This research focuses on the investigation of the reciprocal influence between the relationships of parent and subsidiary company of corporate groups and the implementation of the Enterprise Systems in subsidiary company. Pertinent to the exploration is how power differential being transpired in the relationships between a holding and subsidiary company of corporate groups during the implementation of Enterprise Systems.
The literature on corporate groups indicates that the relationships between holding and subsidiary companies in the corporate groups are ingrained with power that is associated with the authority, control, and the ability to influence. The aim of this research is to investigate the key aspects of the relationship between parent and subsidiary companies in corporate groups and their impacts on organisation’s Enterprise Systems adoption and implementation. This research also anticipated Enterprise Systems to be one aspect that drives the change in the relationship between parent and subsidiary company.
An interpretive paradigm is the assumed philosophical stance in this research. The case study research method with embedded cases was chosen as the main research approach. Two case studies with five embedded cases were explored. The participating corporate groups were a privately-owned corporate group and a state-owned corporate group in Indonesia. Semi-structured interviews were used for data collection and qualitative content analysis technique was used in analysing the interview data.
The outcome of the investigation demonstrates three aspects in the relationships between a parent and subsidiary company of corporate groups during the implementation of Enterprise Systems that may be beneficiary for practitioners and researchers interested in the use of IS/IT (particularly in developing countries). The holding company should consider the individual business requirements and the “uniqueness” of the subsidiary company in issuing directives for the implementation of Enterprise Systems in subsidiary companies. The second aspect underlines the importance of the holding company to provide strategic directives to achieve the corporate group vision while facilitating and/or enabling the achievement of the subsidiary’s own business objectives. The third emphasises on the importance of the communication between corporate group members, particularly in the design and implementation of the appropriate Enterprise Systems.
