InternationalJournalofAccountingInformationSystems

1(2000)91105

Acontingencymodelofperceivedeffectivenessin
accountinginformationsystems:Organizational
coordinationandcontroleffects
AndreasI.Nicolaou*
DepartmentofBusinessAdministration,UniversityofPiraeus,80KaraoliandDimitriouStreet,18534Piraeus,Greece

Abstract
Acontingencymodelisadvancedthatexaminessourcesofrequirementsfororganizationalcoordinationand
controlastheyaffecttheextentofintegrationinanaccountinginformationsystem. Requirements that are
contingentonthedegreeoforganizationalformalization,informationinterdependenceamongfunctionalareas,
anddependenceininterorganizationalinformationsharingandelectronicdatainterchangelinks,areexamined.
Thecongruenceorfitofsystemintegrationwiththoserequirementsisakeyconceptthatinfluencesbeliefs
aboutsystemeffectiveness.Resultsoftheempiricalstudyindicatedthat,ashypothesized,thefitbetweenthe
accountingsystemdesignandthecontingencyfactorsresultedinamoresuccessfulsystem.Specifically,system
fitwasasignificantfactorthatexplainedvariationsinperceivedAISeffectiveness,asmeasuredbydecision
makersperceivedsatisfactionwiththeaccuracyandmonitoringeffectivenessofoutputinformation.Theeffect
ofsystemfitonasecondfactorofperceivedAISeffectiveness,asmeasuredbydecisionmakerssatisfaction
withtheperceivedqualityofinformationcontentinsystemoutputs,wasonlymarginallysignificant.Thestudy
addressesanimportantareainaccountingsystemsresearchthatdirectlyrelatestothedecisionfacilitationand
controlobjectivesofaccountinginformation.2000ElsevierScienceInc.Allrightsreserved.
Keywords:Accountinginformationsystems;Perceivedinformationsystemeffectiveness;Contingencytheory;Interorganiza
tionalsystems.

1976; Gordon and

Narayanan, 1984; Kim,
Acriticalresearchissueinthefieldsofaccountingand 1988; Macintosh and
management decisionmaking concerns the fit of theDaft, 1987; Mia and
accounting information system (AIS) with the Chenhall,

1994).
organizational requirements for information com Although these earlier
munication and control. An AIS is defined here as a models have provided
computerbased system that processes financial in useful directions for AIS
formation and supports decision tasks in the context of research, they have not
coordinationandcontroloforganizationalactivities.Prior examinedspecificsystem
accountingresearchhasexamineddifferentmodelsoffit design constructs in
between an AIS and an organizations task technology, relation to system
structure, and environment (Chenhall and Morris, 1986; effectiveness.Thepresent
GordonandMiller,
studyaddstothisbodyof

1.Introduction

*CorrespondingAuthor.Tel.:1

301
41207
51;
fax:1

301
60162
93E
mail:

literaturebydevelopinga
specific system design
construct,

AIS
Integration, and by
examining its functional
relationship

with
perceived system ef
fectiveness.

AIS
Integration, in turn, is
hypothesized to be a
function of a number of
contingency constraints
that create organizational
coordination and control
requirements. Sources of
contingencycon

anicol@unipi.gr
14670895/00/$seefront
matter2000Elsevier

ScienceInc.Allrightsreserved.PII:S14670895(00)000

063

92

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

the more traditional

straintsonAISdesignhavebeenidentifieddefinition

of
through a review of prior accounting satisfactionwithquality
studies. In addition, this study introduces ofinformationcontent
constraints due to interorganizationalinsystemoutputs.
interactions that have not been examined The remainder of
beforeintheaccountingsystemsliterature. thearticleisorganized
The approach in this study is consistent asfollows:Inthenext
withtheinformationprocessingparadigmofsection, research that
organizationaldesign(DaftandLengel,1986; relates to individual
Galbraith,1973;TushmanandNadler,1978),components of the
which would suggest that AIS design research model is
representsaresponsetotherequirementsfor reviewed.

The
organizational coordination and control theoretical framework
(OCC). AISintegration referstoaparticularisdevelopedandthere
design state where the system in itssearch hypothesis for
implemented form can provide output in the study is advanced.
formation that may be effectively used to The research method
address OCC problems and requirements. for the study is
Contingentvariables,suchas(a)thedegree presented next, fol
of formalization in the structure of an lowedbyapresentation
organization(HageandAiken,1969;Simons, of the empirical
1987), (b) interdependencies in information findings. The article
requirementsbetweenfunctionalareaswithin concludes with a
an organization (Govindarajan and Fisher, discussion of the find
1990;Thompson,1967),and(c)dependenciesings and with
duetointerorganizationalinformationsharing suggestions for future
and electronic data interchange (EDI) linksresearch.
(Bakos,1991;Srinivasanetal.,1994;Zaheer
andVenkatraman,1994),influencetheextent
to which organizations experience different
levelsofcoordinationandcontrolproblems.
AIS integration can resolve difficulties in
coordination and control that are created by
thesecontingentvariables.
Thepurposeofthisstudyistoempirically
examine the relationship between AIS
integration and perceptions of system
effectiveness.Specifically,itishypothesized
thattotheextentthatAISdesignprovidesfor
systemintegration,asnecessitatedbythethree
contingent variables mentioned above, the
systemwouldbeperceivedaseffective.This
hypothesisistestedwithdatacollectedfrom
firms in the United States using the survey
researchmethod.Resultspartiallyconfirmthe
hypothesisthatthedegreeoffitbetweenAIS
integration and the contingent variables
predictsAISeffectiveness.Thereisstronger
support for the hypothesis when AIS
effectiveness is defined by decisionmakers
satisfactionwiththeaccuracyandmonitoring
effectiveness of output information than by

2.Theoretical
framework
Theresearchmodel
for the study is
presentedinFig.1.The
model posits that
perceptions of system
effectiveness will
depend on the fit
between AIS In
tegration and the
contingent factors of
organizational
formalization,
information
interdependenceamong
functional areas within
the organization, as
wellasinterdependence
with

other
organizations. These
contingencies are
likely to create
requirements for inte
grated information that
are necessary for the
satisfaction

of
coordination and
controlneedswithinan
organization. The
contingency
formulation that is as
sumedinthisarticleis
that the design of an
AISwillbeadaptedto
respond

to
contingencies

in
expectation that the
system will meet the
information require
ments of its users and
thus be perceived as
effective. The model
discussionisorganized
around its major
components, starting
with a general
discussionoftheuseof
a

contingency
framework for AIS
design.

