THE INFLUENCE OF ORGANIZATIONAL CULTURE ON EPEROLEHAN DESIGN

 

Nor Hadza binti Nor Yadzid

Abstract: To cultivate a knowledge-rich society in Malaysia and take the country into the Information Age, the Malaysian Government embarked upon the Multimedia Super Corridor (MSC) initiative in 1996 and Malaysian government has initiated Electronic Government with a primary aim of to create a virtually paperless administration, with an eye towards the widespread use of electronic and multimedia networks in the Government. The electronic procurement system, better known as ePerolehan or eProcument by Malaysian government is a focus of this study to represent one of MIS used by the government. ePerolehan streamlines government procurement activities that hopes to improves the quality of service it provides. ePerolehan converts traditional manual procurement processes in the Government to electronic procurement on the Internet. Close co-operation with the users lead to good systems analysis and design allowing software developers to gain an understanding of the user requirements. However an organizational culture that bounding an organization and in this case the Malaysian government might also have an implication in understanding the users requirement and thus the designing of the required system. Therefore the objective of this study is to describe the relationship between organizational culture of Malaysian government agencies and the design of ePerolehan system in order for the system to run successfully in meeting its objectives and at the same time are able to meet the needs of all users.

Keywords: management information system, electronic procurement, organizational culture, culture dimension

 

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Nor Hadza binti Nor Yadzid, Master of Accountancy Graduate School of Business, National University of Malaysia, Malaysia

1

INTRODUCTION

Technology has created new information alternatives that may influence the way information system users make decisions. Accounting information systems (AIS) provide input for decision making. Technology has availed many new information alternatives such as a presentation features that could change the way decisions are made. An access to a database of basic transaction information makes it possible to acquire detailed accounting data and aggregate it differently for each decision situation. A good system can provide flexible, interactive user interfaces that immediately respond to a myriad of information requests. Management information system (MIS) is part of AIS and it is a subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solve business problems such as costing a product, service or a business-wide strategy.  Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in accounting and operational activities in the organization to support of human decision making.

By referring to Malaysian perspective, in order to cultivate a knowledge-rich society in Malaysia and take the country into the Information Age, the Malaysian Government embarked upon the Multimedia Super Corridor (MSC) initiative in 1996 and set up the Multimedia Development Corporation (MDC) to oversee its development. The MDC aims to be a "one-stop super shop" focused on publicizing the advantages of the MSC worldwide, regulating laws and policies related to the development of the MSC, and overseeing the overall development of the MSC infrastructure. The MSC comprises seven flagship applications, designed to facilitate the development of the country towards becoming a key player in the Information Age.

The Current waves of E-Government are rising through public organizations and public administration across the world. More and more governments are using ICT especially Internet or web-based network, to provide services between government agencies and citizens, businesses, employees and other non-governmental agencies (Zaharah, 2007; Ndou, 2004; Donnelly & McGruirk, 2003; Fang, 2002). The Malaysian government has envisioned a technologically advanced society and implicitly, a technologically enabled government through its Vision 2020 (Hazman et al.., 2006; Maniam, 2005). The move towards a digital government is progressing slowly along the government-to-government (G2G) route and also along the government-to-citizen (G2C) and government-to-business (G2B) path.

Malaysian government has initiated Electronic Government with a primary aim of to create a virtually paperless administration, with an eye towards the widespread use of electronic and multimedia networks in the Government. Programmes under this initiative include Project Monitoring System, Human Resource Management Information System, Generic Office Environment, Electronic Procurement, E-Services, E-Government and E-Syariah. Electronic and multimedia infrastructure will eventually encompass all levels of government, and it doing so, information flows and processes related to government affairs will be made faster and more efficient.

The electronic procurement system, better known as ePerolehan by Malaysian government is a focus of this study to represent one of MIS in Malaysia.  ePerolehan streamlines government procurement activities that hopes to improves the quality of service it provides. ePerolehan converts traditional manual procurement processes in the Government to electronic procurement on the Internet. Through ePerolehan suppliers may present their products on the World Wide Web, receive, manage and process purchase orders and receive payment from government agencies via the Internet. The supplier's product catalogue is converted into the form of an electronic catalogue or eCatalogue, which can be viewed from any desktop with a web browser. Besides that, supplier is able to submit quotations, obtain tender document, submit tender bid and also to register or renew their registration with the Ministry of Finance through the internet  via  ePerolehan. Suppliers are also able to submit application, check application status and pay registration fees easily through ePerolehan.

With a high competition in the private and public sector, organizations are demanded to provide a greater efficiency, quality and more flexibility of services.  This condition imposes additional demands on the organization’s information processing capabilities. In trying to achieve these strategic objectives, organizations adopt more sophisticated and comprehensive management information systems (MISs) (Choe, 1996; Ghorab, 1997). These provide top managers with a comprehensive and broad range of information about multiple dimensions of the firm’s operations (Choe, 1996, 2004), facilitating decision-making and performance achievement (Kaplan & Norton, 1996; Kim & Lee, 1986). Government as an organizations would have different organizational culture that will affect the designing of ePerolehan that later will help them to achieve their strategic performance successfully.

