Unfolding Dyadic Dependencies in IS Outsourcing Relationships – Development of Two Multidimensional Constructs

While dependence is seen as a major risk in IS outsourcing relationships, to date little attention has been paid to fully and unambiguously capturing the complex nature of this phenomenon and specifying how to measure it. Research in reference disciplines has shown that dependence is a dyadic concept, i.e., studies should assess both the client’s and the supplier’s dependence in order to draw adequate conclusions. Hence, to provide a thorough basis for future IS outsourcing studies, this research-in-progress paper follows a multi-method approach (extensive literature review, case study interviews, Q-sorting, questionnaire pretests, two-sided pre-study with 44 responses from 367 companies) to develop two multidimensional “dependence” constructs, reflecting both sides of an IS outsourcing dyad, i.e., client and supplier dependence. Our research efforts aim to contribute to and extend inter-organizational IS studies and to support client and supplier firms in monitoring and influencing dyadic dependence structures

Positioning Clients in Dyadic Dependence Structures of IS Outsourcing Relationships – Conceptualization and Empirical Findings

While dependence is a well-known concern in IS outsourcing, there is little literature dealing with this phenomenon as proposed by traditional dependence research in other disciplines. In particular, little efforts have been made to contrast a client’s dependence with supplier’s dependence in a single study. To bring forward the conceptualization in our field, we investigated five outsourcing relationships with respect to dependence structures in a dyad. Perceptual differences became apparent while comparing clients’ perceived dependencies with suppliers’ ones. As a second contribution we aimed to explain different client positions in the dependence structures. Therefore, the dependence construct was broken down into its constituting facets. Besides importance of the outsourcing relationship and a supplier’s substitutability, spillover effects emerged as an unanticipated third category of dependence. Originating from other exchange relationships with the same partner, these effects can distort the dependence structure in the focal relationship. Implications for future research are discussed

Management of IS Outsourcing Relationships – A Dyadic Analysis of Antecedents and Consequences of Dependencies and Power

Many companies today rely heavily on specialized information technology (IT) suppliers for fulfilling their IT demands. However, external provision, i.e., outsourcing, of IT services is a risky endeavor, and expectations are frequently not met. This dissertation addresses the challenge of successfully managing outsourcing relationships between clients and IT suppliers. The dissertation begins by presenting results from a multiple case study that analyzes the organizational design of the management of supplier relations in the IT organizations of five client companies. These results contribute to research in this area and show IT decision makers on the client side efficient ways of organizing the ‘client-supplier interface’. Special attention is paid to the risks associated with outsourcing arrangements that should be addressed as part of successful relationship management. From a client’s perspective, excessive dependence on the IT supplier is viewed as a major outsourcing hazard. However, research from related disciplines suggests not only analyzing a client’s dependence but also incorporating the supplier’s dependence on the client in a dyadic exchange relationship. Differences between the dependency levels of the client and the supplier can lead to a power advantage for one party that can then be used to the detriment of the dependence-disadvantaged party. The dissertation investigates different dependence and power constellations in outsourcing relationships using a case study approach. The investigation results in conceptualizations and measurement instruments for client and supplier dependence in outsourcing relationships. The dissertation ends with a large-scale empirical survey that analyzes the effects of different combinations of dependencies and power use on the contractual partners’ satisfaction with the exchange performance. Taken together, the results advance knowledge about the successful management of outsourcing relationships and, more specifically, they enable clients and IT suppliers to capture and optimize dependence relations

Value Creation and Value Claiming in Make-Or-Buy Decisions

Transaction value analysis (TVA) integrates the concepts of resourceheterogeneity and transaction cost economics into a single framework,which emphasizes both value creation and value claiming in firms'vertical integration decisions. Using a TVA perspective, we develophypotheses to explain the firm's intent to outsource applicationservices. A sample of 178 firms in the publishing and printingindustry in The Netherlands is used to test the hypotheses. This paperfinds that firms take both value-creation and value-claimingmotivations into consideration, with value creation having on averagea dominating impact, thus substantiating the TVA framework. However,we also find that if the risks of opportunism in outsourcingcontracting are high, value creation becomes the less important factorin make-or-buy decisions. Furthermore, the paper shows that the needfor flexibility is a major driver of governance choice forvalue-creation as well as for value-claiming motivations. Implicationsand future research directions are discussed.information technology;interorganizational strategy;make-or-buy decisions;outsourcing relationships;transaction value analysis

Client-Vendor Collaboration in Information Technology Development Projects And Its Emerging Outcomes