Table of Contents
CHAPTER 1 INTRODUCTION
1.1 Introduction
1.2 Research Motivation
1.3 Research Objectives
1.4 Research Questions
1.5 Research Design Outline
1.6 Outline of the thesis
CHAPTER 2 LITERATURE REVIEW
2.1 Introduction
2.2 Corporate Groups
2.2.1 The definition of corporate groups
2.2.1.1 The significance of the ownership and control
2.2.1.2 Corporate group as a legal entity as well as an economic entity
2.2.2 Entities of the Corporate Group
2.2.2.1 Holding/parent companies
2.2.2.2 Subsidiary/controlled entities
2.3 Organisational Power, Power Differential, and Control
2.3.1 Organisational Power
2.3.2 Power Differential
2.3.3 The Concept of Control
2.4 Definition and Characteristics of Enterprise Systems
2.5 Power and Information Systems
2.5.1 IT Governance
2.5.1.1 Definition
2.5.1.2 The three modes of IT governance
2.6 The Theoretical Construct for this Research
CHAPTER 3 RESEARCH PARADIGM
3.1 Introduction
3.2 The paradigmatic standing of the research
3.3 The Methodological Considerations
3.4 The characteristics of the research
CHAPTER 4 RESEARCH DESIGN
4.1 Introduction
4.2 Defining a Case
4.2.1 Corporate group
4.2.1.1 The ownership of corporate-group entities
4.2.1.2 Control
4.2.1.3 Corporate group entities
4.2.2 The Enterprise Systems Projects
4.3 The Selection of the Case
4.4 Data collection strategy
4.4.1 Research Participants
4.4.2 Interview Protocol
4.5 The Design of Within Embedded-case Analysis
4.5.1 The development of categories
4.5.2 Diagnosing the instance of power in the text.
4.5.3 The explanation of the step by step analysis
4.6 The cross case analysis.
CHAPTER 5 THE VENTURES GROUP
5.1 The Holding Company of the Ventures Group
5.1.1 Short History of the Ventures Company
5.1.2 Profile of the interviewees of TVC
5.1.3 The position of the holding company
5.1.3.1 The power exercised by the Ventures Company.
5.1.3.2 Centralisation of IT Decision Making
5.1.3.3 Centralisation of control over IT resources
5.1.3.4 The expected competitive advantage of the Enterprise Systems.
5.2 Embedded Case 1: The Publishing and Printing Company
5.2.1 Short History of the Publishing and Printing Company
5.2.2 Profile of the Interviewees of the PPC
5.2.3 The themes emerged in data analysis.
5.2.4 The analysis of interviews of research participants of PPC
5.2.4.1 Perceived power differential in the relationship between PPC and TVC
5.2.4.2 Centralisation of IT decision making
5.2.4.3 Centralisation of control over IT Resources
5.2.4.4 The expected competitive advantage by the implementation of Enterprise Systems
5.2.4.5 The tendency of PPC to be compliant with the directives of TVC
5.2.4.6 Less influence of TVC on the specifications of business processes of the Enterprise Systems replacement
5.2.4.7 The Discussion
5.3 Embedded Case 2: Book Distribution Company
5.3.1 Short History of the Book Distribution Company
5.3.2 Profile of the Interviewees of the BDC
5.3.3 The themes emerged in the analysis.
5.3.4 The analysis of interviews with research participants of BDC
5.3.4.1 The perceived power differential in the relationship between BDC and TVC
5.3.4.2 Centralisation of IT decision making
5.3.4.3 The Distress Subsequent to the Implementation of Enterprise Systems.
5.3.4.4 The specification of business processes of Enterprise Systems
5.3.4.5 Centralisation of control over IT Resources
5.3.4.6 The expected competitive advantage of the adoption and implementation of Enterprise Systems
5.3.4.7 The Discussion
5.4 Embedded Case 3: Food Distributor Company
5.4.1 Short History of the Food Distributor Company
5.4.2 Profile of the Interviewees.
5.4.3 Data analysis according to the emerging themes
5.4.4 The analysis of interviews with research participants of FDC
5.4.4.1 Perceived power differential in the relationship between FDC and TVC
5.4.4.2 Centralisation of IT decision making
5.4.4.3 The expected competitive advantage of the adoption and implementation of Enterprise Systems
5.4.4.4 The concerns over the specification of business process by TVC
5.4.4.5 Centralisation of control over IT Resources
5.4.4.6 The bargaining over the provision of Enterprise Systems
5.4.4.7 The Discussion
CHAPTER 6 THE PORT MANAGEMENT GROUP
6.1 Introduction
6.2 The Port Management Corporation
6.2.1 Short History of the Port Management Corporation
6.2.2 Profile of the interviewees of PMC
6.2.3 The position of the PMC
6.2.3.1 The perceived power of the PMC relative to the subsidiaries.
6.2.3.2 The perceived control to subsidiary companies
6.2.3.3 The perceived advantages from the implementation of the Enterprise Systems
6.2.3.4 Decentralisation of the arrangement of IT activities and IT decision making.
6.3 Embedded Case 4: Medical Service Company
6.3.1 Short History of the MSC
6.3.2 Profile of the Interviewee
6.3.3 Data analysis according to the emerging themes
6.3.4 The analysis of interviews with research participants of MSC
6.3.4.1 Perceived power differential in the relationship between MSC and PMC
6.3.4.2 Perceived control of PMC over the MSC.
6.3.4.3 The expected advantage of the adoption and implementation of Enterprise Systems
6.3.4.4 Decentralisation of IT arrangement of the MSC
6.3.4.5 The Discussion
6.4 Embedded case 5: Terminal Management Company
6.4.1 Short History of the Terminal Management Company
6.4.2 Profile of the Interviewee
6.4.3 Data analysis according to the emerging themes
6.4.4 The analysis of interviews with research participants of TMC
6.4.4.1 Perceived power differential in the relationship between MSC and PMC
6.4.4.2 Perceived Control of PMC over TMC
6.4.4.3 The expected advantage of the adoption and implementation of Enterprise Systems
6.4.4.4 Decentralisation of IT decision making authority
6.4.4.5 The Discussion
CHAPTER 7 CROSS CASE ANALYSIS AND DISCUSSION
7.1 Introduction
7.2 The ownership and governance of the corporate groups
7.3 The use of Enterprise Systems to extend the power of the holding company.
7.4 Strengthen the link between subsidiary entities
7.5 Undermining the domination of the holding company
7.6 Impairing the control of the holding company
CHAPTER 8 ANSWERING THE RESEARCH QUESTIONS
8.1 Introduction
8.2 Response to the Research Questions
8.3 Reflections on the Research Objectives
CHAPTER 9 CONCLUSION, LIMITATION, AND FUTURE RESEARCH
9.1 Introduction
9.2 The conclusion of the research
9.3 Limitation and Future Research
Research Objectives and Themes
This research aims to investigate the reciprocal influence between parent-subsidiary company relationships within corporate groups and the implementation of Enterprise Systems in subsidiary companies, specifically focusing on how power differentials shape these dynamics.
- The influence of corporate group structure and governance on Enterprise Systems adoption.
- The role of organisational power, authority, and control in parent-subsidiary relationships.
- The impact of Enterprise Systems as a tool for control versus a source of integration.
- The dynamics of compliance, resistance, and bargaining in IT decision-making within corporate groups.
Book Excerpt
5.1.3.2 Centralisation of IT Decision Making
The source of authority of TVC over subsidiary companies has been elaborated in the previous section. The legitimation of TVC to exercise regulation over subsidiary companies was considerably profound. Further exploration of data interview indicates that corporate-group IT policy was the main foundation for regulation of the corporate-group over the provision of Information Systems / Information Technology. The ITM of TVC ascertained that the regulation encompasses the provision of IS/IT for the Ventures Group.
