

Management consultants are traditionally believed to be the executioners of defined management control (MacIntosh, 1985). The result of their involvement in implementing ERP systems should therefore level up to what management has targeted for in the area of

centralization of management control. Therefore an adherent answer is expected from a functionalistic approach that management accountants moderate ERP configurations towards management’s objectives.

From the structuration theory (Giddens, 1984) we learned that organizations are derived from a constitution of power allocation, rules and procedures and communication. And in this constitution organizations are at equilibrium at any time. People in the organization act accordingly to this equilibrium but are also the instigators of changing it. Individuals involved play their own specific role based on their background concerning their power of influencing others, their norms and values and their legitimation. The people involved in configuring the ERP system therefore are the determinants whether top-management’s objective of

Centralization of Information will be achieved or not. This research is aiming to discover the rationales that are supportive or a resistance to the objective of Centralization of Information. Therefore the first research question can be defined as:

Q1: Why do the actors of the defined business functions in the ERP project support or oppose against the management’s objective of Centralization of Information?

The actors representing the Business Functions, unfold their more or less successful

influence in the configuring process of the ERP implementation. The Management Accountant is expected to be able to use their adherent influence or mitigate their conflicting influence. The level of success of using or overcoming these influences will vary from one to the other. The second research question therefore can be defined as:

Q2: How is the Management Accountant dealing with the support or opposition of the involved actors representing the business functions?

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3.2 Research Questions quantitatively approached

Getting more in control of ones’ organization starts with knowing the facts in and around business. ERP and Management Accountants play a central role in this. The communication capabilities of ERP enable top-management to know the facts of their business. Management Accountants’ interaction with operations have increased past decades. Byrne and Pierce (2007) found that higher interaction leads to better organizational knowledge which leads to more capabilities to define improved management control systems. From Orlikowski’s model (1992) based on Giddens’ (1984) structuration theory we learn that people defining technology, or in this case configuring an ERP system, are of influence to institutional properties. Therefore it is expected that the involvement of the management accountant in and through an ERP

implementation moderates the level of Centralization of Information. Hence the following research questions can be defined:

Q3: Is the level of configuring ERP towards Centralization of Information moderated by the level of involvement of the management accountant in the ERP implementation project?

This research question involves three constructs whose values have meaning to be able to define an answer. Therefore three prior research questions are defined.

Q3a: To what level of Centralization of Information is the ERP system configured? Q3b: What level of Centralization of Information was the objective of top-management? Q3c: What is the level of management accountant’s involvement in the ERP project?

The constructs will be measured through a newly developed seven-point score-table. It is expected that higher scores on management accountant involvement are accompanied by higher scores on ERP functionalities regarding Centralization of Information.

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- 18 - 4 Methodology

4.1 Qualitative and Quantitative approach

The goal of this research is to get a better understanding and in-depth insight as to whether and how the management accountant in the ERP project influences the implemented

functionality towards an increased level of Centralization of Information.

For answering whether the management accountant moderates the ERP implementation a quantitative method is used. Using a newly developed score-table the implemented functionality is measured on the quantitative magnitude of activation of the typical “Centralization of

Information” functionalities at the interviewees’ organization. Next, the ERP Objectives on Centralization of Information is measured via a second score-table. The two average scores are expected to be within a standard deviation. Both questionnaires address the business functions as defined by Shi and Halpin (2003).

For improving comparability some business functions are clustered. The interviewees are SME-based and therefore the level of segregating the business functions are not as detailed as Shi and Halpin (2003) describe. For each of the cluster of business functions typical

functionalities expressing Centralization of Information have been determined. Using a 7-point-scale, the interviewees value the function contributing to the level of Centralization. The clusters and questions are aimed to be having equal weighings when calculating the overall result of centralization.

For answering how the management accountant moderates the ERP implementation an in-depth understanding is required. The research for this part follows a qualitative approach by doing semi-structured interviews. The interviews are aimed at getting insight on:

- How are Management Accountants involved in the ERP project?

- What according to Management Accountants would be the reasons for the deviations between de intended and realized objectives on Centralization of Information?

- Which elements of support or resistance of the actors representing the business functions contributed to the deviation of management’s objectives on Centralization?

- How did the management accountant respond to these contributions?

The interviews were consented by the interviewees to be recorded and have been transcripted. The transcriptions are anonymized. From the transcriptions paraphrases were coded and classified. The classifications were developed in the process of sequentially analyzing the transcriptions. From the classification of each individual interviewed company a

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summary conclusion is made. Based on all interviews’ codings and classification overall findings were described.