2.1.Contingencyframeworkfor
AISdesignandeffectiveness
Theresearchissuesthatarecentraltothe
organizationalliteraturerelatetothedesignof
internally consistent organizational
mechanismsthatwillensuremanagerialand
economic effectiveness (Galbraith, 1995;
Zimmerman, 1995). Accountinginformation
systems are considered important
organizationalmechanismsthatarecriticalfor
effectivedecisionmanagementandcontrolin
organizations (Jensen, 1983; Zimmerman,
1995). Differences in requirements for
organizationalcoordinationandcontrolacross
organizations,therefore,asindicatedbysuch
contingencies as organizational context and
structure,arelikelytoresultindifferencesin
accounting systems (Jensen, 1983, 325). As
Otley states, Accounting systems are an
importantpartofthefabricoforganisational
life and need to be evaluated in their wider
managerial,organisationalandenvironmental
context(1980,422).Thecontingencytheory
of organizational design (Daft and Lengel,
1986;Galbraith,1973;TushmanandNadler,
1978)canthereforesuggestrelevantmodels
fortheeffectivedesignofAISs.

This study attempts to extend prior

models and address criticisms of specific
applications.First,itexpandsthescopein
defining organizational context to also
includeeffectsduetointerorganizationalin
teractions. The examination of multiple
contingencies that may have a joint
influence on system design and
performance can improve the explanatory
abilityofaresearchmodel(Gresov,1989).
Second, this study addresses, in part,
criticismsofspecificappli

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

93

Fig.1.Researchmodelforthestudy.

data elements used in

different functional
cationsofcontingencytheorymodels.Past areas within the
applications had overlooked the linkorganization, enhance
between system design and performancedata organization, and
andwerecriticizedforthelackofattentionpromote a cross
to such a relationship (Otley, 1980; functional view within
Schoonhoven, 1981). This study partiallythe organization (Cook
addresses this criticism by examining the andEining,1993),can
critical path between system design and create coordination re
perceived effectiveness; however, it onlyquirements for the
defines AIS effectiveness in terms of sharing of scarce
perceptions about system characteristics,resources
anddoesnotexaminespecificperformance (Govindarajan and
outcomes. The relationship between AISFisher,1990)aswellas
integrationandeffectiveness,however,stillcontrol requirements
representsanimportantspecificapplicationfor the centralized
of a contingency theory model for AISmonitoring of deci
design.
sions and actions
(Simons, 1987). AIS
designshould

2.2.Contingentvariables

Theproblemofdefiningtheinformational
structureofthefirmhasbeendealtwithinthe
early accounting literature. Prakash and
Rappaport(1975)havedefinedtheelementsof
the firm in terms of the following five
interacting processes: planning process,
decisionmaking process, implementation
throughobservationprocess,datastructuring
process,andperformanceevaluationprocess.
Theroleofaccountinginformationistotie
those elements in a common informational
structure. The need to minimize redun
dancies,promoteincreasedconsistencyamong

therefore be adapted
to meet such
requirements. The
need to deal with
inefficiencies, reduce
fragmentation in
services, and increase
control

in
interorganizational
resourcesharing
(RogersandWhetten,
1982)canalsohavea
significant effect on
the degree of op
erating complexity of
anAISandnecessitate
importantchangesin
AISdesign.
The following
contingent factors,
therefore, motivate
AIS integration: (a)
interdependencies in
information
requirements between
functional areas within
an

organization
(Govindarajan and
Fisher, 1990; Thomp
son, 1967), (b) the
degreeofformalization
in the structure of an
organization(Hageand
Aiken, 1969; Simons,

1987), and (c) dependencies due to interor aspect of task

ganizational information sharing andtechnology both
electronic data interchange (EDI) links within
business
(Bakos,1991;Srinivasanetal.,1994;Zaheer subunits (Chenhall
andVenkatraman,1994).
and Morris, 1986;

Interdependence denotes the extent toKim, 1988) and

which different organizational segmentsamong subunits
withinasubunitdependononeanotherto(Govindarajan and
carry out their tasks (Thompson, 1967). Fisher, 1990; Hayes,
Interdependence can occur at any level, 1977; Macintosh and
including the individual, departmental, orDaft, 1987). Task
functional subunit, or organizational levelinterdependence
(Fry,1982).Priorresearchinmanagement within subunits was
accountinghasexaminedthisvariableasanalsoreportedtohavea
significantassociation

with system integra

tion, that is, the
provision

of
information that inte
grated the effects of
decisions

from
different functional
areas (Chenhall and
Morris,1986).
Following Prakash
and Rappaports
(1975)

con
ceptualization of an
information structure
asasetof

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A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

determining

the

interactingactivitiesthatshareinformationdependence of one
for the execution of organizational tasks, organization on
interdependenceisdefinedinthisstudyas another: (a) the
the required information sharing thatimportance of the
takesplaceamongdifferentorganizationalresource, or the extent
functions in carrying out their tasks. This to which the
definition is consistent with Gresovsorganizationrequiresit
(1989)definitionofworkunitdependenceforcontinuedoperation
as the extent to which information or and survival, and (b)
resourcesfromoutsidesourcesarerequired theextenttowhichthe
asnecessaryinputsforaworkprocess.Itis organization has
alsoconsistentwiththeconceptofresource discretion over the re
sharing that was developed by Gupta andsource allocation and
Govindarajan(1988)andGovindarajananduse (Pfeffer and
Fisher(1990).
Salancik,1978,45).In

Organizational formalization refers to the

cases where resource
extenttowhichanorganizationusesrulesand
dependence is present
procedurestoprescribebehavior(Fredrickson,
and significant, the
1986; Hage and Aiken, 1969). A more
integration

of
formalized organization, or one where many
interorganizational
rulesexist,willtendtobeassociatedwithtight
information, processed
controlwhererulesandcontrolproceduresare
through EDI systems,
embeddedwithin organizational routines and
with

internal
systems, and there is an increased need for
accountingsystemscan
themonitoringoforganizationalactionsonan
provide significant
ongoing basis. In such situations, the AIS
benefits to the
becomesatoolforcontrolandmustprovide
organizationintermsof
integrated information at the organizational
improved coordination
levelinordertosupportcontrolrequirements.
and control of internal
Theintroductionofinformationsharingactivities.

systems that crossorganizational

boundaries (Bakos, 1991) can also
significantly increase the degree of com
plexityintheoperatingenvironmentofan
AIS and necessitate important changes in
AIS design in order to integrate
interorganizationalinformation(Barrettand
Konsynski, 1982). Interorganizational
systems (IOS) facilitate communication
between two or more organizations by
providingahighlyefficientanderrorfree
electronic information link (Bakos, 1991).
These benefits of electronic integration
may, however, create dependencies
between two different organizations that
relyoneachotherfortheprocurementof
resources.
Resource dependencies emerge from
asymmetriesinthecontrolofcriticalresources
(Pfeffer and Salancik, 1978). Pfeffer and
Salanciks model of resource dependence
positsthatthefollowingfactorsarecriticalin

