The Influence of Technology-Organization-Environment (TOE) Framework on Firm Performance with ERP Cycle Implementation

Abstract

This research extended the implications of the TOE Framework by examining the relationship between the TOE Framework and firm performance, focusing on the mediating effect of ERP adoption, ERP implementation, and ERP assimilation. The purpose of this study was to determine relationships within the TOE Framework: 1) the technological context, 2) the organizational context, and 3) the environmental context, regarding firm performance with the mediating role of ERP adoption, ERP implementation, and ERP assimilation. The survey was conducted in manufacturing industries in Thailand. The participants were selected from a list provided by the Department of Business Development, Ministry of Commerce. Structure Equation Modeling (SEM) was used as the statistical instrument to tabulate the results measuring the relationships between the above mentioned variables. The results revealed that the technological context, the organizational context, and the environmental context had an impact on firm performance with ERP implementation and ERP assimilation. The further analysis of the data indicated a positive relationship between the TOE Framework and firm performance with ERP implementation and ERP assimilation. Therefore, the efficient use of the ERP system could be the most important key business driver. The ERP system played a critical role in improving firm performance. However, top managers had to understand how to implement the ERP system in their organizations as the success of the company depended on the level of ERP implementation. It was affirmed that the effective implementation of the ERP system could increase profitability and market share. Moreover, the organizations should be aware of the role of the ERP system in their success.