4.2 Organization & Interviewees

Four divisions of four different holding-companies have been interviewed. Company A is a Construction company in the area of Housing and Utility Construction, Industrial

Construction and Property development. Company B is a technical company delivering

the construction of pipelines for the transportation and distribution of oil, gas, water, electricity and data. Company C develops, constructs and manages infrastructure projects e.g. roads and bridges. Company D is also active in infrastructure projects, but as a technical solutions provider in the fields of electrical and mechanical solutions.

The commonality of these four companies is that they are a division of a larger company. This division consist of multiple working companies. On the division level objectives on Centralization of Information have been defined. The ERP

implementations were done in the working companies.

Figure 4 : Company structure

Holding Division Division Division Working Company Working Company Working Company Working Company Working Company Working Company Working Company

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At each company the management accountant was interviewed. This interview was semi-structured and intended to gain in-depth insight in the pre-defined objectives of Centralization of Information and the perceived realization of it after the implementation of ERP. Additionally a pre-defined scorecard was asked to fill out to measure the level of Centralization of Information through the configured “typical” “Centralization

functionality” of the ERP system. For each business function six typical functions were selected and the interviewee was asked to rate the usage of each of the described functionality using a 7-point-Scale.

The management consultant was also asked what his/her involvement in determining the objectives of the ERP project were, what his/her involvement and participation in the ERP working groups were and what his/her influence was on the final configuration of the ERP system.

Additionally interviews were held with representatives of the Business Functions. The same questions asked to the management Accountant were also asked to them, however only focused on their own Business Function. As SME companies are the targeted audience, in some cases Business Functions were combined in one representative.

Each company was visited two times for interviews. In the first round of interviews the Management Accountant was interviewed in an approximately two-hours-session. In the second interview round the business function representatives were interviewed.

To ensure that the interviewing results are comparable between the interviewed companies the interviewed companies are controlled for Industry, Size, Company structure and Technology.

All interviews are held at companies active in the Construction Industry or closely related to it. Typical Construction Industry will built houses or offices. Industries related deliver specialized products and services to the the construction sites such as

mechanical engineering, electrical installations and IT infrastructure. The interviewed companies are Dutch based SME companies listed in the Top-50 largest construction companies or installation companies in The Netherlands. The companies have a

centralized top-management with decentralized operations. The operations typically are located in a different geographical area. They all have implemented a state-of-the-art

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best-practice ERP business platform of Microsoft Business Solution NAV. This ERP product is implemented not more than five years ago.

Company Interviewee Function Duration

interview

Company I Mr. V Management Accountant 1h07min

Company I Mr. J &

Mrs. R

Managing Director working company Project Administration

1h30min

Company II Mr. V Management Accountant 1h45min

Company II Mr. R Manager Projects 0h30min

Company II Mr. R Senior Purchase 0h30min

Company II Mr. B Manager Finance 0h40min

Company III Mr. G & Mr. S Management Accountants 1h13min

Company IV Mr. D Management Accountant 1h30min

Company IV Mr. C Manager Finance 1h44min

Table 1: Overview of the interviewees

4.3 Quantitative support - Measuring the proxies

To understand whether the objectives on Centralization defined prior to the start of the implementation of the ERP system were realized during the interview the

interviewed Management Accountant was asked to fill out four score-tables. One for the level of centralization as targeted. A second score-table for the realized level of

centralization. A third third score-table measuring the level of centralization of Information as configured in the ERP system. And finally a fourth measuring the involvement of the management accountants in the implementation of ERP.

Measuring senior managements’ objective on Centralization of Information is done using a 7-point-scale score-table. The interviewed Management Accountant is asked to give a score to each of the business functions as defined by Shi and Halpin (2003). Another score-table is made for the realized objectives. In the appendix it is explained when to apply which score.

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4.3.1 Proxies measuring the Centralization of Information through ERP functions Measuring the level of centralization of ERP is done through measuring whether typical Centralization functions are configured. For each business function six typical features are listed expressing Centralization of Information. On each of the listed features the interviewed Management Accountant will give a score to what extent the feature supports Centralization of Information in his/her organization. The average score of all features on all business function will be calculated for each interviewed company.

