This chapter introduces the background, purpose of the study, and research questions of this study. The background focuses on describing the current business situation and the changing human resource practices due to the technology adoption, and interprets the finding of problem which is worth researching. The purpose of this study describes the significance of this study, and research questions of the study are addressed. Lastly, key terms are defined.
Background of the Study
The rapid development and change of information technology (IT) has been influencing the way organizations are managed. The information revolution was seen as one of the prominent features in 21st century and leads to the extensive application of IT innovation in business (Panayotopoulou, Vakola, & Galanaki, 2007).
The IT application also influenced the human resource department as well (Mishra &
Akem, 2010). Lengnick-Hall and Mortiz (2003) suggested that information technology had a great impact on HR functions and gave HR professional enough time and capability to think strategically through the use of electronic or web-based human resource management system (e-HR) to facilitate organizational strategy.
With the increasing emphasis on human resource in companies, the human resource department was urged to perform additional roles and yield better financial performance.
Meanwhile, the information technology had been cited as one of the dominant driving forces that changed HR’s role from personnel administrator to strategic partner (Bell, Lee, & Yeung, 2006; Huub, Tanya, & Jan Kees, 2004). To satisfy every aspect of organization needs, the importance of electronic human resource information system adoption was mentioned to assist human resource professionals in fulfilling organizations’ strategic goals, for instance,
2
company reputation, goal alignment, and cost reductions (Panayotopoulou, et al., 2007).
Later, some studies focused on the antecedents and consequences of adopting e-HR to figure out the premises and possible benefits of e-HR adoption with e-HR treated as a new technology to many companies. The adoption was discussed from individual context to organizational even national context. For instance, the technology-organization-environment framework was applied for discussing the process of a company adopting and implementing innovation technology (Tornatzky & Fleisher, 1990). In technological context, the IT infrastructure and supports were widely applied to detect the adoption of new technology.
Meanwhile, the top management support in organizational context and perceived competitive tension in environmental context were also viewed as other important forces to implement innovation technology in a company. Moreover, general factors like company size and industry sector in national context, or contextual factors such as economic development had been used as the predictors to test the e-HR adoption (Strohmeier & Kabst, 2009).
With more and more adoptions of e-HR, it was known that e-HR information systems can function at the organizational and the individual levels, and thus may also cause some dysfunctional outcomes for both levels (Stone, Stone-Romero, & Lukaszewski, 2006).
Recently, many organizations sensed the benefits from adopting e-HR, and attempted to use e-HR systems for the advantages of decreasing HR personnel (Lengnick-Hall & Moritz, 2003) and cost reduction (Panayotopoulou, et al., 2007). Therefore, more and more scholars advocated that organizations should take adoption of e-HR into consideration (Panayotopoulou, et al., 2007; Strohmeier & Kabst, 2009).
According to the above discussion, technology indeed changes how companies run their business and makes leaders face the challenge of emerging advanced technology tools.
However, without leader’s awareness and foreseeable benefits after huge investments on the technology adoption, the e-HR systems could not be realized. Therefore, it is a pivotal issue
3
to understand the antecedents and consequences of the e-HR systems. In order to achieve positive outcomes, it is necessary to strengthen the key success factors of adopting innovation technology. Furthermore, HR professionals and top management leaders should recognize the significance to embrace new technology.
Problem Statement
E-HR was defined as the application of information technology in building network and supporting HR department to perform at least two actors (Strohmeier, 2007) or referred to the use of internet along with other technologies to conduct human resource management transactions (Lengnick-Hall & Moritz, 2003). These definitions pointed out the core concept of e-HR which includes human resource and information technology. Thus there has been an increasing interest in understanding the factor of adoption among HR and IT academics.
It has been shown that firms adopt e-HR to a varying degree (Mishra & Akman, 2010;
Panayotopoulou et al., 2007; Strohmeier & Kabst, 2009) and yielded different consequences.
