THE UNIVERSITY OF HULL Usage of and Satisfaction with Accounting Information Systems in the Hotel Industry: The Case of Malaysia being a Thesis submitted for the Degree of Doctor of Philosophy in the University of Hull By Ainon Ramli BSc Accounting, the University of Hull, UK MBA Accounting, Universiti Utara Malaysia February 2013 Acknowledgements Praise be to Almighty Allah, who gave me the opportunity, strength, courage and blessing to pursue this study I would like to acknowledge many people who significantly influenced my study with their support, advice, assistance, encouragement and prayers First of all, my deepest gratitude goes to my supervisor, Professor Emeritus Mike E Tayles, for his guidance, encourage, commitment and patience from the beginning of the study He has always been available, willing to help and motivate me throughout the research and thesis writing Working with him has been the greatest experience in my academic life and will benefit me forever His great professionalism is admirable My deepest appreciation also goes to Mr Tony Boczko, my second supervisor during the first year of study His ideas and commitment greatly helped to improve my study I would also like to acknowledge the role played by Dr Wendy Robson, who commented and shared her ideas about the research topic To the Hull University Business School (HUBS), thank you for providing facilities for PhD students that certainly had a big impact on our studies My study was made possible by funding from the Ministry of Education Malaysia and Universiti Malaysia Kelantan (UMK) I would like to thank Professor Emeritus Datuk Dr Zainai Mohamed, the first vice chancellor of UMK, Professor Dr Mohamed Dahlan Ibrahim, the Dean of the Faculty of Entrepreneurship and Business (FEB), Professor Madya Abdul Aziz Ab Latiff who helped me during the stage of preparing the proposal, and staff at the FEB who supported and helped me during hard times, especially Kak Moon, Kuji and Yus Also deep appreciation goes to the research respondents, who participated in the survey and interviews There are many friends who were directly or indirectly involved in my study life and provided help and support To mention a few, I am very much indebted to my special friend, who spent a lot of time listening and sharing happiness and sadness; thank you Mas To Damak who shared some moments of my lonely journey, to Alam who cheered up my life with fighting, to Salmi and Kak Za who helped me to understand PLS, to En Azli and Kak Zurinahni for their help, and to other friends who became part of this PhD experience Last, but not the least, my special acknowledgement goes to my understanding husband, Roslan Hashim, who gave me the spirit, inspiration, unconditional loves and prayers To my mother, who is my friend who shares everything in life, for her love, tremendous support, encouragement and prayers throughout this study Also to my siblings, Long, Ngah and Na, for care, support and prayers To all my nieces and nephews who make my life happy i Abstract In the last 20 years, organisations have invested heavily in Information Technology (IT) to support their businesses The work systems of organisations nowadays are increasingly IT-enabled The tourism industry in general and hospitality industry in particular is one of the industries that are much affected by the revolution of IT There have been made various calls for additional research to improve knowledge about the usage of and satisfaction with information systems (IS) in organisations This study is motivated by the lack of knowledge of the use of Accounting Information Systems (AIS) in the hotel industry, especially in developing countries Thus, this research attempts to fill a knowledge gap by exploring the adoption of AIS and the factors that influence usage of and satisfaction with the AIS, as well as the relationship between satisfaction with the AIS and its organisational impact, in Malaysia This study uses an extension