2.3.AISEffectiveness
Past research in
information systems
has defined system
effectivenessinterms
of user information
satisfaction

or
perceptionsofsystem
usersabouttheextent
to which the
information system
available to them
meets

their
information
requirements (Ives et
al.,1983,785).Given
the lack of objective,
systematic indicators
of

information
systems effectiveness
thatmightsuggestthe
potential impact of a
system on or
ganizational
performance, user
information satisfac
tion has been
generally accepted as
a surrogate for utility
indecisionmaking.
A semantically
similar concept of
information
usefulness has also
been extensively
examined in the
accounting literature
(Chenhall and Morris,
1986; Chong, 1996;
Fisher, 1996;Gordon
and Narayanan, 1984;
Gul and Chia, 1994;
Kim, 1988; Larcker,
1981; Mia and
Chenhall, 1994).
Accounting informa
tion, in general, has
been categorized into
twoprimarytypes:(a)
decisioninfluencing
information that is
mainly used for
organizational control

and(b)decisionfacilitatinginformationthat
ismainlyusedfororganizationalcoordination
(DemskiandFeltham,1976;Kren,1992).The
wholesetofinformationusefulnessstudies
in accounting draws on a common base of
information concepts that were originally
developedtocapturereportusersreactionsto
qualitative characteristics of accounting
information.

AIS effectiveness, therefore, is defined

inthisstudyintermsoftheperceptionsof
decisionmakersthattheoutputinformation
available to them through transaction
processing, management reporting, and
budgetingsystemsmeetstheirrequirements
for organizational coordination and
control.
2.4.TherelationshipbetweenAIS
integrationand
AISeffectiveness
AISintegrationhasbeendefinedabove
asasystemdesignstatethatinfluencesthe
ability of the system to provide output
informationthatcanbeeffectivelyusedto
respond to OCC requirements. At the
conceptuallevel,therefore,AISintegration
isrelatedtoAISeffectiveness.
Increased system integration has been
suggested to improve communications both
within(Huber,1990)andacrossorganizations
(Malone et al., 1987). Huber (1990) argues
that improved coordination due to system
integration can improve the quality of deci
sionmaking.Therelationshipbetweentheuse
ofintegratedsystemsanduserevaluationsof
tasktechnology fit, that is, the degree to
which a technology assists an individual in
performinghisorherportfoliooftasks,has
beenempiricallydemonstratedby

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

Yellow

Pages
Goodhue(1995).Electronicintegrationamong Directory (Phillips
interorganizational (EDI systems) and Business Information,
internal information systems has also been 1995). Due to the
reportedtohaveasignificantassociationwith nature
of EDI
a perceptual measure of user information technology, financial
satisfaction(Premkumaretal.,1994),andan institutions were ex
objectivemeasureofshipmentdiscrepancyrecluded from the
ductionintheautomotiveindustry(Srinivasan sample.

The
etal.,1994).Inconclusion,systemintegration informationabouteach
isshowntobeanimportantconstructinpast organization selected
research. Accounting systems are primarily fromthisdirectorywas
influenced by contextual factors that affect individually cross
accounting processes for transaction provalidated

with
cessing, reporting, process monitoring, and information from the
performance evaluation. As a result, this Company Profiles
study examines the effect of contextual Online Database
influences on AIS integration and on its (1995; an online data
relationshipwithsystemeffectiveness.
base of more than
The congruence of AIS integration with 100,000 public and
the contingent variables implies that an privateorganizationsin
interaction exists between the two sets ofthe United States).
concepts(DrazinandVandeVen,1985).An Each selected or
interaction hypothesis is advanced that ganization was mailed
predictstheeffectofsystemcontextfitonAIS one copy of the
effectiveness. Following Venkatramansresearchinstrumentfor
(1989) argument, fit in this study iscompletion by the
conceptualized in terms of how strongly the financialcontrolleror
relationshipbetweenAISintegrationandAIS
effectivenessisaffectedbythepresenceorab
sence of the contingent variables. The three
contingent variables, therefore, jointly
influence the relationship between AIS
integration and AIS effectiveness. The
followingresearchhypothesisisadvanced:
H1: The fit of AIS integration with
organizational coordination and
controlrequirements,asdefinedbythe
joint effect of information inter
dependence among functional areas,
organizational formalization, and
interorganizational dependence, will
have a positive association with
perceptionsofAISeffectiveness.

3.Researchmethod
3.1.Sampleanddatacollection
A crosssectional sample of 600
organizationswasrandomlyselectedfromthe
Phillips Business Information 1995 EDI

95

chieffinancialofficer.
The

research
instrument

was
evaluated by expert
panels, including
facultymembersand
anindividualfromthe
target population
(Dillman, 1978, 155
158). The revised
instrument and a
cover letter were
mailedtothespecific
individual who was
listed as a financial
controller or chief
financial officer of
each firm in the
sample. A postcard
reminderwassentand
nonrespondents were
followedupwithtwo
additionalmailings.
Thefinalresponse
ratefromallmailings
was22percent.Table
1presentsthesample
characteristics.
Tests

for
nonresponse bias were
performed to de
termine(a)whetherthe
distribution of the 600
organizations in the
response (n 5 120) or
nonresponse (n 5 480)
categories

was
independent

of
available demographic
characteristics
(industrial
classification, gross
revenue,andnumberof
employees), and (b)
whether early and late
respondents provided
significantly different
responses. Chisquare
tests indicated no
significant differences
in the three
demographic
characteristics. The

Hotellings T2 statistic also indicated no SeddonandYip,1992),

significant differences in the multivariate a decisionmakers
satisfaction with the
meansofearlyversuslaterespondents.
perceived quality of
3.2.Measurementofresearchvariables
information outputs
providedbythesystem
3.2.1.AISeffectiveness(AISEFF)
Thequestionofeffectivenesshasplagued has been suggested as
the referent literature of organizational animportantconceptof
analysis. Earlier taxonomies of cumulative effectiveness. This

therefore,
researchontheissueseemtoconvergeona study,

AIS
conceptualization that incorporates multiple measures
dimensionsofeffectiveness(Cameron,1986;effectiveness using a
Lewin and Minton, 1986; Quinn andnumber of items that
Rohrbaugh, 1983). Research in information relatetothesatisfaction
systemshasalsoprovidedsimilartaxonomies of system users with
and has suggested that system effectiveness the quality of
canbeviewedthroughanumberofdifferent informationoutputs.

