Identifying Relevant Socio-Theoretic Foundations for Supporting Multi-Issue IT Cloudsourcing Negotiations

Service level agreement (SLA) negotiations involving cloud-based information technology (IT) service providers and customers are now commonplace. Although historical research on negotiation has often relied on economic foundations, the important nature of IT service levels to organizations’ operational effectiveness suggests that negotiation complexities in the context of cloud-based outsourcing (or cloudsourcing) cannot be well understood by relying on economic perspectives alone. To that end, this paper reports on experiments designed to determine the relevance of competing sociotheoretic frameworks as they pertain to IT cloudsourcing negotiations. Contributions include a rigorous examination of hypotheses derived from social exchange theory, equity theory, learning theory, and the win–win theories of negotiation. Additional contributions include the development of methodological constructs (using the Euclidean geometry) that reflect the complex nature of IT cloudsourcing SLAs, i.e., that they are composed of numerous service category contract clauses where negotiation tradeoffs within a service category as well as across service categories are possible. We find strong support for the relevance of the social exchange theory to IT cloudsourcing negotiations, as well as moderate support for the win-win theories of negotiation. Our conclusions provide clear directions for extending our work into the realm of negotiation support systems, and we rely on our findings to conjecture that IT cloudsourcing negotiation is a unique context for sociotheoretic negotiation research due to the inherent importance of information technologies to organizations’ operational effectiveness