Operational consequence was one of the common topics in current research, the efficiency and effectiveness related to macro-level consequences of e-HRM was included. However, Strohmeier (2007) pointed out that findings regarding the efficiency and effectiveness of e-HRM are limited and mixed. Although the automation of routine activities provided some help for productivity, it was still difficult to measure and balance the overall gains and losses of efficiency.
In spite of many theoretical foundations on the technological influenced on HRM, few empirical studies were conducted to link the antecedents and consequences of e-HR adoption.
In addition, those empirical researches were conducted in the Western world. Some scholars thus raised the cultural difference issues of e-HR like other HR activities (Strohmeier &
Kabst, 2009).
4
With the trend of globalization, research on e-HR system in Taiwan is critical, becuase Taiwan is a non-western country that is famous for its high-tech and IT capability. Therefore, it generates the necessity to examine the antecedents and consequences of e-HR adoption empirically in Taiwan.
Research Purpose
Previous literature posited that the factors of e-HR adoption were rather scattered and inconsistent (Strohmeier & Kabst, 2009), and past research rarely investigated the consequences of e-HR adoption. In order to provide more empirical evidence in our knowledge, this study applies the technology-organization-environment framework (TOE framework) to investigate technology adoption and possible organizational consequences in Taiwan. This study adopts an organizational approach to examine possible association in organization level.
Thus, the purpose of this research is to delineate the relationship of selected antecedents and organizational outcomes of e-HR adoption in Taiwan. In addition, this research also attempts to benchmark knowledge for companies which already adopted e-HR systems or companies which still try to decide whether to adopt e-HR systems.
Through the empirical research, this study will be able to provide evidences and explanations for the selected antecedents and consequences of e-HR adoption in organizations.
Research Questions
Derived from the purposes addressed above, the research questions revolve around the factors that affect the usage of a firm’s e-HR and its possible outcomes in organization level.
As it was mentioned, many scholars have pointed out the significance for human
5
resources to adopt electronic human resource systems for more strategic focus (Brockbank, 1999; Lengnick-Hall & Moritz, 2003; Panayotopoulou, Vakola, & Galanaki, 2007; Ulrich, 1997). Moreover, some literature has discussed how organizations that experience more competitive tension will feel more threatened and begin to apply advanced technologies. The style of leadership is also a key factor that shapes a company’s internal environment (Cannella, Finkelstein, & Hambrick, 2009). Under the influence of a strong leader, employees may feel obligated to use e-HR systems and increase the usage of company’s e-HR. However, some companies still have not implemented intensive e-HR practice, and limited literature has revealed on the phenomenon. For organizations, information technology could help to save time and budget, and have a best number of HR staff (Strohmeier, 2007).
In order to understand the relationship among the competitive tension, strategic leadership, IT capability, usage of e-HR and organization outcomes, the following questions are investigated.
1. What is the relationship between competitive tension and the usage of a firm’s e-HR practices?
2. What is the relationship between strategic leadership and the usage of a firm’s e-HR practices?
3. What is the relationship between IT capability and the usage of a firm’s e-HR practices?
4. What is the relationship between the usage of e-HR and organizational outcomes?
6
Definition of Key Terms
Electronic Human Resource Systems (e-HR)
Strohmeier (2007) defined “e-HRM as the (planning, implementation and) application of information technology for both networking and supporting at least two individual or collective actors in their shared performing of HR activities” (p. 20).
Competitive Tension
Carroll and Hannan (1992) posited that a new company is hard to survive in industry with lots of existing companies since it feels more competitive tension, and the company number has positive influence on the establishment of new company. Thus, the competitive tension is measured by the total company number in an industry, and more companies in an industry means the industry is more competitive.
Strategic Leadership
Ireland and Hitt (2005) posited that “the strategic leadership means a person who has the ability to anticipate, envision, maintain flexibility, strategic thinking, and be able to work with others to create a better future for the organization” (p.63).
IT Capability
Bharadwaj (2000) suggested that “IT capability refers to the firm’s ability to mobilize and display IT-based resources in combination with other resources and capabilities” (p.171).
7