previously
perspectives (DeLone and McLean, 1992; A
Kim, 1989). In prior studies examining validated instrument
multiple indicators of accounting system(Doll and Torkzateh,
effectiveness (Ives et al., 1983; Kim, 1988; 1988) was used to

measure

user
satisfaction(asurrogate
measure for AIS
effectiveness). The in
strument encompasses
five related sets of
information concepts:
information content,
accuracy, format, ease
of use, and timeliness.
This

instrument,
hereafter called the
UIS scale, includes
twelve items and has
been shown to exhibit
adequate construct
validity (Doll et al.,
1994), as well as test
retest

reliability
(Hendrickson

96

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

(1987) as a measure
etal.,1994;TorkzatehandDoll,1991).Theof management
twelveitemsweremeasuredasinDolland control. The second
Torkzateh (1988), that is, using a 5pointitemwasdevelopedin
almostnevertoalmostalwaysLikertscale. this study and
In addition to these twelve items, twomeasured the overall
additional items were included in the effectiveness of the
instrument in order to measure user AIS in supporting
perceptions about the monitoringongoing monitoring
effectivenessofthesystem.
requirements. Both
The Committee of Sponsoringitems were measured
Organizations of the Treadway Commission ona7point, strongly
(1992) suggests the importance of ongoing agree to strongly
monitoring as an indicator of effective disagree Likert scale.
accounting and internal control systems.Panel A of Table 2
Ongoingmonitoringisbuiltintothenormal, presentsallitemsused
recurring operating activities of theto measure AIS
organization and is generally assumed to beeffectiveness.
more effective than periodic evaluation. The
followingtwoitemswerethereforedeveloped: 3.2.2.AISintegration
For the AIS overall, (a) control reports are (AISINT)
providedfrequentlyonasystematic,regular At the operational
basis,forexample,daily,weeklyreports;(b) level, AIS integration
allinall,ourAISprovidesinformationuseful isdefinedintermsof
fortheongoingmonitoringofdecisionsand the following two
actions.ThefirstitemwasusedbySimons
characteristics:

Table1
Samplecharacteristics

(a) the degree of

integration in internal
AIS applications
(Davenport, 1998;
Davis et al., 1998;
Scapens et al., 1998)
and (b) the degree of
integrationbetweenthe
interorganizationalEDI
systemsandtheinternal
AIS applications
(Cathey, 1991; Kogan
et al., 1997;
Mazurkiewicz, 1994;
Splettstoesser, 1997).
The importance of
thesecharacteristicshas
been

repeatedly
emphasized in the
accountingprofessional
literaturethatiscitedin
the above references.
Accountingsys

ResponseRate
OriginalrandomsamplefromEDIDirectory
Less:
Undeliveredquestionnaires
Declinedresponseduetotimepressures
DeclinedresponsebecauseofnonuseofEDIsystem
Effectivesamplesize
Numberofcompletedquestionnairesreceived
Responserate
Useableresponses(exclude10unuseablequestionnairesbecause
ofnosignificantEDIuse)
Effectiveresponserate
TypeOfIndustriesRepresentedByRespondingFirms
a.Manufacturing
b.WholesaleandRetailTrade
c.TransportandElectric/GasUtilities
d.Miscellaneous
Total
SizeofRespondingFirms
Averagenumberofemployeesinrespondingfirms:3,524employees
(S.D.55,730employees).
Averagerevenue(grosssales),$669million(S.D.5$1,054million).
CharacteristicsofRespondingIndividuals
Mostfrequentorganizationaltitlesofrespondents:
a.Financialcontroller
b.Informationsystemsmanager
c.Chieffinancialofficer
Averagetimeofemploymentofrespondentsintheirorganizations:
LengthofUseofInformationSystems
AveragetimeperiodofuseofAISsinrespondingorganizations:
AveragetimeperiodofuseofEDIsystemsinsalesarea:
AveragetimeperiodofuseofEDIsystemsinpurchasingarea:

600
19
13
10

110
20%
60
28
15
17
120

10.04years(S.D.57.50)

withinformationprovidedbyEDIsystems, Information
one item for each of the followinginterdependence is
organizational areas: accounting,defined as the extent
procurement,

shipping/distribution,ofrequiredinformation

45
40
28

16.06years(S.D.57.95)
4.83years(S.D.55.11)
2.67years(S.D.53.71)

A.I.Nicolaou/InternationalJournalofAccounting
InformationSystems1(2000)91105

reporting/ budgeting,
temsareprimarilyinfluencedbycontextual payments (financial
factorsthataffectaccountingprocessesfor EDI), and production
transaction processing, reporting, internalplanning (similar
control, process monitoring, andscales were used by
performanceevaluation.ThesecharacterisPremkumar et al.,
tics can capture the range of potential1994).Allitemsused
contextualinfluences.
to measure AIS
TheintegrationofAISapplicationswas Integrationareshown
measuredbytheextentofstandardizationininPanelBofTable2.
codingschemesandbytheextenttowhich Responses on all
application systems adhere to standarditems were measured
coding schemes. These two items were on a 5point scale
developedinthisstudyandwerebasedon with none to very
theoperationalconceptofdataintegration, large

extent
whichreferstotheuseofcommonfield endpoints.
definitionsandcodesacrossdifferentparts
oftheorganization(Goodhueetal.,1992,3.2.3.Information
294). Another six items were used tointerdependence
measuretheextentofintegrationoftheAIS (INFDEP)

(42)
558
120
22%

97

sharing between pairs

of organizational
functions that are
supported by AIS ap
plications.Applications
in an AIS were
identified by a large
scale study in the
United States to relate
to the following four
areas: (a) accounting,
(b)procurement,
(c)
shipping/distribution,
and

(d)
reporting/budgeting
(Deloitte and Touche
LLP and Hyperion
Software,1995).These
areas encompass a set
ofinteractingactivities
that share financial
information processed
by an AIS. The

resultingsixpairsarepresentedonPanelCof extent of use of

Table 2. Responses were measured on a 5 formal policies and
point scale with none to very large extentprocedures in the
endpoint.
organization, the

of
Prioraccountingstudieshaveusedasinglemonitoring
item to measure task interdependence (e.g., compliance to estab
Kim, 1988) or a dichotomous measure of lished policies and
workflowinterdependence(e.g.,Chenhalland procedures, and the
Morris,1986).Thisstudyfurtheradvancesthe existence of penalties
approachofGovindarajanandFisher(1990),incaseproceduresare
where interdependence was measured as the not followed. The
extent of resource sharing among scaleitemsareshown
organizationalsubunits.Thepresentapproach inPanelDofTable2.
directly relates interdependence to
requirements for organizational coordination 3.2.5.
andcontrolthatarerelevanttothedesignof Interorganizational
dependence.
anAIS.
Thetwodimensions
3.2.4.Organ
from Pfeffer and
An existing scale that was developed by
Salanciks (1978)
HageandAiken(1969)wasemployedinorder
resource dependence
tomeasureorganizationalformalization.The
model were used as
scalemeasuresthe
measures

of
interorganizational
dependence. The first
dimension of resource
importance (RESIMP)
was measured by two
items, shown on Panel
EofTable2,thatelicit
responses about the
extent of use of EDI
systems. These two
items were developed
by Premkumar et al.
(1994). The second
dimensionofdiscretion
over resource access
and use (RESACC)
was measured by the
next three items in
PanelEofTable2.The
items measured the
extent to which a
common