4.3.2 Proxies measuring the involvement of the Management Accountant Measuring the involvement of the Management Accountant in configuring the ERP system will be done by measuring which activities are carried out by the management accountants during the ERP implementation. Five specific roles are defined and each role will be scored on a seven-point scale. The average score will be used for analysis. In the appendix it is explained explained when to apply which score on which roles.

4.4 Interviews on rationales for (not) supporting Centralization of Information The interviews targeted at getting in-depth insight as to why centralization of

Information is or isn’t supported, will be done with those involved in configuring the ERP system. The interviews will be loosely structured trying to discover from each

interviewee which changes affect him/her and whether and why the change is or isn’t supported actively or passively during the implementation phase. The interviews will be recorded, transcripted and coded for analysis.

4.5 Analyzing the constructs 4.5.1 Qualitative

To answer research questions two and three, the interview’s paraphrases will be coded and clustered in sections. Giddens’ (1984) Structuration Theory is used to bring structure and understanding of the empirics. It enables to critically analyze how social interaction influences institutional properties that guides the behavior of individuals in the the ERP implementation process. This is researched by identifying the modes of

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mediation that actors help to transfer interaction and structure in social systems. The paraphrases clustered in sections relate to one of the modes of mediation.

At first the analysis is done for each individual interview, then it is aggregated to the level of interviewed company and finally it is aggregated to thesis level. The analysis has the objective to determine the weighing of support and resistance per mode of mediation. Therefore for each interview and for each of the three modes of mediation the analysis results in a three-point-scale weighing of resistance and a three-point-scale weighing of support. The more reasoning for support or resistance is found in the

interviews related to a specific clusters and thus to its related a mode of mediation, the more weight will be allocated to it. The total weighing of support is compared to the total weighing of resistance. A summary conclusion gives explanation to the result of the ERP project on Centralization of Information. If in total the weighings lead to Supporting the ERP project I expect a high level of Centralization of Information. Weighings leading to resistance are expected to be associated with a low realized level of Centralizat ion of Information.

4.5.2 Quantitative

The score-tables give the information on the relative height of Centralization of Information. The data will provide information on the exceedance or undershoot of the realized level of Centralization compared to its objective. It also enables to compare the level of Centralization between the interviewed companies. However the main value of the quantitative analysis in this thesis is its triangulation capability. Exceedance on the objective and a high score on Centralization is expected to relate to high weighings on supportive modes of mediations. Undershoot and low scores are expected to relate to high weighings on resistance.

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- 24 - 5 Results

The results will be presented from a quantitative and a qualitative perspective. The first two paragraphs describe the measured (i) realized objectives and (ii) clusters of resistance. The measuring was done using the score-table and questionnaire as

described in Appendix I part A and B. During the interviews the score-table was filled in by the interviewed management accountant. The score-table aimed to register the level of implemented ERP functions that relate to Centralization of Information. The

questionnaire aimed to triangulate the score-list by asking a direct overall score of pre-ERP Centralization, realized Centralization and future Centralization Objectives.

In the following paragraph the clusters of realized objectives and resistance is described. Also described is how the found clusters relate to the systems of Giddens’ structuration theory.

The remaining paragraphs of this chapter describe the qualitative results for each interviewed company. The qualitative findings will be described along three dimensions: (i) per company, (ii) From the two perspectives of the Management Accountant and Construction-Site actors and (iii) according to Giddens’ systems of Domination,

Signification and Legitimation. For each of the four interviewed companies the findings will be explained from two different perspectives. The first one is from the perspective of the actors closely related to the Management Accountant. In all four interviewed

companies the Management Accountant is also the Manager of all administrative personnel. Because of these direct reporting lines, the view of the Management

Accountant’s direct reports on social actions is not expected to deviate from the view of the Management Accountant himself. This group will be referred to as “Management Accountant”. The second perspective is from all the other actors. These actors have a distance to the Management Accountant and it is expected that they will have a different view on social actions. The other actors partly work in the office and partly work on Construction Sites. Those working at the office are the Business Functions (i) Project Preparation, (ii) Project Procurement and (iii) Project Administration. Those working on Construction Sites are: (i) Projectmanagers and (ii) Project Supervisors. The second group will further be referred to as “The Others”.

Explanation is simultaneously done using Giddens’ Structuration Theory. In the systems of Domination, allocative power directs personnel to use the new ERP system.

