The Role of Enterprise Resource Planning (ERP) in Improving Organization’s Intellectual Capital


The purpose of this study was to identify the influence of the management control system (MCS) on intellectual capital through the implementation of Enterprise Resource Planning (ERP) as an intervening variable. A theoretical model is developed that considers two concepts of MCS (the belief system and the boundary system) and the roles they play in enhancing intellectual capital. Data collected via survey from  57 managers of 36 companies in Indonesia that have implemented ERP system. This research used the partial least square to describe relationships between variables. Results suggest that belief system and boundary system has a positive influence towards intellectual capital through the implementation of ERP as an intervening variable on the companies that implement the ERP system in Indonesia. When the users experience that ERP is useful and easy to use, the users will use it well. Finding offer the implication for managers to start paying attention to the factors which can help to improve the users’ work performance. As the users’ performance improved the company’s intellectual capital will also be improved.

Keywords: communication value; economic knowledge; individual context; management belief system; management boundary system

[1] Schiuma G, Lerro A. Intellectual capital and company’s performance improvement. Measuring Business Excellence 2008; 12(2): 3–9.

[2] Castaneda D, Toulson P. The value of human resources measurement in intellectual capital and knowledge sharing. Electronic Journal of Knowledge Management 2013; 11(3): 226–234. https: //

[3] Tekavčič M, Peljhan D, Šević Z. Levers of control: analysis of management control systems in a slovenian company. The Journal of Applied Business Research–Fourth Quarter 2008; 24(4): 97–112.

[4] Yang C, Su YF. The relationship between benefits of erp systems implementation and its impacts on firm performance of SCM. Journal of Enterprise Information Management 2009; 22(6): 722–752.

[5] Erasmus E, Rothmann S, van Eeden C. A structural model of technology acceptance. SA Journal of. Industrial Psychology 2015; 41(1):1–12.

[6] Shih YY, Huang SS. The actual usage of ERP systems: an extended technology acceptance perspective. Journal of Research and Practice in Information Technology 2009; 41(3): 263–276.
%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d1443458X%26AN% 3d44769188

[7] Davis FD. Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS quarterly 1989; 13(3): 319–340. 1#page_scan_tab_contents

[8] Lengnick-Hall CA, Lengnick-Hall ML, Abdinnour-Helm S. The role of social and intellectual capital in achieving competitive advantage through enterprise resource planning (ERP) systems. Journal of Engineering and Technology Management 2004; 21(4): 307–330. science/article/pii/S0923474804000529

[9] Markus ML. Technochange management: using it to drive organizational change. Journal of Information Technology 2004; 19(1): 4–20.

[10] Gogan LM, Artene A, Sarca I, Draghic A. The impact of intellectual capital on organizational performance. Procedia-Social and Behavioral Sciences 2016; 221: 194–202. article/pii/S1877042816301793

[11] Rengkung LR. Keuntungan kompetitif organisasi dalam perspektif resources based view (RBV) [Organizational competitive advantage in the perspective of resources based view]. Agri-Sosioekonomi 2015; 11(2A): 1–12. [in Bahasa Indonesia].

[12] Anantadjaya SP. Comparative literature study on the resource-based theory of the firm and knowledge-based theory of the firm. Jurnal Sistem Informasi 2008; 3(1): 39–50. papers.cfm?abstract_id=1107729

[13] Pedron CD. Using the dynamic capabilities perspective to analyze CRM adoption: a multiple case in Portuguese organizations. [Desertation]. Universidade De Technica De Lisboa, Instituto Superior De Economia E Gestao, Lisbon (2009); 69–70.
capabilities_perspective_to_analyse_CRM_adoption_a_multiple_case_study_in_p ortuguese_organisations

[14] Agyemang G, Broadbent J. Management control systems and research management in universities: an empirical and conceptual exploration. Accounting, Auditing & Accountability Journal 2015; 28(7):1018–1046.

[15] Simons R. How new top managers use control systems as levers of strategic renewal. Strategic Management Journal 1994; 15:3:169–189. 4250150301

[16] Crombie NA, Geekie TJ. The levers of control in the boardroom. Paper presented in: 2010 6th Asia Pacific Interdisciplinary Research in Accounting Conference (APIRA 2010). July 11–13, 2010. Sydney, Australia.

[17] Ferreira A, Otley D. The design and use of performance management systems: an extended framework for analysis. Management Accounting Research 2009; 20(4): 263–282. science/article/pii/S1044500509000432

[18] Bansal V, Agarwal A. Enterprise resource planning: identifying relationships among critical success factors. Business Process Management Journal 2015; 21(6): 1337–1352. https://www.emeraldinsight. com/doi/abs/10.1108/BPMJ-12-2014-0128?journalCode=bpmj

[19] Hwang D, Min H. Identifying the drivers of enterprise resource planning and assessing its impacts on supply chain performances. Industrial Management & Data Systems 2015; 115(3):541-569.

[20] Nofal, MI, Yusof ZM. Integration of business intelligence and enterprise resource planning within organizations. Procedia Technology 20013; 11:658–665.

[21] Rauniar R, Rawski G, Yang J, Johnson B. Technology acceptance model (TAM) and social media usage: an empirical study on facebook. Journal of Enterprise Information Management 2014; 27(1): 6–30.

[22] Venkatesh V, Davis FD. A theoretical extension of the technology acceptance model: four longitudinal field studies. Management Science 2000; 46(2): 186–204.

[23] Pantano E, Di Pietro L. Understanding consumer’s acceptance of technology based innovations in retailing. Journal of Technology Management and Innovation 2012; 7(4):1–19.