EDI
communication
standardwas followed,
or whether a
proprietary format was
required

for
communication. The
use of firm specific,
proprietary formats
result in EDI systems

that are specific to a

particular trading
partner. A number of
industries, as for
example, in the
automotive industry,
have

already
established their own
communicationformats
in order to avoid
problems

with
proprietary systems.
The third item
measuredtheeasewith
which alternative EDI
links can be
established, which also
depends to a large
extent on the use of
common
communication
formats.

3.3.Themodel
The research
hypothesis was tested
using a deviation
score

approach
(Drazin and Van de
Ven, 1985). The
deviation

score
approach examines
the extent of
departure, or lack of
fit, from an ideal
linear relationship
between context and
design variables
(Drazin and Van de
Ven, 1985, 519). In
the single ideal rela
tionship, lackoffit is
equal to zero. For
simplicity in model
development,
therefore, the ideal
relationship

is
assumedlinearsothat
the ideal estimate for
lackoffit can not
take a nonzero value
due to the selection
of model form from
manyalternatives(for

example,fromdifferentcurvilinearformsofhigher the degree of

the relationship). The degree of fit or system fit and the
departurefromtheidealrelationshipwillbe higher

the
measured by the absolute value of the performance or AIS
residuals of the regression of AIS inteeffectiveness. At a
gration on the three contingent variables. second step in the
The lower the degree of departure, the analysis, therefore,

AISeffectivenesswill
be regressed on
system fit. The main
effectsofthevariables
determiningsystemfit
willalsobecontrolled
forinthemodel.

98

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

Table2
Responsescales
PanelA:AISEffectiveness
UserInformationSatisfaction(UIS)Items:a
FortheAISoverall:

1. doyouthinktheoutputispresentedinausefulformat?
2. areyousatisfiedwiththeaccuracyofthesystem?
3. istheinformationclear?
4. isthesystemaccurate?
5. doesthesystemprovidesufficientinformation?
6. doesthesystemprovideuptodateinformation?
7. doyougettheinformationyouneedintime?
8. doesthesystemprovidethepreciseinformationyouneed?
9. doestheinformationcontentmeetyourneeds?
10. doesthesystemprovidereportsthatseemtobejustaboutexactlywhatyouneed?
11. isthesystemuserfriendly?
12. isthesystemeasytouse?

PerceivedMonitoringEffectivenessItemsb
FortheAISoverall:

1. controlreportsareprovidedfrequentlyonasystematic,regularbasis,e.g.,daily,weeklyreports.
b.allinall,ourAISprovidesinformationusefulfortheongoingmonitoringofdecisionsandactions.
Panel B: Scale Measuring AIS Integration (AIS
INT)ExtentofstandardizationofyourAIS:
a.standardizationincodingschemesacrossfunctionaldatabases.
b.applicationsystemsadheretostandardcodingschemes.
ExtenttowhichEDIinformationisintegratedwithinternalapplicationsystemsinthefollowingareas:
3. Accounting.
4. Procurement.
5. Shipping/Distribution.
6. Reporting/Budgeting.
7. Payments(financialEDI).
8. Productionplanning.
PanelC:ScaleMeasuringInformationInterdependence(INFDEP)c
Extentofrequiredinformationsharingbetweenthefollowingpairsoforganizationalfunctionsfortheexecutionof
organizationaltasks:

1. AccountingandProcurement.
2. AccountingandShipping/Distribution.
3. AccountingandReporting/Budgeting.
4. ProcurementandShipping/Distribution.
5. ProcurementandReporting/Budgeting.
6. Shipping/DistributionandReporting/Budgeting.
PanelD:ScaleMeasuringOrganizationalFormalization(FORMAL)d
Inmyorganization:

1. whateversituationarises,wehavepoliciesandprocedurestofollowindealingwithit.
2. whenrulesandproceduresexisthere,theyareusuallywritten.
3. theemployeesherearemonitoredforcompliancewithestablishedprocedures.

4. therearestrongpenaltiesforfailuretocomplywithestablishedprocedures.
5. therulesareignoredandinformalagreementsreachedtohandlesomesituations.
(continuedonnextpage)

tegration(AISINT)and
the two items of user
perceptions about the
4.1.Factorialstructureofnewscalesnotvalidatedin
monitoringeffectiveness
priorresearch
of the system.
Newitemsweredevelopedinthisstudytomeasure Exploratory principal
the constructs of resource accessibility (RESACC),component analysis on
informationdependence(INFDEP),AISin
RESACC and INF
DEP resulted in
satisfactory single
factor structures. The
highcorrelation(r5.70;
p < .0001)betweenthe
two items of perceived
monitoring
effectiveness and the
twelveitemUISscale
4.Results

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105
Table2
(continued)
PanelE:ScaleMeasuringInterorganizationalDependencee
ResourceImportance(RESIMP)Dimension
ExtentofuseofEDIsystems:

1. totalexternalpartners(thatcouldbeelectronicallylinked)thatarelinkedbyEDI.
2. total external documents (convertible to EDI) that are converted to

EDI.ResourceAccessibilityAndUse(RESACC)Dimensionf
ConcerningtheEDIsystemusedinmyorganization:

1. ourindustryemploysacommonEDIcommunicationstandard.
2. ourmajorEDIpartnersrequireuseoftheirinhouseproprietaryEDIformats.
3. establishmentofEDIlinkswithalternativepartnersiseasytodo.

points.
2

Responsesweremeasuredon7pointscalewithstronglydisagreeandstronglyagreeendpoints.

Responsesweremeasuredon5pointscalewithnoneandverylargeextentendpoints.

Source:Hage&Aiken(1969);responsesweremeasuredon7pointscalewithstronglydisagreeandstronglyagreeend
points;item(e)wasreversescored.
5

Source:Premkumar,Ramamurthy,&Nilakanta(1994);responsesweremeasuredon5pointscalewith none and very

largeextentendpoints.

