Effect of Enterprise Resource Planning Systems on Performance of Multinational Corporations in Kenya

Abstract

The study's aims were to ascertain how many MNCs in Kenya had implemented ERP systems and to find out how much of an impact these systems have on the performance of these companies. Dynamic capacities theory, resource-based theory, and contingency theory all provided theoretical underpinnings for the study. To find out how ERP systems have impacted them, this study used a cross-sectional survey design to poll all 64 MNCs in Kenya. Formalized surveys administered to distinct demographic groups served as the main data source. ERP systems, and organizational performance, with one manager from each corporation participating. The findings revealed that while all ERP dimensions contribute to organizational performance, ICT integration emerged as the most influential factor, demonstrating a significant positive impact. Human resources and procurement integrations showed positive but non-significant contributions, while financial integration had minimal direct influence on performance. According to the research, ERP systems improve operational efficiency, data management, and decision-making for multinational firms in Kenya. The importance of ERP systems in facilitating organizational growth and streamlining important business operations is highlighted by its adoption. In addition, the survey found that MNCs must integrate ICT to improve data security, enable smooth data sharing, and promote business continuity in order to respond quickly to changes in the market. Relying on self-reported data raises the possibility of response bias, and the study's cross-sectional methodology limits our understanding of ERP's effects over the long run. Focusing on MNCs in Kenya also restricts the study's applicability to different areas or types of organizations. Policymakers should prioritize creating a regulatory climate that is conducive to ERP system adoption, especially for systems that incorporate advanced information and communication technology elements. Academia should explore the longitudinal impacts of ERP systems and investigate mediating factors such as organizational culture and leadership. Practitioners should prioritize ICT integration in their ERP strategies, while MNC leaders should adopt a comprehensive approach that includes change management and employee training. Suggestions for further research include examining the long-term effects of ERP systems across various sectors and industries, as well as conducting qualitative studies on non-technical factors like leadership and employee engagement that influence ERP success.