[24] Teo T. A comparison of non-nested models in explaining teachers’ intention to use technology. British Journal of Educational Technology 2013; 44(3):E81–E84. j.1467-8535.2012.01350.x

[25] Wen Y, Kwon O. An empirical study of the factors affecting social network service use. Computers in Human Behaviour 2010; 26(2): 254–263.

[26] Zhu DS, Lin TCT, Hsu YC. Using the technology acceptance model to evaluate user attitude and intention of use for online games. Total Quality Management 2012; 23(8):965–980. https://www.

[27] Dost M, Badir YF, Ali Z, Tariq A. The impact of intellectual capital on innovation generation and adoption. Journal of Intellectual Capital 2016; 17(4): 675–695.

[28] Sällebrant T, Hansen J, Bontis N, Hofman-Bang P. Managing risk with intellectual capital statements. Management Decision 2007; 45(9):1470–1483.

[29] Lerro A, Iacobone FA, Schiuma G. Knowledge assets assessment strategies: organizational value, processes, approaches and evaluation architectures. Journal of Knowledge Management 2012; 16(4):563–575.

[30] Khalique M, Shaari JAN, Hassan A. Intellectual capital and its major components. International Journal of Current Research 2011; 3(6): 343–347.

[31] Cohen S, Kaimenakis N. Intellectual capital and corporate performance in knowledge-intensive SMEs. The Learning Organization 2007; 14(3):241–262.

[32] Moon YJ, Kim HG. A model for the value of intellectual capital. Canadian Journal of Administrative Sciences 2006; 23(3): 253–269. tb00630.x

[33] Schiuma G, Lerro A, Sanitate D. The intellectual capital dimensions of Ducati’s turnaround: exploring knowledge assets grounding a change management program. International Journal of Innovation Management 2008; 12(2):161–193. v_3a12_3ay_3a2008_3ai_3a02_3an_3as1363919608001935.htm

[34] Grasenick K, Low J. Shaken, not stirred: defining and connecting indicators for the measurement and valuation of intangibles. Journal of Intellectual Capital 2004; 5(2):268–281.

[35] Chu PY, Lin YL, Hsiung HH, Liu TY. Intellectual capital: an empirical study of ITRI. Technological Forecasting and Social Change 2006; 73(7):886–902.

[36] Watson A, Stanworth J. Franchising and intellectual capital: a franchisee’s perspective. International Entrepreneurship and Management Journal 2006; 2(3):337–349.

[37] de Pablo PO. Intellectual capital statements: what pioneering firms from asia and europe are doing now. International. Journal of Knowledge and Learning 2005; 1(3):249–268. https://www.inderscienceonline. com/doi/abs/10.1504/IJKL.2005.007759

[38] Park SY. An analysis of the technology acceptance model in understanding university students’ behavioral intention to use e-learning. Journal of Educational Technology & Society 2009; 12(3): 150–162.

[39] Chomchalao S, Naenna T. Influence of system traits and personal traits on the acceptance of e-government service. Information. Technology. Journal 2013; 12(5): 880–893.

[40] Johnston AC, Warkentin M. Fear appeals and information security behaviors: an empirical study. MIS Quarterly 2010; 34 (3): 549–566.

[41] Surendran P. Technology acceptance model: a survey of literature. International Journal of Business and Social Research 2012; 2(4): 175–178.

[42] Maas JB, van Fenema PC, Soeters J. ERP as an organizational innovation: key users and crossboundary knowledge management. Journal of Knowledge Management 2016; 20(3): 557–577. https://www.

[43] Seddon PB, Calvert C, Yang S. A multi-project model of key factors affecting organizational benefits from enterprise systems. MIS Quarterly. 2010;34(2):305–328.

[44] Chou HW, Lin YH, Lua HS, Chang HH, Chou SB. Knowledge sharing and ERP system usage in post- implementation stage. Computers in Human Behavior 2014; 33:16–22.

[45] Kallunki JP, Laitinen EK, Silvola H. Impact of enterprise resource planning systems on management control systems and firm performance. International Journal of Accounting Information Systems 2011; 12(1):20–39.

[46] Sharabati AAA, Jawad SN, Bontis N. Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision 2010; 48(1):105–131.

[47] Astuti PD, Sabeni A. Hubungan intellectual capital dan business performance dengan diamond specification: sebuah perspektif akuntansi [The relationship of intellectual capital and business performance with a diamond specification: an accounting perspective]. Paper presented in: Simposium Nasional Akuntansi VIII (SNA 8). September 15–16, 2005. Solo, Indonesia. pp. 694–707. [in Bahasa Indonesia].

[48] Ifinedo P, Nahar N. Do top-and mid-level managers view enterprise resource planning (ERP) systems success measures differently?. International Journal Management and Enterprise Development 2006; 3(6): 618–635. v_3a3_3ay_3a2006_3ai_3a6_3ap_3a618-635.htm

[49] Chenhall RH, Hall M, Smith D. Social capital and management control systems: a study of a non- government organization. Accounting, Organizations and Society 2010; 35(8): 737–756.

[50] Mundy J. Creating dynamic tensions through a balanced use of management control systems. Accounting Organizations and Society 2010; 35(5): 499–523. article/pii/S0361368209001020

[51] Su S, Baird K, Schoch H. Management control system effectiveness: the association between types of controls with employee organizational commitment across organisational life cycle stages. Pacific Accounting Review 2015; 27(1): 28–50. 0022

[52] Nick Bontis. National intellectual capital index. Journal of Intellectual Capital 2004; 5 (1): 13-39.