'(The IS/IT development policy) regulates that system development or a request of the subsidiaries over system development subject to the consent of (the IT department of) the holding company. It is an obligation (of the subsidiary companies to request for approval). Likewise for procurement (of the subsidiary company) in relation to the (information) systems that exceed a certain amount of money require approval of the CFO as the head of IT (function).' (ITM-TVC).
The centralisation of decision making over the provision of IS/IT in the Ventures Group was emphasised in the quote. The decision making was centralised to TVC to the extent that a new project of IS/IT provision subject to the approval of TVC. It has been argued that, within a centralised governance model, corporate IT has the authority to determine the area of IT activities namely: IT infrastructure, IT use management, and project management (Sambamurthy & Zmud 1999).
The exercise of authority of TVC was transpired in the implementation of corporate-group IS/IT policies throughout the corporate group organisations. The corporate-group IS/IT policies of TVC regulated a particular aspect of the subsidiary companies in relation with the provision and management of IT infrastructure, the provision of IT human resources, the provision of ES in the subsidiaries. The IS/IT policies tend to limit the abilities of the subsidiary companies to be inclusive in the implementation of Enterprise Systems. Likewise, the introduction of corporate-group IS/IT policies could be accounted for the effort to reinforce the influence of TVC over the Enterprise Systems implementation in subsidiary companies.
Summary of Chapters
CHAPTER 1 INTRODUCTION: Outlines the research scope, motivation, objectives, and the overall structure of the study regarding Enterprise Systems in corporate groups.
CHAPTER 2 LITERATURE REVIEW: Examines existing theories on corporate groups, organisational power, and Enterprise Systems to establish a theoretical construct.
CHAPTER 3 RESEARCH PARADIGM: Articulates the interpretive research stance and the philosophical assumptions guiding the investigation.
CHAPTER 4 RESEARCH DESIGN: Details the case study methodology, data collection through in-depth interviews, and the qualitative content analysis approach used.
CHAPTER 5 THE VENTURES GROUP: Analyzes the first case study group, exploring its history, the influence of the holding company, and subsidiary experiences with Enterprise Systems.
CHAPTER 6 THE PORT MANAGEMENT GROUP: Analyzes the second case study group, focusing on the decentralised IT governance and its impact on power dynamics within the organisation.
CHAPTER 7 CROSS CASE ANALYSIS AND DISCUSSION: Compares findings across both corporate groups to derive common patterns and insights on the power-influence relationship.
CHAPTER 8 ANSWERING THE RESEARCH QUESTIONS: Synthesizes the results to answer the primary research questions and reflect on the established research objectives.
CHAPTER 9 CONCLUSION, LIMITATION, AND FUTURE RESEARCH: Summarizes the study’s conclusions, acknowledges research limitations, and proposes directions for future academic inquiry.
Keywords
Enterprise Systems, Corporate Groups, Power Differential, IT Governance, Parent-Subsidiary Relationship, Organisational Control, Centralisation, Decentralisation, Information Technology, Case Study, Qualitative Analysis, Business Integration, Power of Hierarchy, Strategic Alignment, IT Resources.
Frequently Asked Questions
What is the core focus of this doctoral thesis?
This research investigates the reciprocal influence between the parent-subsidiary relationship within a corporate group and the implementation of Enterprise Systems within the subsidiary companies, using a power differential perspective.
What are the primary themes addressed in the study?
The study examines themes such as organisational power, authority, hierarchical control, IT governance arrangements (centralised vs. decentralised), and how these factors influence the adoption and usage of Enterprise Systems.
What is the overarching research goal?
The primary aim is to explore key aspects of the parent-subsidiary relationship within a corporate group setting and determine how these relationships impact the implementation and subsequent control mechanisms of Enterprise Systems.
Which scientific methodology was employed?
The research uses an interpretive paradigm and a qualitative case study research method, conducting multiple embedded case studies across two distinct Indonesian corporate groups.
What is covered in the main body of the work?
The body includes a comprehensive literature review, a detailed research design, and two deep-dive case study analyses (The Ventures Group and The Port Management Group), followed by a cross-case analysis comparing their organisational dynamics.
Which keywords define this research?
Key concepts include Enterprise Systems, corporate groups, power differential, IT governance, parent-subsidiary relationships, and organisational control.
How does the holding company exercise power over subsidiaries through Enterprise Systems?
The study finds that holding companies often use Enterprise Systems to mandate standardisation, control data visibility, and manage IT resource allocation, effectively extending their influence over subsidiary operational and strategic decisions.
How do subsidiaries respond to these power dynamics?
Subsidiaries exhibit varying responses ranging from compliance and submission to active bargaining or even covert resistance ("feral practices") when they perceive that the holding company's IT directives threaten their business performance or local autonomy.
- Quote paper
- Cucuk Budiyanto (Author), 2016, The Reciprocal Influence of Parent-Subsidiary Relationships and Enterprise Systems Implementation, Munich, GRIN Verlag, https://www.grin.com/document/383736