of the Technology Acceptance Model (TAM) which is regarded as one of the most influential research models in explaining IT usage or acceptance behaviour in various contexts The research adopts a triangulation approach combining both a survey and interviews The data from the survey were collected through a postal questionnaire to senior accounting managers in three, four and five star rated hotels The data were analysed using Partial Least Squares (PLS) which is the PLS-Graph Beta Version 3.0 Semistructured interviews with managers in six hotels supplement the findings from the survey The interviews explained further, managers’ insights into experience and views as a means to triangulate the research The findings confirm the wide use of computerised accounting systems in three, four and five star rated hotels, although, the extent of the AIS use is relatively unsophisticated with the focus on basic accounting modules and fundamental accounting-based applications The main factors to influence perceived usefulness (PU) are perceived ease of use (PEOU), involvement and training The factors that influence PEOU are experience, external expertise and PU It is found that usage of the AIS, PU and PEOU significantly influence satisfaction with the AIS This study also provides positive support for a relationship between satisfaction with the AIS and organisational impact Despite the widely held belief that IT is fundamental to a firm’s survival and growth, previous studies struggled to link IT to organisational impact This research adds to existing studies about the usage of and satisfaction with IT/IS It provides further support to the TAM in terms of AIS in the hotel industry The findings from this study also provide awareness to academics and practitioners about the importance of IT/IS in general and AIS in particular to create competitive advantages and to improve firms’ efficiency and effectiveness, as well as to impact to overall firm performance ii Table of Contents Acknowledgements i  Abstract ii  Table of Contents .iii  List of Tables viii  List of Figures x  CHAPTER ONE 1  1.0  Introduction 1  1.1  Motivation and Background - The Importance of Accounting Information Systems (AIS) 2  1.2  The Research Location 7  1.3  Problem Statement 9  1.4  Research Questions 11  1.5  Contributions of Study 12  1.6  Outline of the Thesis 14  1.7  Summary of the Chapter 16  CHAPTER TWO 17  2.0  Introduction 17  2.1  IT and AIS in Hotel Operations 18  2.2  The Theories Applicable to the Study 23  2.2.1  The Theory of Reasoned Action (TRA) 23  2.2.2  The Technology Acceptance Model (TAM) 25  2.2.3  TAM2 and Subjective Norm 31  2.3  Satisfaction with IS 34  2.4  Organisational Impact 39  2.5  The Proposed Conceptual Model 42  2.6  Hypothesis Development 47  iii 2.6.1  External Factors 50  2.6.2  Internal Dynamics 66  2.7  Summary of the Chapter 77  CHAPTER THREE 78  3.0  Introduction 78  3.1  Research Philosophy 79  3.2  Research Approach 86  3.3  Research Strategy and Data Collection Methods 87  3.3.1  Survey Instrument 88  3.3.1.1  3.3.2  3.4  Questionnaire Design 91  Semi-structured interviews 97  Data Analysis 98  3.4.1  Survey Data Analysis 99  3.4.2  Semi-structured Interviews 108  3.5  Summary of the Chapter 110  CHAPTER FOUR 112  4.0  Introduction 112  4.1  The Survey 112  4.2  Descriptive Analysis 119  4.2.1  Profile of the Respondents 119  4.2.2  Profile of the Responding Hotels 123  4.2.3  Output – Organisational Impact 125  4.3  Descriptive Statistics 128  4.3.1  External Factors 128  4.3.2  Internal Dynamics and Output 130  4.4  AIS Use by the Responding Hotels 132  4.5  Sophistication of AIS and IT in the Responding Hotels 133  4.6  Data Preparation 142  iv 4.6.1  Missing Data 142  4.6.2  Outliers 142  4.6.3  Testing the Assumptions 143  4.7  A Preliminary Analysis of Correlation 146  4.8  Summary of the Chapter 149  CHAPTER FIVE 150  5.0  Introduction 150  5.1  Validation of External Factor Constructs 152  5.1.1  