Socio-Technical Approach, Decision-Making Environment, and Sustainable Performance: Role of ERP Systems

Abstract

Aim/Purpose: This explanatory study aimed to determine the mediating role of ERP in the relation between the effect of a socio-technical approach and decision-making environment, and firms’ sustainable performance. Background: Although earlier studies have discussed the critical success factors of the failure or success of an ERP system and the extent to which it achieves its desired objectives, the current study focused on the significant impact of socio-technical elements and decision-making environment on the success of the ERP system (i.e., sustainable performance). In addition, the lack of research on ERP as a mediator in the above relationship motivated this study to bridge the literature gap. Methodology: The data was collected using questionnaires distributed to 233 randomly selected employees of three multinational companies (BP, LUKOIL, and Eni) operating in Iraq. The structural equation modeling was employed to test the hypothesized relationships. Contribution: The study contributes to the literature by examining the mediating role of the ERP system in the relationship between socio-technical elements and the decision-making environment, as well as, the moderating role of organizational culture in the relationship between socio-technical elements and ERP systems. Findings: The results showed that ERP is a significant mediator between the linkage of socio-technical elements and the decision-making environment while organizational culture has an insignificant moderating role in the relationship between socio-technical elements and ERP systems. Recommendations for Practitioners: In a developing country like Iraq, there is a need to implement ERP to achieve better sustainable performance through change management and organizational development that ultimately work towards enhancing individual capabilities, knowledge, and training. Recommendation for Researchers: The researchers are recommended to conduct an in-depth study of the phenomenon based on theoretical and empirical grounds, particularly in light of the relationship of socio-technical elements and decision-making environments. Impact on Society: This study provides a reference for organizations with similar cultural backgrounds in using ERP systems to minimize pollution in Iraqi context. Future Research: A more in-depth study can be performed using a bigger sample, which not only includes the oil industry but also the other industries.