6 Responsesweremeasuredon7pointscalewithstronglydisagreeandstronglyagreeendpoints;items(a)and(c)
werereversescored.
variablesmeasuredinthis
study. Table 4 presents
necessitatedtheexaminationofthefactorialstructureofall the
fourteen items within the same factor model. Principal
componentanalysiswithvarimaxrotationresultedintwo
interpretable factors, as determined by the screen test,
Bartletts x2 test on the number of factors, and the
eigenvaluegreaterthanonerule(Gorsuch,1983).Thetwo
factorsexplained65percentofthetotalvariance.Thefirst
factor included high loadings from ten items in the UIS
scale. The two accuracy items from the original UIS
scaleloadedheavilyonthesecondfactor,whichalsoin
cluded the two items of perceived monitoring effec
tiveness.Asaresult,twofactorsofAISeffectivenesswere
usedintheanalysis,onefactorthatincludeditemsrelating
tousersatisfactionwiththequalityofinformationoutputs,
hereafter called the UIS factor, and a second factor that
includedfouritemsrelatingtouserperceptionsaboutthe
accuracyofinformationoutputsandaboutthemonitoring
effectivenessofthesystem.Thisfactorishereaftercalled
thePMEfactorforperceivedmonitoringeffectiveness.
The AIS integration scale (AISINT) measures dif
ferentaspectsorcharacteristicsofanAIS.Asaresult,the
collectionofthoseitemslistedonPanelBofTable2are
not assumed to measure a latent construct of AIS
integrationwitherror,butratherareassumedtomeasure
different aspects of AIS integration (Gordon and Smith,
1992).TheuseoffactoranalysisinthecaseofAISINT
wasthereforenotconsideredappropriate.
Table 3 presents descriptive statistics for all the

resultsontheCronbach
a coefficientofinternal
consistency for each
scale as well as the
Pearson product
moment correlation
coefficients among the
researchvariables.
4.2.Constructvalidity
andreliabilityof
measures
The validity of
measures was evaluated
by confirmatory factor
analysis

(CFA).
Maximum likelihood
estimates of the CFA
model were obtained
using the LISREL 7
program. A series of ad
hoctestswereemployed,
as recommended by
Anderson and Gerbing
(1988)andBagozzietal.
(1991). The estimated
mea
Table3

Descriptivestatistics(N5110)

Scale
UIS
PME
AISINT

Numberof
scaleitems M
10
4
8

Rangeof
Observations
S.D.Minimum

3.56 0.68 2.3

5.58 0.98 2.6
2.14 0.88 1

Maximum
5
7
5

INFDEP
FORMAL
RESIMP
RESACC

6
5
2
3

3.59
4.03
2.84
3.19

UIS 5 userinformation
satisfaction; PME
5
perceived monitoring

0.98effectiveness; AISINT 5
1.28AIS integration; INFDEP
0.855 information dependence;
1.43FORMAL 5 organiza
tional formalization; RES
IMP5resourceimportance;
RESACC 5 resource
accessibility.

100

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

six comparisons, the

surement model for the four contingent 2
x
values were
variables(i.e.,INFDEP,FORMAL,RES
significantlyhigher(p
2
IMP,andRESACC)hadax fit(df599),.001),supportingthe
of172.78andanoncentralizednormedfit discriminating va
indexof.91,whichexceedsthethresholdof lidity of the four
.90recommendedbyBagozzietal.(1991)scales. In conclusion,
for good fit. The value of the root mean withtheexceptionof
square residual (RMSR) was .085, where the RESACC scale,
valueslessthan.10indicategoodfit.
all other latent con
Threetestsofconvergentvaliditywere structs exhibited
assessed. First, the tvalues of alladequate levels of
standardized loadings were statisticallyreliability

and
significant (p , .001). Second, compositeconstruct validity.
reliabilities, which are analogous toDue to the poor
Cronbachacoefficients,wereabove.80for reliability and weak
three of the latent constructs (INFDEP, construct validity of
FORMAL,andRESIMP),exceedingthe.the RESACC scale,
70 threshold for adequate internal scale the three individual
consistency set by Nunnally (1978, 245 items that comprised
246). For RESACC, composite reliabilitythescalewereusedin
wasat.62,aresultthatmightbeallowed hypothesis testing
foranewscalealthoughanindicatoroftheinstead of the
need for future improvement. Third, the summatedmeasure.
varianceextractedestimateforeachlatent
4.3.Testofcommon
variable, which represents the amount of methodbias
variance accounted for by the factor in
relation to the variance due to random Totestforcommon
measurement error, with the exception of methodbias,thefitofa
RESACC,wasgreaterthanthelevelof.50singlefactormodelfor
recommended by Fornell and Larckerthe independent and
(1981).ForRESACC,theestimatewasat. dependent variables
40,alsoanindicatoroftheneedforfuture(the common methods
hypothesis), was
improvement.
Two additional tests were performed tocomparedtothefitofa
assessthe discriminating validityofthe four sixfactor model in
latentconstructs.Inthefirsttest,a95percent which the items
confidence interval around the correlation measuring INFDEP,
estimatebetweeneachpairoffactorsdidnot FORMAL, RESIMP,
containthevalueofone.Inthesecondtest,the RESACC, UIS, and
estimated correlation parameter between two PME, were the six
constructswasconstrainedtoavalueofone factors.The

andax2differencetestwasperformedonthe sixfactor
2
(x

5
values obtained for the constrained and (391)
RMSR
5
unconstrainedmodels.Inall
provided

Table4
Pearsonproductmoment
correlationsandCronbacha
coefficients
Variables

UIS
PME
AISINT
INFDEP
FORMAL
RESIMP
RESACC
UIS5used

significantly better fit

tothedatathanthe

onefactor model
(x2(406) 5 2050.4;
RMSR 5 .149), thus
offering evidence that
commonmethod
variance

wasnotasignificant
concern.
4.4.Resultson
hypothesistesting
Thefirststepinthe
deviation

score
analysis involves the
estimation of the
linearrelationshipbe
tween AISINT and
the

contingent
variables,thatis,INF
DEP, FORMAL,
RESIMP, and the
three items of RES
ACC, that is, RES
ACC1, RESACC2,
and RESACC3. The
absolute value of the
residuals from this
model represents the
extent of system fit.
Table 5 presents the
results of the
regressionofAISINT
onthefourcontingent
variables.
The research
hypothesis was tested
by

estimating
regression models of
UIS and PME on
SYSTEM

model
817.7;
.089)

information INFDEP 5 informationdependence;

satisfaction; FORMAL
5
organizational
PME
5formalization; RESIMP 5 resource
perceived
importance; RESACC 5 resource
monitoring
accessibility.
effectiveness;
E
AISINT
5 n
AIS
t
integration;
r

i
e
s

o
n

t
h
e

d
i
a
g
o
n
a
l

a
r
e

C
r
o
n
b
a
c
h

o
e
f
f
i
c
i
e
n
t
s

o
f

i
n
t
e
r
n
a
l

s
c
a
l
e

c
o
n
s
i
s

t
e
n
c
y
.