Factor Analysis 152  5.1.2  Convergent and Discriminant Validity 158  5.2  Validation of Internal Dynamics and Output Constructs 162  5.2.1  Perceived Usefulness (PU) and Perceived Ease of Use (PEOU) 162  5.2.2  Usage and Satisfaction 163  5.2.3  Output – Organisational Impact 163  5.2.4  Factor Analysis for Internal Dynamics and Output 164  5.2.5  Internal Consistency 168  5.2.6  Discriminant Validity 168  5.3  Summary of Regression Results 170  5.4  Summary of the Chapter 171  CHAPTER SIX 172  6.0  Introduction 172  6.1  The Results of the Proposed Conceptual Model 172  6.2  The Conceptual Model: Sub-Test (Satisfaction to Usage& Usage to Impact) 181  6.2.1  Internal Dynamics - Indirect Effects 186  6.3  The Conceptual Model: Sub-Test (PU to PEOU) 187  6.4  The Conceptual Model: Sub-test (TMS to PEOU) 191  6.5  The Conceptual Model: Sub-Test (Training to PU) 194  6.6  Summary of the Chapter 197  v CHAPTER SEVEN 200  7.0  Introduction 200  7.2  Background of the Case Hotels 201  7.3  AIS in the Hotel Industry 207  7.4  External Factors to Influence PU and PEOU 211  7.4.1  Top Management Support (TMS) 211  7.4.2  Information Systems Sophistication (ISS) 214  7.4.3  Involvement 216  7.4.4  Training 218  7.4.5  Experience 221  7.4.6  Internal Expertise 222  7.4.7  External Expertise 225  7.5  The Internal Dynamics of the AIS 226  7.5.1  The Impact of PU on Usage and Satisfaction 226  7.5.2  The Impact of PEOU on Usage and Satisfaction 228  7.5.3  Usage and Satisfaction 230  7.6  Output - Organisational Impact 231  7.7  Summary of the Chapter 233  CHAPTER EIGHT 235  8.0  Introduction 235  8.1  The Status of AIS adoption in the Hotel Industry 235  8.2  Discussion on Usage of and Satisfaction with AIS 240  8.2.1  The Influence of External Factors on PU 242  8.2.2  The Influence of External Factors on PEOU 248  8.2.3  The Influence of PU and PEOU on Usage 254  8.2.4  The Influence of PU, PEOU and Usage on Satisfaction with the AIS 257  8.2.5  The Influence of Satisfaction with the AIS on Organisational Impact 261  8.3  Summary of the Chapter 264  vi CHAPTER NINE 265  9.0  Introduction 265  9.1  Implications of the Research 265  9.2  Originality of the Research 270  9.3  Limitations and Areas of Future Research 272  9.4  Closing Remarks 277  References 278  Appendices 296  Appendix 1: Developing Countries - Criteria and Comparison 296  Appendix 2: Cover Letters and Questionnaire 297  Appendix 3: Interview Schedule 307  Appendix 4: Normality Tests 310  Appendix 5: Conceptual Model – sub-tests 313  vii List of Tables Page Chapter One Table 1.1: Tourist arrivals and receipts Table 1.2: The components of tourist expenditure Table 1.3: The list of hotels, apartments and orchids as at February 2012 8 Chapter Two Table 2.1: Definitions of core constructs in the TAM 27 Chapter Three Table 3.1: Assumptions of the Positivist Paradigm Table 3.2: The differences between Positivism and Interpretivism Table 3.3: ‘Soft versus Hard’ Research Dichotomies Table 3.4: The survey instrument and sources Table 3.5: PLS versus LISREL Table 3.6: Qualitative data analysis: content versus grounded methods 81 83 85 95 100 108 Chapter Four Table 4.1: Current job title Table 4.2: Level of education Table 4.3: Number of years in hotels Table 4.4: Number of years in current position Table 4.5: AIS experience Table 4.6: Profile of the responding hotels Table 4.7: The extent of AIS impacts Table 4.8: Descriptive statistics for external factors Table 4.9: Descriptive statistics for internal dynamics and output constructs Table 4.10: Types of AIS Table 4.11: The criterion variables of IT sophistication Table 4.12: Types of IT Table 4.13: Total number of ITs adopted Table 4.14: Types of processing Table 4.15: Types of computer application Table 4.16: Total number of applications conducted Table 4.17: Sources of software Table 4.18: Types of IT planning undertaken Table 4.19: Total number of types of IT planning conducted 118 119 119 120 120 123 126 128 