Managing Enterprise Information Systems Compliance – A Social and Performance Management Context Perspective

Project: Research

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Description

In today's hyper-competitive and turbulent environment, firms must strengthen operational agility in order to successfully respond to rapid changes in the environment. Enterprise information systems (EIS) is seen as valuable in enabling operational agility; yet, this value can only be realized when EIS is properly utilized as intended by the system designer, an issue termed as EIS compliance in the literature [49]. Indeed, EIS compliance is necessary for successful integration of EIS into business practices, a process instrumental for enhancing the ability of the firm to rapidly implement and stabilize evolving operations in response to market changes and opportunities [81]. However, compliance is challenging. Employees may be unwilling or unable to conform, either because they see no personal benefit in doing so or they do not know how to properly use the systems [50, 88]. This challenge is more prominent in contemporary dynamic environments, because compliance rules and policies can shift as the EIS evolves to respond to environmental change. Thus, it is imperative for firms to find solutions that promote EIS compliance [52]. The previous literature has mainly explained user EIS compliance from two perspectives: reward/punishment (sanctions) based on control, relational choice and general deterrence theories [12, 17, 51, 88], and policy education, training, and awareness (ETA) programs [20]. While this research offers great insights, the formal interventions described raise new concerns. First, reward and punishment have been found to have mixed effects on compliance [20, 68, 79, 88]. It is reasoned that formal and direct approaches to incentivize EIS compliance could also demotivate employees by undermining their morale and encouraging them to be more selfish [80]. Second, although training is a formal knowledge transfer approach that is useful for overcoming knowledge barriers associated with the proper use of EIS, the periodical and post-hoc nature of training fail to engage users as knowledgeable agents in the system design process [7], nor respond to system changes resulting from evolving business needs. Given these research gaps, our broad research objective is to understand what a company should do to motivate and enable EIS compliance, not by imposing a controlling environment with formal and obtrusive managerial interventions as the literature posits, but through alternative means, such as cultivating a motivating atmosphere that recognize users as knowledge agents and fosters a more conducive mechanism for EIS compliance. We believe that the organizational context perspective, which is an IS-novel approach drawn from the management literature, is an appropriate way of exploring our research question. Organizational context, involving both “soft elements” of social context and “hard elements” of performance management context, is the systems, processes, and beliefs that build an effective work ethic by inspiring high morale within the organization [35, 74][pp.213]. A proper organizational context is known to promote collective cooperative actions by the constituting units towards achieving the firm’s aims by strengthening employee morale [31, 48].  This said, while the organizational context perspective has been studied in other research fields, it has not been extended to the IS domain. Different from what is known in other areas, EIS compliance is a specific cooperative behavior that requires users to understand and accept both the business and the IT aspects of EIS. Thus, it is not clear whether and through what mechanisms organizational context can foster EIS compliance. This motivates us to address the research question:to what extent and how does organizational context affect EIS compliance of the functional units of firms operating in a dynamic business context? To respond to this research question, we extend the organizational context literature by integrating social capital theory to posit that organizational context promotes EIS compliance of a functional unit by strengthening social capital between the functional unit and the IT unit. Social capital theory highlights the social and relational value of human interactions. In contrast to generally cooperative behavior that needs only one party to accept the other party’s arrangements, we treat EIS compliance as resulting from a value co-creation process between business and IT, one that involves functional users in designing (i.e., IT initiatives) and implementing EIS (e.g., operation procedures, guidelines, rules, and standards) in order to sense changes in business practices and requirements. We argue that social capital between functional and IT unit is an informal mechanism that plays a key role in inducing EIS compliance of the functional unit via exchange and combination of knowledge. This study intends to contribute to the EIS compliance, organizational context, and social capital literatures.First, we contribute by introducing the novel organizational context perspective in explaining EIS compliance [80]. Second, we highlight the role of an informal mechanism (i.e., social capital) in promoting EIS compliance [81]. Third, we extend the organizational context literature to the EIS compliance context by revealing how the social and performance management contexts jointly influence the EIS compliance of functional units. Our work extends the original literature by clarifying whether and how one context could complement or substitute for the effect of the other [36, 65]. Finally, we contribute to the social capital literature by proposing organizational context as a contributing factor to social capital. 

Detail(s)

Project number9042712
Grant typeGRF
StatusFinished
Effective start/end date1/01/1931/08/21