Conflict resolution in business services outsourcing relationships

Many organizations source administrative business services like information technology, human resources, procurement, legal, financial and accounting services through external service providers, a practice known as Business Services Outsourcing (BSO). Many of these relationships are strategic, in the sense that they are large, underpin clients’ business strategies, and the client can become highly dependent on service provider capabilities and performance. The BSO market is over $1 trillion in size and has been growing for two decades. Despite the size and maturity, up to 50% of BSO relationships result in poor outcomes, partly because partners cannot resolve conflicts. Based on interviews with client and provider leads from 13 BSO relationships, we answered the research question: “What types of inter-organizational conflicts arise in BSO relationships and how do partners resolve them?” We extended the prior literature on inter-organizational conflict frameworks by conceptualizing three types of conflicts specific to BSO: commercial conflicts, service conflicts, and relationship conflicts. Conflicts as we study them here are not minor disagreements, but have a strategic dimension. Commercial conflicts were the most serious because outsourcing relationships are firstly commercial transactions—a provider must earn a profit and a client must meet its economic business case to be viable. Theoretically, we found Thomas and Kilmann’s typology of conflict resolution styles to be robust enough to characterize the BSO conflict cases, provided a switched style category was included. In our data, we found that only the collaborative and switched-to-collaborative styles resolved conflicts to the satisfaction of both partners, which is consistent with theory. Novel findings that extend or contest prior theory are identified as part of a future research agenda. For practitioners, we also identified five effective conflict resolution behaviors

Examining client perceptions of partnership quality and its dimensions in an IT outsourcing relationship

This paper reports on an empirical study of the multidimensionality of partnership quality in IT outsourcing arrangements and the relationships between these dimensions of partnership quality. A two-phase national survey was conducted to collect empirical data to confirm the dimensions of partnership quality in an IT outsourcing arrangement from the client organisation perspective and to identify the significant relationships between these dimensions using a second generation multivariate analysis technique—partial least squares (PLS). The findings from results of the data analyses show that inter-organisational trust, shared business understanding and to a lesser extent, functional and dysfunctional conflict between the client organisation and the outsourcing vendor in an IT outsourcing relationship are the key determinants of partnership quality. The key outcome variable for high partnership quality between the client organisation and the outsourcing vendor in an IT outsourcing relationship is mutual beneficial sharing of risks and benefits. Commitment in an IT outsourcing relationship is confirmed as a multidimensional construct of behaviour commitment and temporal/continuance commitment and was found to be influenced by the other dimensions of partnership quality. The key findings of this study provide support for the notion that trust and shared business understanding are key drivers in the IT outsourcing partnership style relationship ensuring that the sharing of risks and benefits are realised and conflict is minimised leading to a high quality and ultimately successful partnership between the client organisation and the outsourcing vendor. Furthermore our findings indicate that behavioural commitment to the contractual obligations of an IT outsourcing relationship sustains an ongoing temporal commitment to the partnership between the client organisation and the outsourcing vendor

Inter Organizational Relationships Performance in Third Party Logistics: conceptual framework and case study

Supplier relationship management is an important challenge for shippers in logistics outsourcing. This paper attempts to understand the factors which affect inter organizational relationships performance in third party logistics and proposes a conceptual framework specifically for inter organizational relationship performance in third party logistics. We also draw a set of propositions from published research and exploratory inter-views with practitioners to explain inter organizational relationships performance in third party logistic net-works. Five main dimensions of inter organizational relationships are identified which affect performance in third party logistics: commitment, supplier adaptation, conflict resolution, partner fit and communication. In order to assess the validity of our conceptual model we include a case study in this paper. The case study is based on Shell Chemicals Europe and their portfolio of seventeen third party logistic service suppliers

Contextual factors, knowledge processes and performance in global sourcing of IT services: An investigation in China

Copyright @ 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Reuse of this article has been approved by the publisher.In this paper, the authors explore the influences of two major contextual factors—supplier team members’ cultural understanding and trust relationship—on knowledge processes and performance in global sourcing of IT services. The authors discuss a joint investigation conducted by a cross-cultural research team in China. Cultural understanding is measured by individualism with guanxi and mianzi, two Chinese cultural concepts, and trust relationship is measured by adjusting trust, a notion reflecting the uniqueness of the Chinese people. Knowledge processes are characterized by knowledge sharing. Performance is measured by the outcomes of global sourcing, which is represented by product success and personal satisfaction. Data are collected in 13 companies in Xi’an Software Park, with 200 structured questionnaires distributed to knowledge workers. The results of quantitative data analysis indicate that cultural understanding influences trust relationship greatly, as well as knowledge sharing and performance in global sourcing of IT services. Trust relationship significantly impacts knowledge sharing, whereas trust relationship and knowledge sharing have no impact on performance. This study suggests that special aspects of the Chinese context have significant direct impacts on knowledge processes while no direct and immediate impacts on performance in global sourcing of IT services.National Natural Science Foundation of China, Program for Humanity and Social Science Research, Program for New Century Excellent Talents in University in China and Brunel University's Research Development Fund

The state-private interface in public service provision

Political theory sets out a strong case for the state to play a major role in public service provision. Yet services are often provided by a range of state and non-state actors as well as by collaborative partnerships. This paper surveys the literature, seeking to map arrangements in developing countries and to understand the politics of different types of service provision