 Malaysian government has developed its own MIS and by developing a tailor made information system, it is belief may increase the functionalities to meet specific user requirements. The success of a tailor made MIS depends very much on the co-operation between the users and the developers. Close co-operation with the users lead to good systems analysis and design allowing software developers to gain an understanding of the user requirements. However an organizational culture that bounding an organization and in this case the Malaysian government might also have an implication in understanding the users requirement and thus the designing of the required system.

Culture refers to an organization's values, beliefs, and behaviors. In general, it is concerned with beliefs and values on the basis of which people interpret experiences and behave, individually and in groups. Firms with strong cultures achieve higher results because employees sustain focus on the way of doing things. Culture is shaped by corporate vision, shared values, beliefs, assumptions, past experience, learning, leadership and communication.

Organizational culture on the other hand is an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. This definition continues to explain organizational values also known as beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another.

Organizational culture is also commonly held in the mind framework of organizational members. This framework contains basic assumptions and values. These basic assumptions and values are taught to new members as the way to perceive, think, feel, behave, and expect others to behave in the organization. Edgar Schein (1999) says that organizational culture is developed over time as people in the organization learn to deal successfully with problems of external adaptation and internal integration. It becomes the common language and the common background. So culture arises out of what has been successful for the organization. Culture starts with leadership, is reinforced with the accumulated learning of the organizational members, and is a powerful (albeit often implicit) set of forces that determine human behavior. An organization’s culture goes deeper than the words used in its mission statement. Culture is the web of tacit understandings, boundaries, common language, and shared expectations maintained over time by the members.

These have arises to a questions of:

·         Is there any relationship between organizational culture with the design of ePerolehan?

·         Does organizational culture of Malaysian government agencies would have an influence of on the design of it ePerolehan?

·         What are the areas of organizational culture that have an influence on ePerolehan design?

Therefore the objective of this study is to describe the relationship between organizational culture of Malaysian government agencies and the design of ePerolehan in order for the system to run successfully in meeting its objectives and at the same time are able to meet the needs of all users namely government agencies and suppliers.

LITERATURE REVIEW

Management Information System and Culture

Adapting an organization’s management systems, structure, and culture to rapidly changing requirements of the external environment is becoming more and more critical for organizations bound to the economy. This criticality is even more pronounced when the organization uses the Internet for interaction with its members and customers. MIS must be implemented to meet only the most important requirements plus those of the rest needed to ensure the coherence of the system containing the most important requirements C. McPhee (2002), F. Moisiadis (1998), B. Nuseibeh (2000).

ePerolehan System

Malaysian government has created Electronic procurement (ePerolehan) and was developed by commerce dot com. It is a system which enables suppliers to sell goods and services to Government agencies through the Internet. Suppliers may advertise their goods, present their pricing, process orders and deliveries, and make collections. The entire process is done electronically, through the Internet, from the desktop. Malaysian Electronic procurement has four modules namely supplier registration (SR) module direct purchase module, quotation module tender module and Central Contract (CC) module.

Potential supplier need to register their company and product or services offered under the supplier registration (SR) module. This module was first launched in 2000 and serves as a single point of registration for Government Suppliers. All approvals for the applications remain with the Ministry of Finance. Services available in the Supplier Registration module includes new registration, renewal, application for additional category, application for Bumiputera status and facility to update supplier profile. Direct purchase was launched in 2002 and this module is for procurements not exceeding RM100,000 in value. It begins with sourcing from selected suppliers and proceeds into the order fulfillment stage once all terms are agreed. A quotation module is for any purchase with a total value between RM100,000 to RM 200,000. Through the quotation process, an invitation is sent out to a minimum of 5 suppliers who are required to respond through the ePerolehan system within a specified time frame. Upon evaluation, one supplier will be awarded. A tender module was launched in 2003. This module was designed for both closed and open tenders for any purchase with a total value above RM200,000. The processes involved in tenders are requisition approval, formation of committees, specification preparation, tender notice, issuance of tender document, tender submission, evaluation decision and award, contract preparation and signing and order fulfillment. Central Contract (CC) module was launched in 2000 and it is a procurement mode used across ministries for specific products contracted to selected suppliers.     

Organizational Culture Dimension

The theoretical basis drawn of developing this research is organizational culture theory and a framework by Detert et al.(2000). Detert et al. derived the dimensions of culture in their framework from a content analysis of synthesis of what have repeatedly emerged as the components of culture in other organizational culture research (Detert et al., 2000). One of their goals was to provide a basis upon which future theoretical and empirical work on organizational culture could be conducted. This framework supports assessment of dimensions of organizational culture and the practices or artifacts that arise out of those dimensions. It focuses on organizational culture as a system of shared values that define what is important and that guide organizational members’ attitudes and behaviors. The eight dimensions of culture included in Detert et al.’s theoretical framework can be used to identify behaviors related to cultural values that underlie system design in order to inform theory about the way these cultural dimensions influence the MIS design used by Malaysian government agencies. The term organization here refers to Malaysian government agencies.