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The management accountant played a significant role in defining the directives how personnel is to use the ERP system. In the process of institutionalizing its usage may lead to resistance at its users. In the critical episode following social actions influenced the newly set directives. For each company a specific paragraph will describe the role of the Management Accounting initiating the new directives. Followed by a paragraph in which I describe the social actions of all actors and whether it contributed to acceptance or resistance of the new ERP system. In the systems of Signification I will explain how actors can be influenced. I will explain how they develop a discourse towards the new ERP system formulating supporting arguments or resistance arguments. Management Accountants play an important role here. Byrne and Pierce (2007) found that the

increased involvement of management accountants in the business have led to a better organizational understanding. Therefore management accountants today are very capable of interacting with other actors of the ERP project. Through these interactions Management Accountants are able to influence the discussion regarding the

configuration of the new ERP system. This is an important mode of mediation because the aggregation of Configuration-choices determine the level of realized Centralization of Information. In systems of legitimation existing norms, patterns and rules are

expected to be adhered to. Also in the context of implementing a new ERP system, top-management can impose norms, patterns and rules here. In this section I will elaborate on each company which underlying arguments are at present to adhere to or oppose against the norms, patterns and rules. And whether they contribute to acceptance or resistance of the new ERP system.

5.1 Realization of management’s ERP objectives

The checklist (see appendix I) serving the score-table was developed prior to the interviews. It consists of seven sub-parts; for each business function one. Per business function six typical ERP functions were listed a company will implement to some extent if they choose to increase the Centralization of Information. The scores per feature range from 1 till 7. Each function is equally weighed. After the list was filled in, an average score was calculated. In below table 1 on the first data-line, the average score on Implemented ERP functions related to Centralization of Information is listed per company.

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- 26 - Company I Company II Company III Company IV Q3a Centralization based on implemented functions 5,14 4,79 4,79 4,00 Q3b Centralization after ERP as estimated by the MA 5,00 5,00 5,25 4,00 Delta Implemented Functions vs Estimate 0,14 -0,21 -0,46 0,00

Table 2 Comparing MA’s impression of realization of Centralization with the results of the score-card

Separate from the checklist of typical Centralization functions the management accountant was asked to give three overall scores per business function on a scale form 1 till 7 (see appendix I part B). One for the level of Centralization of Information

immediately before the start of the ERP implementation. And one after the

implementation of ERP. And finally a score reflecting the level of Centralization the company strives for. These scores are listed in table 2. Per company an average value is calculated of the given scores. These averages on the level of Centralization after the implementation are compared to the calculated average scores based on implemented functions. This is done for triangulation purposes. The delta between the two average scores are within a small bandwidth of less than 0.5 points.

The central theme of this thesis is to research the influence a management accountant has on the realization of the objective of Centralization through an ERP implementation. From the semi-structured interviews rich data is obtained. The score-tables result in additional information that can be used to triangulate the findings. It is expected that a higher (lower) involvement of the management accountant in the ERP project is in conjunction with a higher (lower) score on the realized level of

Centralization after the ERP project. This is reflected in the bottom row of table 2. Company I Company II Company III Company IV

Pre-ERP Level of Centralization 2,71 2,50 3,00 3,20

Q3a Realized level of Centralization 5,14 4,79 4,79 4,00

Q3b Management’s objective 5,86 5,70 6,25 6,60

Delta Objectives vs Realization 0,72 -0,81 -1,46 -2,60

Q3c Involvement of management acc. 6,33 5,90 6,60 2,90

Comment high involvement

high realization high involvement high realization high involvement low realization low involvement low realization Table 3. Delta to Centralization Objective versus Management Accountant involvement in ERP Project

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The proxies of Companies I, II and IV seem to be corresponding with the expectation that the higher the involvement of the Management Accountants is, the more

management’s objectives on Centralization will be fulfilled. Company III seems to deviate from the expectation. It has high involvement of the management accountant and yet is has a relative low score on the realized objectives. From the semi-structured interviews it is expected to find explanations for this deviation.

From the interviews it results that an increased Centralization of Information has been achieved by focusing on mentioned clustered objectives (table 3).