S
i
g
n
i
f
i
c
a
n
t

a
t

t
h
e

.
0
5

l
e
v
e

l
;

*
*

S
i
g
n
i
f
i
c
a
n
t

a
t

t
h
e

.
0
1

l
e
v
e
l
.

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

data. As can be seen

fromPanelAofTable
6, the estimated
coefficientofsys
Independent
Parameterestimate
Standardized
temfitwasmarginally
variable
(tstatistic)
coefficient
significant(t(101)5
1.70,p,
Intercept
20.29 (20.57)
.10) in the regression
INFDEP
0.19 (2.36**)
0.21
FORMAL
0.13 (2.15**)
0.19
ofUISonsystemfit.
RESIMP
0.42 (4.43***)
0.41
In the regression of
RESACC1
20.02 (20.35)
20.04
PME on system fit,
RESACC2
0.04 (0.93)
0.09
however, the esti
RESACC3
20.01 (20.25)
20.02
mated coefficient of
INFDEP 5 information dependence;systemfitwashighly
FORMAL 5organizationalformalization;RES significant
IMP 5 resource importance; RESACC 5(t(101)53.22,p,.01).
resourceaccessibility.
Thisresultisshownin
F(6,103) 5 8.39***;Model R2 5 0.33;ModelPanel B of Table 6
and provides strong
AdjustedR250.29.
*Significantatthe0.10level;**Significant supportforthehy
Table5
EstimatedregressionmodelofAIS
integrationoncontingentvariables

atthe0.05level;***Significantatthe0.01level. pothesis

advanced
earlier in thestudy. In
both

regression
FIT, that is, the absolute value of the models,thedirectionof
residuals from the previous regression of theeffectswasasex

AISINTonthecontingentvariables.The
variablesdeterminingsystemfitwerealso
includedintheregressioninordertopartial
outtheirmaineffectsfromtheeffectofthe
fitvariable(see,forexample,Kims(1988)
approach). Two regression models were
estimated in order to test the research
hypothesis.Goodnessoffittestswerealso
performed on the error terms of both
regressionmodelsestimated(Neteretal.,
1985, 122123). In both cases, no
significantdeviationsfromnormalitywere
indicated.PanelAofTable6presentsthe
resultsofregressionmodelsestimatedfor
UIS andPanel Bof Table6 presentsthe
results for PME, the second dependent
variable.
Theresearchhypothesispredictsthatthe
degreeoffitofAISintegration(AISINT)
with the joint effect of information
interdependence (INFDEP) among
functional areas, organizational
formalization (FORMAL), and
interorganizationaldependence(RESIMP,
RESACC1,RESACC2,RESACC3),will
bepositivelyassociatedwithUISandPME,
the two factors of AIS effectiveness. The
hypothesis was partially supported by the

101

Table6
Estimatedregression
modelofAISeffectiveness
onsystemfit

Independentvariable
PanelA:Regressionof
UISonSystemFita
SystemFit
Intercept
INFDEP
FORMAL
RESIMP
RESACC1
RESACC2
RESACC3
AISINT
PanelB:Regressionof
PMEonSystemFitb
Intercept
Systemfit
INFDEP
FORMAL
RESIMP
RESACC1
RESACC2
RESACC3
AISINT

1
F(8,101)
5
5.10***; Model R2 5
0.29;ModelAdjusted R2
50.23.
2 Model
F(8,101) R2 5
5
5.78***;
0.31;ModelAdjusted
R2
50.26.
INFDEP
5
information dependence;
FORMAL 5 organi
zational formalization;
RESIMP 5 resource
importance; RESACC 5
resource accessibility;
AISINT
5
AIS
integration.

* Significant at the
0.10level;**Significant
at the 0.05 level; ***
Significant at the 0.01
level.

pected.

The
coefficient of system
fit is negative,
indicating that, as

Parameterestimate Standardize
(tstatistic)
coefficient

20.30 (21.70*)
3.08 (7.77***)
0.11 (1.70*)
0.14 (2.85***)
20.14 (21.73*)
20.03 (20.90)
20.01 (20.30)
20.06 (21.55)
0.18 (2.22**)

4.92 (8.79***)
20.40 (23.22***)
0.25 (2.72***)
0.22 (3.18***)
20.33 (22.84***)
20.10 (21.88*)
0.03 (0.66)
20.03 (20.63)
0.16 (1.44)

20.16
0.16
0.26
20.18
20.10
20.03
20.14
0.23

20.30
0.25
0.29
20.26
20.20
0.07
20.06
0.15

expected, a lower deviation in the samplewherehalfof

relationshipbetweenAISINTandthejoint theresponses(n555)
effect of the contingent variables is were used for
associatedwithahigherlevelofUISand estimation purposes
PME,thatis,AISeffectiveness.
andaholdoutsample
Additional tests were performed to (n 5 55)wasusedfor
avoidtheriskthatthehypothesiswastested hypothesis testing.
on the same sample that was used to The results were also
estimate system fit. These results were foundtoberobustina
foundtoberobustinarandomsplitofthe median split of the

sample, where the

estimationsamplewas
formed by those
responseswith scores
onUISandPMEthat
were above the
medianscore(n524).
In a further test,
organizational size
(defined as the
logarithmof

102

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

requirements has been

thenumberofemployees)wasenteredinto shown to contribute to

theestimationequationwithnosignificant satisfaction with the
changestotheresults.
accuracy of system
generated information,
as well as with satis
factionwithmonitoring
effectiveness.
This study examined the relationshipDecisions and actions
between the degree of fit between giving rise to costs at
organizational requirements forthe different stages of
coordinationandcontrolwiththedesignof the ordering, delivery,
an AIS and perceptions of effectiveness receiving, inspection,
about the system. Contingency theorystoring, and payment
servedasthebasisforthedevelopmentofprocesses can be more
thehypothesisinthestudy.Theresultsofeffectively controlled
thestudyindicatedthatinternaldependence through the use of
dueto
integrated systems.
(a) required information sharing acrossSuch benefits could
organizationalfunctions,(b)organizationalreducethetotalcostof
formalization, and (c) interorganizationalownership of raw
dependence in terms of both resource materials and provide
importance and accessibility, had a sig strategic advantages to
nificant effect upon the requirements for the organization
organizational coordination and control(Cooper and Kaplan,
that should be met by the design of the 1991).

