The Impact of Mutual Monitoring and Enterprise System Integration on the Empowerment of Managers

Introduction

Enterprise systems, such as enterprise resource planning systems and enterprise application integration systems, dominate the information technology utilized in large organizations. These systems span across an organization’s various business units, functions, and geographic regions to provide enterprise level information. Due to their ability to decrease cycle times and improve customer service at reduced operating costs, many firms implement enterprise systems to remain competitive (Rikhardsson & Kraemmergaard, 2006). Enterprise system implementations have been reported to have drastic impacts on business, motivating large numbers of case studies and event studies on their implementation (e.g. Rikhardsson & Kraemmergaard, 2006; Quattrone & Hopper, 2005; Poston & Grabski, 2001; Nicolaou, 2004). However, there are few generalizable studies on the behavioral impacts that enterprise systems have upon managerial control (Arnold, 2006; Chapman & Kihn, 2009; Sardo, 2018).

Empowerment represents the amount of perceived influence an employee has over organizational outcomes as well as their confidence to perform their job effectively. Chapman and Kihn (2009) find that enterprise system integration develops more enabling controls that should empower an organization’s employees. However, research also reports that enterprise system integration can empower some organizational members, while limiting others (Sia, Tang, Soh, & Boh, 2002; Elmes, Strong, & Volkoff, 2005). Because empowerment is associated with both job satisfaction and performance (Seibert, Silver, & Randolph, 2004; Hall, 2008), the potential for enterprise systems to empower middle managers offers a practical, and mutually beneficial, outcome for both organizations and employees.

Mary Parker Follett emphasized the roles of cooperation and power sharing in developing her theory of management control (Follett & Graham, 1995; Gibson & Deem, 2016). Using the facets of Follet’s theoretical lens, this study examines the empowering capabilities of enterprise system integration. Specifically, the ability of integrated enterprise systems to facilitate the development of a group identity among peer managers directly, as well as indirectly, through the process of mutual monitoring (Lee & Lee, 2000; Towry, 2003) is examined. Furthermore, this study also examines whether social identification with peer managers increases managers’ empowerment cognitions (Follett & Graham, 1995; Sluss & Ashforth, 2008; Randolph, 1995).

Empowerment in this study refers to one component of psychological empowerment; impact (Spreitzer, 1995). Impact is defined as the amount of perceived influence over organizational outcomes. Data to test the theoretical relationships are derived from a field survey administered to 206 managerial level respondents representing a variety of industries. Relevant constructs of interest are adapted from previously validated measures, and include enterprise systems integration, social identification, mutual monitoring, and empowerment. All constructs are tested using structural equation modeling.

Findings presented in this study suggest that enterprise systems empower middle managers. Significant positive associations are found between enterprise system integration and, both, mutual monitoring and social identification among peer managers. Social identification is found to drive the construct of impact, and thus promotes empowerment.