Impact of absorptive capacity and dominant logic on ERP assimilation in Chinese firms

Abstract

Firms belong to social communities that are experts in creation of new knowledge from environment. Knowledge that is generated from past experience and from environment can affect firm’s process positively. Processing knowledge assimilation in a better way, strong leadership abilities are needed. That can recognize knowledge from environment in the sense of opportunities and threats. In this article, we discuss the effect of absorptive capacity (ACAP) and dominant logic (DL) on enterprise resource planning (ERP). Dynamic capabilities (DC) of top managers to absorb the knowledge from the environment and assimilate it according to their needs that improve firm’s enterprise resource planning (ERP). Our main focus in this article is knowledge and how top-level managers routine that knowledge to get the future benefits for their respective firms. The model was adopted from past literature that shows the effect of absorptive capacity its subsets and dominant logic and its dimensions on ERP assimilation. For this study we examined the Chinese firms located in Hefei city (Anhui province) China. Hefei is one of the fastest developing and emerging economic hub in China. Employees from top level are the target group in this study. The results prove our hypotheses that absorptive capacity and dominant logic have a positive influence on ERP in Chinese firms, that not only increases the productivity and performance of the firm, but also helps in the allocation of resources and decision making processes to stand in the dynamic market and oppose any kind of threats. Our results showed positive correlation between all the variables.