Chief financial officer (CFO) characteristics and ERP system adoption: an upper-echelons perspective

Structured Abstract Purpose: This paper examines the relationship between characteristics of chief financial officers (CFOs) and Enterprise Resource Planning (ERP) system adoption. Following upper echelons theory, we theorize that CFO age, education, tenure, and recruitment influence ERP system adoption and that this relationship is moderated by the CFO being responsible for firm-wide IT functions. Design/methodology/approach: Our empirical analysis is based on a survey of 296 large and medium-sized Austrian firms. Logistic regression analyses were used to test the association between CFO characteristics and ERP system adoption. Findings: We find that firms with externally recruited CFOs have adopted ERP systems significantly more often than firms with internally promoted CFOs. Surprisingly, our results indicate that firms with less-educated CFOs more often adopted an ERP system and that the relationship between CFO characteristics and ERP system adoption is not moderated by the CFO being responsible for IT. Research limitations/implications: Our paper adds to the literature by corroborating case-based evidence that CFOs and their characteristics influence ERP system adoption. Extending previous research which indicates that CFO characteristics influence accounting practices, we show that CFO characteristics also influence technological innovation such as the adoption of ERP systems. Future research on technological innovation may therefore pay closer attention to the influence of CFOs. Originality/value: This article is the first to quantitatively test the influence of CFO characteristics on ERP system adoption. Keywords: Chief Financial Officer, CFO, Enterprise Resource Planning, ERP, Upper Echelons, Technological Innovation Paper type: Research paper