FM contract relationships: from mobilisation to sustainable partnership

Purpose / theory Outsourcing is a fundamental business model for the Facilities Management (FM) industry. To enable sustained mutual success the parties involved must seek to understand the unique, socially constructed, and often highly complex situational realities of the organisational ecologies they are engaged in. The FM industry can unlock improved performance and strategic credibility through an appreciation of the need for different conversations. Design / methodology / approach Findings from two recent cases are considered. Data from two different client-contractor relationship situations was collected utilising a critical ethnographic research methodology; a phenomenological paradigm that acknowledges knowledge as socially constructed through language. A variant on Scott-Morgan‟s unwritten-rules coding method was used to analyse the data and justify the prevalent themes and issues presented. Findings Findings include the role of perceptions and assertions in the construction of social realities, change management implications, and how these impact on the traditional view of the client/contractor relationship. Ethnographic findings are typically context specific, therefore generalisations must be carefully considered. The key findings are however substantiated by existing FM outsourcing literature. Originality / value Highlights the practical importance of seeking to understand socially embedded realities for improved FM contract performance. Considers the human resource element of change via FM outsourcing. Takes a social constructivist approach to organisational sense-making. Uses examples from focused, critical ethnographies to explore existing FM contracting dynamics. Qualitative investigations into related organisational circumstances are encouraged to further develop an evidence base

Conflict Resolution in a Multi-level IT-enabled Outsourcing Network: A Structured Solution Approach

Using the case study of an Indian Technology and Outsourcing Service Provider, SmartKey (real but renamed company), a technology vendor to a global healthcare provider, this paper analyses offshore outsourcing issues using IT-enabled services to gain deeper insights needed to understand the core conflict and propose a well-reasoned solution approach. Reasoning, the conscious thought process leading to a well-justified decision, is an important managerial skill required for making dynamic decisions, resolving conflicts, and thereby developing human resources. This paper explores Goldratt’s Evaporating Clouds (ECs) as a systematic approach to reasoning in particular, and as a system for developing human resource in general. We show how Evaporating Clouds provided direction towards an acceptable solution to this case. We suggest that ECs can be used proactively as a springboard to ensure win/win solutions in various possible future interactions between the supply chain network partners. We conclude our paper by acknowledging the limitations of current research and provide future research directions

What drives contract design in strategic alliances? Taking stock and how to proceed

We collect and assess prior empirical evidence on contract design in alliances that has been published since Parkhe’s (1993) seminal study on inter-firm contracts. We elaborate on the effects of transaction-related factors, experience gained from prior relationships, and deliberate learning efforts on contracts. Our paper offers three contributions. First, we systematically review the existing literature on alliance contracts and summarize our findings. Second, while prior research has traditionally focused on contractual complexity, we place the content of contracts center stage and identify three contractual functions. While existing studies on contractual functions predominantly refer to safeguarding as a response to appropriation concerns, we also consider coordination and contingency adaptability as outcomes of adaptation concerns. Third, we disentangle the differential influences of previous experiences on distinct contractual functions and show that experience gained from prior relationships has different effects on safeguarding and contingency adaptability than on coordination. Overall, we add to the systematization of the current debate on alliance contract design and trace promising avenues for future research on the impact of transaction- and experience-related factors on the complexity and content of alliance contracts

Organizational Primacy after the Demise of the Organizational Career: Employment Conflict in a Post-Standard Contract World

[Excerpt] There is a contradiction at the heart of dispute resolution in the contemporary workplace. The locus of determination of the terms and conditions of employment, including processes for the resolution of disputes concerning these terms and conditions, has become increasingly decentralized to the organizational level, at the same time that long term attachment of employee careers to these same organizations has been diminishing. The result is a disconnect between the nature of current employment disputes, which increasingly involve issues relating to entry to and exit from relationships with organizations, including questions of the formation and content of employment contracts, and dispute resolution procedures that assume membership within an organizational community and acceptance of its rules and norms. In this paper, I examine these two trends in employment dispute resolution and explore the tensions between them. I begin by discussing the increase in organizational ordering of terms and conditions of employment and how it is reflected in the development of organizationally focused dispute resolution mechanisms. Then I turn to examining examples of types of growing employment conflicts that revolve around issues relating to the formation and termination of employment relationships. Following this, I conclude by discussing how dispute resolution procedures and systems might be re-envisioned to better fit a world in which standard long-term employment contracts with a single organization are no longer the paradigmatic model

CLIENT-VENDOR RELATIONSHIPS IN CLOUD COMPUTING: LESSONS FROM IT OUTSOURCING

There is considerable debate in the IS research literature about the nature of cloud computing. Whereas some researchers suggest that cloud computing is a paradigm shift that is changing the IT industry, others argue that cloud computing is just another form of IT outsourcing. Based on a review of the IS research and practitioner literature, this paper takes a middle position. We believe that while cloud computing represents a new delivery model of IT resources, there are lessons to be learnt from earlier studies in outsourcing. Hence this paper focuses on one issue in particular: the relationship between the client and vendor. Drawing from existing studies in IT outsourcing, this paper seeks to identify those factors related to client-vendor relationships that might be relevant in the context of cloud computing. We propose four factors as being particularly relevant for cloud computing: commitment, cooperation, cultural compatibility and trust