130 131 133 133 134 135 136 137 138 139 140 Chapter Five Table 5.1: Purification for items of external factors Table 5.2: KMO and Bartlett's Test applied to external factors Table 5.3: Rotated Component Matrix Table 5.4: Guidelines for identifying significant factor loadings based on sample Size Table 5.5: Cronbach’s Alpha and loadings for the three constructs Table 5.6: Individual item reliability for the constructs Table 5.7: Internal validity for external factor constructs Table 5.8: Discriminant validity Table 5.9: SPSS and PLS loadings for the external factor constructs Table 5.10: Final validation of external factor constructs Table 5.11: Purification for items in the five constructs Table 5.12: KMO and Bartlett's Test for the 28 items Table 5.13: Factor loadings for the five constructs Table 5.14: Individual item reliability for the five constructs Table 5.15: Internal consistency viii 152 153 154 155 156 157 158 159 160 161 163 164 165 166 167 Table 5.16: Convergent validity Table 5.17: Discriminant validity Table 5.18: Results of regression 168 168 169 Chapter Six Table 6.1: Summary of the tests of the study Table 6.2: Summary of the results for the proposed main conceptual model Table 6.3: Summary of the results for usage to satisfaction Table 6.4: Summary of the results for satisfaction to organisational impact Table 6.5: Direct and indirect effects of selected variables Table 6.6: Summary of the results for PEOU to PU Table 6.7: Summary of the results for TMS to PU Table 6.8: Summary of the results for training to PEOU 174 179 181 183 186 186 190 193 Chapter Seven Table 7.1: Details of the interviews 200 Chapter Eight Table 8.1: Summary of results for PU Table 8.2: Summary of results for PEOU Table 8.3: Summary of results for impact on usage Table 8.4: Summary of results for impact on satisfaction Table 8.5: Summary of results for satisfaction with the AIS Table 8.6: Summary of results for usage of the AIS Table 8.7: Summary of results for organisational impacts 247 253 256 256 258 258 262 Appendix Table A5.1: Summary of results for ISS to PU Table A5.2: Summary of results for involvement to PU Table A5.3: Summary of results for experience to PEOU Table A5.4: Summary of results for internal expertise to PEOU 312 315 318 321                         ix     We are pleased with the experienced of using AIS 256 101 000 869 101 000 We are satisfied with AIS effectiveness 278 101 000 853 101 000 AIS has met our expectation 258 101 000 809 101 000 Overall, we are satisfied with AIS 318 101 000 814 101 000 TM makes an effort to provide stable funding for AIS development and operation activities 218 101 000 882 101 000 TM takes part in deciding in what order AIS should be implemented 180 101 000 865 101 000 TM is much concerned with the performance of AIS operation .247 101 000 877 101 000 TM strives to have latest technology .233 101 000 897 101 000 Internal training of AIS is provided for accounting staffs 253 101 000 841 101 000 There are clarity of end-users’ role and objectives before training 250 101 000 871 101 000 IT support after training is available 218 101 000 869 101 000 Training programs precede effective AIS usage 280 101 000 861 101 000 Accounting staffs are involved in choosing and/or design of AIS 230 101 000 911 101 000 Accounting staffs guide and direct the process of specifying and clarifying the input requirements and details for the AIS 212 101 000 889 101 000 Accounting staffs guide and direct the process of specifying and clarifying the output requirements and details for the AIS 203 101 000 905 101 000 Accounting staffs are involved in any modification and/or changes in AIS 218 101 000 895 101 000 250 101 000 849 101 000 Top management (TM) support Training Involvement IS sophistication The hotel shares databases for various applications, rather than having a separate database for each application 311 There are integrated IS applications encompassing different functional areas 221 101 