Abstract

Enterprise systems (ES) standardization is widely portrayed as a governance mechanism that enhances integration, efficiency, and control. Yet IS research highlights a persistent paradox: global standardization delivers uniformity, while local flexibility sustains responsiveness. Prior work has not specified the boundary conditions under which this tension flips from complementarity to polarization. We address this gap by developing a dialectical theory of ES standardization under climate risk. Using panel data on Fortune 5 firms (214–218), results show that both transition risks and realized risks are negatively associated with firm valuation. Moreover, we find that ES standardization moderates these effects: it enhances firm value in stable contexts but strengthens the adverse valuation impact of both transition and realized risks, whereas ES diversity functions as resilience. These findings establish boundary conditions for ES governance, advance dialectical theorizing in IS, and integrate climate risk into debates on IT value and digital sustainability.

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