Systems of Clusters of Realized Objectives Company I Company II Company III Company IV All

Domination (1) Homogeneous interpretation of information 2 6 6 5 19 Domination (2) Centralization of masterdata 3 1 2 3 9 Signification (3) Specific reporting supportive to

management

7 3 9 5 24

Signification (4) Timeliness 5 2 3 - 10

Domination (5) Accuracy & Completeness 3 3 3 5 14 Signification (6) Efficiency in transferring information from

A to B

1 7 3 1 12

Domination (7) IT Technical 0 1 2 1 4

Table 4: Interviewresults on instances on types of ERP Objectives per Company

Most frequent focus of the interviewed companies is laid on “Homogeneous interpretation of information” and “Specific reporting supportive to management”. The homogeneous interpretation is defined as the required uniform use of masterdata and required uniform execution of operational processes. This also is also the pre-condition for uniform and comparative reporting to top-management. The objectives mentioned in the interview underline that Centralization of Information is an important objective when implementing an ERP system.

5.2 Clusters of support and resistance to implementing ERP

The objectives of the ERP project as such can be interpreted both supportive and resistant by the actors of the organization. I will explain this per mode of mediation after I have explained which defined cluster of objectives (from table 3) is related to which mode of mediation.

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- 28 - 5.2.1 Signification

Interpretive schemes relate to the objectives-clusters (3) Specific reporting supportive for management, (6) Efficiency and (4) Timeliness. The communicated objectives are translated into a meaning by the business functions in the organization. Management Reporting and Efficiency are more eligible for interpretation than the other objectives. Different actors may define as many different meanings on these constructs. On the defined objectives of efficiency and timeliness the interviewees responded differently. In most cases supportive interpretation occurred when interviewees emphasized the necessity for their company to lower the costs of operations. Resistance interpretations were primarily given by interviewees who believed that measures taken surely would not lead to efficiency or even deteriorate it. All

interviewees responded to support the objective to improve their management reporting capabilities.

The semantics structure being mediated by the interpretive schemes can be

described as communicating which meanings they relate to social events justifying their way of interacting to it. The objectives of implementing the new ERP system can be valued very differently. In the interviews two specific values were mentioned which are classified as resistance; loosing flexibility/freedom and pain but no gain. The latter meaning that the actor was expected to additional labor which did not directly result in any benefit to him/her. The aspect of losing flexibility/freedom is related to the

administrative paradox where flexibility is traded out against stability. Now interpreted as resistance because the interviewees did not agree.

5.2.2 Domination

Facilities relate to the objectives-clusters (1) Homogeneous interpretation of information, (2) Centralization of masterdata, (5) Accuracy & Completeness and (7) IT Technical. These clusters typically facilitate the actors in their operations once using the new ERP system and therefore they are related to the mode “Facilities”. The expected empowerment of the ERP system to the actors appeared to be a stimulator to be supportive to the ERP project. However during the ERP project the magnitude of supportiveness continued to be flawed when the actors experienced shortcomings on the expected results of the ERP system.

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The power structure being mediated by the facilities can be described as the resources and rules an individual can refer to when executing authority over and between social actors. Any unsatisfactory outcome may lead to behavior expressing resistance. Therefor the found clusters of resistance related to the Power structure are (i) Rules on timely executing tasks, (ii) the ERP system as a resource to perform tasks and (iii) knowledge as a resource to perform tasks on the new ERP system. In the interviews unsatisfactory outcome was given, thus providing data on resistance to the new ERP project.

5.2.3 Legitimation

The legitimation structure is being mediated by norms is about the objectified

appropriateness of behaviors being institutionalized. In the ERP project these norms are newly imposed. New behavior is expected from the organization’s actors. From the interviews appears that part of the actors oppose. Business Functions that operate from construction-sites resist fiercely to the new ERP system. They legitimize this by stating that their value to the organization is directly related to their primary task of supervising or managing the project. This involves presence on the construction site and a resent to be at the office. However being more at the office is required as “new behavior” to participate in the newly defined data-processing procedures. Hence the high score on resistance related to “Staying in the comfort-zone” is given by Construction-site

business functions. Furthermore from the interviews it appears to be the norm that non-office personnel should not contribute to maintain administrative data thus explaining the resistance of these actors to the implementation of the new ERP system.

Systems of Clusters of Resistance Company I Company II Company III Company IV All

Legitimation (A) Staying in the comfort-zone 2 2 3 6 21 Semantics (B) Losing flexibility / freedom 1 1 1 - 3 Domination (C) Being chased to deliver timely 1 - - - 1 Legitimation (D) Non-Initiative on knowledge

transfer

5 2 - - 7

Domination (E) Low trust in performance of system

3 2 1 2 8

Domination (F) Lack of Skills - 3 - 6 9

Semantics (G) Pain but no Gain - 5 1 - 6