000 874 101 000 This hotel manages hotel-wide communication network services 234 101 000 856 101 000 This hotel has a good telecommunication infrastructure 222 101 000 885 101 000 The accounting staffs are adequate to manage tasks 281 101 000 848 101 000 The management are satisfied with the services provided by accounting staffs 259 101 000 859 101 000 The accounting staffs are skilful at using AIS 268 101 000 863 101 000 The IT staffs are adequate to support the accounting system services 226 101 000 871 101 000 Internal expertise External expertise Consultants 409 101 000 610 101 000 Vendors / dealers 496 101 000 476 101 000 Government agencies 449 101 000 567 101 000 Accounting / auditing firms 343 101 000 636 101 000 Our experience in using AIS 325 101 000 764 101 000 Our experience in implementing AIS 279 101 000 814 101 000 Our experience in maintaining / modifying AIS 237 101 000 862 101 000 Overall, our AIS ability 299 101 000 807 101 000 Reduced operating costs 228 101 000 875 101 000 Improved service quality 265 101 000 834 101 000 Improved operating performance 267 101 000 814 101 000 Improved public image and client’s loyalty 189 101 000 929 101 000 Improved sales growth 190 101 000 922 101 000 Improved overall performance of the hotel 232 101 000 837 101 000 Experience Organisational impact     312 Appendix 5: Conceptual Model – sub-tests Appendix 5-1 This appendix explains four further robustness tests to demonstrate that there is no simple way to improve the main proposed conceptual model Appendix 5-1A: The Conceptual Model Sub-Test A (ISS → PEOU) In the main model and all previous sub-tests to in chapter 6, information systems sophistication was linked with PU The summary of the results were as follows: Table A5.1: Summary of results for Information Systems Sophistication → Perceived Usefulness Conceptual model in chapter Beta value T-value Sig Sig Level Main model (H2A) -0.154 2.3653 Yes 0.05 Sub-test (H2B) -0.154 2.3659 Yes 0.05 Sub-test (H2C) -0.004 0.7086 No - Sub-test (H2D) -0.112 1.6559 Yes 0.10 Sub-test (H2E) -0.207 3.1144 Yes 0.01 The above Table A5-1 shows that the impact of information systems sophistication resulted in a negative influence when related to PU In all attempts only one resulted in a not significant impact on PU In this sub-test A, information systems sophistication was changed to link with PEOU (Figure A6.1) The new path connecting information systems sophistication with PEOU (H2F) generated a non-significant relationship with a co-efficient of 0.097 and t-value of 0.7122 Therefore the hypothesis is rejected The only path that is affected by the above change is that of involvement with PU In previous attempts involvement is seen to significantly impact PU at p-value < 0.05 (eg H3A in the main model), however, in this attempt, involvement reduced to only provide 313 some qualified support over PU at p-value < 0.10 Other remaining hypotheses show no impact regarding this change The R2 value for PU reduced from 72.8% in the previous tests to 71.2% in Figure A5.1 The R2 value for PEOU shows very little incremental change with association of ISS Other R2 values remain the same as before with usage (55.9%), satisfaction (77.5%) and organisational impact (24.1%) Therefore, it can be concluded that, this sub-test A cannot improve the proposed main conceptual model 314 Top Management Support (TMS) Involvement H1F 0.058(0.8719) H3F 0.130(2.1225)** Perceived Usefulness (PU) R2 = 0.712 H11F 0.302(2.5788)** H9F 0.530(4.2741)*** Information Systems Sophistication (ISS) H8F 0.762(14.3085)*** H2F 0.079(0.7122) Training H4F 0.057(0.5732) H10F 0.275(2.2340)** H13F 0.414(5.0680)*** Satisfaction R2 = 0.775 H14F 0.491 (5.8291)*** H12F 0.242(2.1395)** Perceived Ease of Use (PEOU) R2 = 0.487 Experience H5F 0.179(2.0839)** Internal Expertise Usage R = 0.559 H6F 0.539(6.2224)*** Figure A5-1: The Proposed Conceptual Model – Sub-test A *** significant at p-value < 0.01; ** significant at p-value