Impact of parent-subsidiary conflict on ERP implementation

Abstract

Purpose – In spite of the large body of literature on success factors of enterprise resource planning (ERP) implementation, there is a need to explore its multinational dimension. The purpose of this paper is to explore the impact of the conflict between parent and subsidiary on the process of ERP implementation in a multinational enterprise (MNE). Design/methodology/approach – Using an interpretive case study methodology, this paper analyses the theoretical frameworks of parent-subsidiary conflict and applies them to interpret an in-depth case study and generate a set of managerial prescriptions. Findings – Theoretical analysis and case evidence suggest that managing parent-subsidiary conflict is a critical success factor of ERP implementation in MNEs. Research limitations/implications – This case relates to a diversified multinational group producing a variety of materials through subsidiaries. The data collection includes multiple sources in the company, and strong theoretical development provides a high level of generalizability. The paper shows that managers should consider the impact of conflict from the planning stages of any multinational ERP implementation. Practical implications – A detailed set of practical managerial prescriptions is derived from case and theoretical analysis. These prescriptions provide guidance to multinational managers planning a successful global ERP rollout. Originality/value – Although parent-subsidiary conflict is clearly a major factor in multinational ERP implementations, this topic has never been analysed in detail in the literature. This paper breaks new ground applying grounded theoretical frameworks of parent-subsidiary conflict to an implementation case, and providing managerial guidance for implementation decisions.