5.Discussion,limitations,and
conclusions

system. The fit between AIS design and

The results of the
thoserequirementssignificantlycontributedstudy are also
to perceptions of monitoring effectivenessconsistent

with
and to perceptions about the accuracy ofinformation
information outputs. System fit, however,processing theory
failed to exhibit a strong effect on user (DaftandLengel,
informationsatisfaction,thatis,ontheper
ceived quality of information content
availableinsystemoutputs.
Theoverallresultsareconsistentwiththe
theoretical perspectives underlying the
conceptsexaminedinthestudy.Thetheoryof
resource dependence (Pfeffer and Salancik,
1978)explains the behavior of organizations
incaseswhereoneorganizationisdependent
uponanotherfor critical resources.Asinter
organizational EDI links become more
prevalent and organizations depend on them
for their survival, the requirements to
coordinate and control internal activities
becomemoreintenseifcontinuousflowofre
sourcesistobeensured.Themoreextensive
the use of EDI and the more dependent
organizations are on firmspecific
communication formats, the greater the
dependence and the need for internal
coordination.Thefitofthesystemwiththose

1986; Galbraith, 1973;

Tushman and Nadler,
1978), which posits
that, in the face of
uncertainty, organiza
tions will incorporate
informationprocessing
capacities in their
structures in order to
match information
processing
requirements.
Interdependent
processes among
functional areas can
create requirements for
informationsharingand
thedesignofintegrated
AISs that will satisfy
such requirements.
Adherencetorulesand
proceduresmayleadto
an increased need for
ongoing evaluations
and these results have
shown that, in such
cases,AISdesignmust
be responsive to those
requirements in order
for the system to be
perceivedaseffective.
The design of
integrated systems,
therefore,asaresponse
to such requirements,
maysatisfytheneedfor
improved accuracy in
informationsharingand
continuous monitoring,
andthusresultinmore
effectivesystems.
The lack of
significant results
betweensystemfitand
the concept of user
information
satisfaction might be
duetothechoiceofthe
research instrument
used to measure UIS.
Doll and Torkzatehs
(1988) instrument was
chosen because of

evidenceofitssuperiorpsychometricvalidity planning, investi

in the specific context of accounting gating, coordinating,
informationsystems(SeddonandYip,1992).andevaluating,asthey
Morerecentconceptualizationsofthesystemhave been specified in
effectiveness construct advance a concept of the

traditional
task/ technology fit, that is, information management literature
systems will have a positive impact on (Mahoneyetal.,1965)
performance only when there is a or in any management
correspondence between their functionality accounting text (e.g.,
andthetaskrequirementsofusers(Goodhue,Hilton,1997).
1995). The Doll and Torkzateh (1988) Likeallstudies,the
instrumentmighthaveprovidedtoolimiteda current study also has
measurement for an overall evaluation of its limitations due to
system functionality. It has provided user the methodology
evaluations for a wide range of information employed. For exam
characteristics, but a different focus might ple,thestudymeasured
havebeennecessary.Forexample,ameasure allresearchvariablesat
of system functionality might focus on the a single point in time
level of support that is provided to users in and used co relational
carrying out their managerial functions of

analysis.Thisapproach
limits statements about
causation. Use of
summated responsesto
questionnaireitemsthat
appear on the same
instrument always
entails some risks.
Responses could be
biased because of the
common method used
forthecollectionofall
data. Though care was
taken to extensively
validate these data
through psychometric
analyses, which have
not indicated any
violations of scale
validity,thiscriti

A.I.Nicolaou/InternationalJournalofAccountingInformationSystems1(2000)91105

examine the effect of

cism of the survey method can never becontingencies relating

completelyignoredandshouldbetakenintoto internal cost
account.Nonresponsehasbeenaproblem structure

and
in the data collection phase of this study. interorganizational
Nevertheless,alltestsfornonresponsebias cooperation through
haveprovidedsatisfactoryresults.
justintime exchanges

Despite the above limitations, this study on the implementation

has contributed useful results for both of cost management
professionals and researchers in AIS. systems.Theresultsof
Professionals can utilize the scales for AISthis study have
integration and AIS effectiveness that were demonstratedthefeasi
examinedinthisstudyinordertomeasureand bility as well as the
evaluate the level of satisfaction with annecessity of examining
existingsystem.Thisevaluationcouldalsobe multiple contingencies
performed within the context of a postin future research
implementation review, where the objective modelsofAISdesign.
might be to identify areas of concern that There are also a
should be addressed in future systemnumberofotheruseful
development projects. The importance of directions for future
using standardized scales in a post research. First, the
implementationevaluationcontextisthatthey study has relied on
promotelearningaboutthesystem.Thiseffect qualitative

or
is often difficult to measure, even though itperceptual measures of
represents a major purpose for post AIS effectiveness.
implementationreviews(ChenhallandMorris,Future research could
1993; Miller and Dunn, 1997). For examine the effects of
researchers, the concepts developed here, accounting system
particularlytheconceptofsystemintegration design choices on
and its fit with contingent variables, offerquantifiable measures
empiricallyobservableindicatorsthatcouldbe of firm performance,
examined in a postimplementation context. such as operational
The relationship between the evaluation of measuresof
postimplementation perceptions of
effectiveness and firm performance has not
been examined in past empirical research,
despiteitsimportancetoprofessionalsinthe
field. Although this study has also not
investigated this important relationship, it
provides some insights into this complex
question.Anyfutureresearcheffortaddressing
this relationship must consider the issue of
using AIS evaluation scales that were
validated in different contexts in order to
isolate the effect of system learning on a
firms operating performance. The
complexityofthisissueismanifestedbythe
factthatfirmperformancecouldnotonlybe
definedindifferentways,butitcouldalsobe
influencedby other factors confounding the
effectsofinterest.Theseconceptscouldalso
be incorporated in research models that

103

performance (e.g.,
inventory turns) as
well as profitability
measures (e.g., return
on assets employed).
Second,

the
measurement of
interorganizational
variablesneedstobe
refined and further
developed. Finally,
future research could
alsofurtherrefinethe
concept

of
organizational
coordination and
control and directly
define and measure
different types of
costs that relate to
such requirements.
Consequently, the
relationship between
system fit and AIS
effectiveness could
bemademoreexplicit
andcouldincorporate
direct types of costs
thatcouldbereduced,
eliminated,

or
displaced through the
use of appropriate
accounting
informationsystems.
In conclusion, the
centralissueofsystem
integration that was
examined in this study
hasbeendemonstrated
to be an important
concern,

both
empirically as well as
conceptually. The
respondents to this
study have indicated
their reliance on the
measure of system
integration in forming
theiropinionsaboutthe
effectivenessofanAIS.
This study is one of a
very few studies to

empirically examine the concept of AIS Schick,andRobertB.

integration and its relationship with Welker.
perceptions of AIS effectiveness. At the
conceptuallevel,AISintegrationsuccessfully
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