Risk and Conflict is Inherent in ERP organization Change

ERP Success Tolerance for Risk and ConflictERP organizational change success is categorically related to the tolerance for risk and conflict characteristics of the organizational culture. Some level of risk and conflict is inherent in ERP organization change. An organizational culture with a tolerance for risk and conflict is more conducive to success as long as properly recognized and managed. In part, healthy culture that advocates for tolerance require that stakeholders have accurate information, stakeholders are bias-free, and the environment is conducive to acceptance, empathy, and trust (Mezirow,1997, 2000).

Tolerance for Conflict and Risk Means Higher Potential for ERP Success

As an example, Ke and Wei (2008) state that it is critical that researchers examine how effective leadership and healthy organizational culture promote an environment that will facilitate and support ERP organizational change. Therefore, the purpose of the work of Ke and Wei (2008) was to suggest explicit relationships between leadership, organizational culture, and ERP organizational change success. ERP organizational change is likely to fail when the organizational culture required for such a change is in contrast to the actual organizational culture (Ke & Wei, 2008). The model of Ke and Wei (2008, p. 212) contained several propositions, one of which was that organizations with a higher level of tolerance for conflict and risk have a higher potential for ERP organizational change success.  In order to realize the benefits of changes enabled by strategic ERP organizational change, the organization must challenge the status quo and potentially redesign business processes which in turn can cause significant disruption and conflict (Ke & Wei, 2008).  A corporate culture that is accepting of conflicts promotes creativity and innovation (Ke & Wei, 2008). Ke and Wei (2008) also note how a culture’s support of productive conflict allows the organization to be better prepared during the post-go-live productivity decrease. Ke and Wei (2008) suggested theoretical contributions and proposes that the value an organization places on tolerance for risk and conflicts can have a direct impact on ERP organizational change.

Turf Battles and Jousting

Here is a powerful statement from a recent research interview with an experienced private equity executive. Organizational culture assessment matters as it allows organizations to better understand their current “temperature” in terms of tolerance for conflict and risk. This quote is 1) a consistent theme across promising practice organizations, 2) illustrates the challenges around conflict, and 3) underscores the value of creating a culture that promotes productive conversation, tolerance for risk and conflict, and proper management of risk and conflict. (Promising practice organizations are ones that have realized ERP organizational change success.)

That is <ERP Organizational Change> a pretty fruitful growing medium for turf battles, jousting, and passive aggressive undermining. I mean, so, as a classical matter, if you think about it, you know, a substantial implementation of anything…You know we’re going through stages of growth where you have different imperatives and dynamics around, around management and particular functions. You know those are pretty ripe testbeds for creating counterproductive hate. And, bringing out some of the worst in people. So, it makes a big difference how you address and incentivize and communicate. And I think culture, culture is a big part of that.”

The Take-A-Way

Does your plan consider concrete action for sharing this key notion and for addressing tolerance for risk and conflict?

by Dr. Jack G. Nestell

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Ke, W., & Wei, K. K. (2008). Organizational culture and leadership in ERP implementation. Decision Support Systems, 45(2), 208–218. https://doi.org/10.1016/j.dss.2007.02.002

Mezirow, J. (1997). Transformative learning: Theory to practice. New Directions for Adult and Continuing Education, 1997(74), 5–12. https://doi.org/10.1002/ace.7401

Mezirow, J. (2000). (Manuscript submitted for publication). Learning as Transformation [The Jossey-Bass Higher and Adult Education Series, ERIC.]. Critical Perspectives on a Theory.