Orientation to change (stability vs. change)

Some organizations are change oriented and are characterized by a focus on continuous improvement (S.J. Fox-Wolfgramm et al., 1998). Change is often more widely accepted in these firms because organizational members are accustomed to change and view it as positive (S.L. Brown et al., 1997) Others are more stability oriented. Change often requires organizational members to understand a new way of performing processes, as well as how and why their processes have changed ( R. Jamieson and M. Handzic, 2003).

Control, coordination, and responsibility (concentrated vs. autonomous decision making)

Organizations vary in the degree to which the structure of decision making is concentrated or shared. Where decision making is fairly concentrated, the rules of a few guide the behavior and actions of the majority, and decisions making is centralized (P.D. Reynolds, 1986). In organizations where it is shared, organizational members are encouraged to be autonomous in their decision making (J. Pfeffer, 1998). An overriding norm in many organizations is silo behavior where individual divisions, units, or functional areas operate as silos or independent agents within the organization (B. Caldwell &T. Stein,1998; T.H. Davenport,1994; M.C. Jones,2001).

Orientation to collaboration (isolation vs. collaboration)

Perceptions about the relative value of working alone or collaboratively are motivated by underlying beliefs about how work is best accomplished (Detert et al., 2000). A culture that values individual efforts more than collaborative ones places more value on individual autonomy and believes that collaboration is inefficient (C. O’Dell & C.J. Grayson,1998). On the other hand, organizations that believe collaboration is more efficient and effective than individual effort encourage teamwork and organize tasks around groups of people ( P.D. Reynolds, 1986).

Orientation and focus (internal vs. external)

Orientation and focus addresses the relationship between a firm and its environment. This includes ideas about the extent to which the firm is focused on its internal or external environment (P.D. Reynolds, 1986). For example, many firms assume that the key to organizational success is to focus on the processes and people within the organization, whereas others focus primarily on external constituents.

A summary of these four dimensions is provided in Table 1.

Table 1: Dimension of Organizational Culture

Organizational Culture Dimension	Detert et al.	Literature
Orientation to change (stability  vs.  change)	An extent to which organizations have a propensity to maintain a stable level of performance that is good enough or a propensity to seek to always do better through innovation and change	Some organizations are change oriented and are characterized by a focus on continuous improvement and some are stable oriented (S.J. Fox-Wolfgramm et al., 1998).
Control, coordination, and responsibility (concentrated vs. autonomous decision making)	An extent to which organizations have decision making structures centered around a few vs. decision making structures centered around dissemination of decision making responsibilities throughout the organization.	Where decision making is fairly concentrated, the rules of a few guide the behavior and actions of the majority, and decisions making is centralized (P.D. Reynolds, 1986). In organizations where it is shared, organizational members are encouraged to be autonomous in their decision making (J. Pfeffer, 1998).
Orientation to collaboration (isolation vs. collaboration)	An extent to which organizations encourage collaboration among individuals and across tasks or encourage individual efforts over team-based efforts.	A culture that values individual efforts more than collaborative ones places more value on individual autonomy and believes that collaboration is inefficient (C. O’Dell and C.J. Grayson,1998). Organizations that believe collaboration is more efficient and effective than individual effort encourage teamwork and organize tasks around groups of people ( P.D. Reynolds, 1986).
Orientation to work (process vs. results)	An extent to which organizational improvements are driven by a focus on internal process improvements or by external stakeholder desires.	A culture that values individual efforts more than collaborative ones places more value on individual autonomy and believes that collaboration is inefficient (C. O’Dell & C.J. Grayson,1998). Organizations that believe collaboration is more efficient and effective than individual effort encourage teamwork and organize tasks around groups of people (P.D. Reynolds, 1986).

CONCEPTUAL FRAMEWORK

Using Detert et al.’s  four dimensions of culture as a theoretical lens, an investigation on how these dimensions influence ePerolehan design can be made. The conceptual framework is provided in Figure 1.

 

Figure 1: Conceptual Framework

CONCLUSION

Organizational culture is a commonly held –in-the-mind framework of organizational members and organizational culture is developed over time as people in the organization learn to deal successfully with problems of external adaptation and internal integration. When e-Perolehan was introduced and implemented with the entire process of purchasing is done electronically through the internet, the success of the four modules namely supplier registration (SR) module direct purchase module, quotation module tender module and Central Contract (CC) module is still in question.  A study on whether organizational culture would influence the designing of ePerolehan would help managers in facilitating them making a decision as managers ultimately responsible for strategy management and organizational performance. This study will also help to provide some clarification on the relationship between organizational culture and e-Perolehan design by using the four dimension of organizational culture by Detert et al.(2000).

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