This study investigates the key dimensions of IT project collaboration and its outcomes. We conceptualized key dimensions of client-vendor collaboration, and its emerging outcomes based on literature reviews. Then, we proposed a new research framework that links IT development processes to IT project client-vendor collaboration which in turn affects the outcomes of IT project. We examined the key dimensions of IT project collaboration and their impacts on project outcomes. We identified four critical IT development processes and technologies that contribute to the development of project collaboration. Our results include: (1) Coordination practices and technologies (such as communication quality and coordination technology) significantly influence the effectiveness of IT development.; (2) IT project collaboration can be conceptualized as consisting of two related but distinct constructs: cooperation structure and joint development; (3) IT development processes jointly influence the formation and the development of IT project collaboration. We also found that knowledge-sharing activities significantly improve the usage level of the iterative requirement generation process. (4) Different collaboration behaviors as indicated by IT project collaboration constructs affect two types of outcomes: project performance outcomes and emerging outcomes. IT project collaboration significantly improve both the emerging outcomes (such as team cultivation and relational outcomes) and performance outcomes (time, schedule and functionality). (5) Trust fully mediates the effect of cooperation structure on performance outcomes; suggesting that common rules and structures cannot directly benefit project performance without members’ believing in those rules and agreements. Through IT project collaboration, IT vendors can achieve not only traditional project outcomes but also emerging outcomes such as team cultivation and client-vendor relationship building. The relationships among IT development processes and technologies, project collaboration, and the outcomes of project collaboration are much more complex and dynamic than what the extant literature has portrayed. Multiple factors jointly influence the processes of IT development. Different patterns of client-vendor collaboration also affect the outcomes of the project, in addition, the trust level between the vendor and the client plays a major role in mediating the relationship between client-vendor collaboration and project performance

The Role of Corporate Cultural Similarity for Outsourcing Relationship Quality and Outsourcing Success

What is the impact of corporate cultural similarity (CCS) on outsourcing success? In this paper, we use data from a survey with the largest 1,000 banks in Germany to show that CCS has a substantial effect on outsourcing success which is mainly mediated by different dimensions of outsourcing relationship quality. The more comparable the corporate cultures of the vendor firm and the client firm, the higher is the outsourcing success from the client’s perspective. Finally, we highlight our future steps of research in investigating the impact of particular types of corporate culture in an IT outsourcing context

An Empirical Examination of Relational Governance and Service Capabilities on the Success of Professional Service Firms Offshore Outscoring the Client Perspective

Professional services, such as accounting, finance, engineering and management consulting, are significant contributors to the U.S. economy accounting for the largest value added industry within the private sector. Knowledge-intensive professional services reached this level of economic prominence by responding to heightened competition, managing rising costs, utilizing key resources, and re-directing their focus to internal core competencies through the strategic decision to engage in offshore outsourcing relationships. By 2015, the Congressional Research Study report predicts 3.4 million, or 13.7 of professional service jobs will be offshore outsourced. Offshore outsourcing is a firm level strategic decision to relocate business activities to an offshore third party primarily to emerging markets. Based on existing theories of transaction cost economics, resource based view, and resource dependence theory, this dissertation empirically validates a comprehensive model evaluating the multi-dimensional relational governance mechanism of collaboration on the capabilities of the offshore service provider. In addition, the model examines the influence of the service capabilities on the success of the client firm. One of the key contributions of this study is the client perspective examination of the relationship between the U.S. client firm and offshore service provider thereby addressing a stated need for additional academic research. The importance of governance mechanisms established by professional service firms have evolved over time from minimizing transaction costs and opportunistic behavior, to maximizing access to complementary resources, to building long-term relationships based on communication, commitment and information sharing. These governance mechanisms are integral to a collaborative client-vendor relationship. This dissertation develops hypotheses, from existing outsourcing literature, evaluating the influence of collaboration on the client\u27s perception of the learning capability, the se

Manufacturer-supplier relationships and service performance in service triads

Purpose - The purpose of this paper is to explore the role of the manufacturer-supplier relationship in service performance within service triads.  Design/methodology/approach - An abductive case-research approach was adopted, using three embedded cases and 26 interviews in complex, multilevel manufacturer-supplier relationships within the same service network. Cannon and Perreault's (1999) multidimensional relationship framework was deployed to achieve granular and nuanced insight.  Findings - This study corroborates the idea that relational relationships within service triads and servitization improve performance. The role of each relationship dimension in service performance is discerned and their interplay is captured in an analytic model. Information exchange, supplier relationship-specific adaptations, and the degree of formalization of the relationship directly influence performance, while cooperative norms and operational linkages are further back in the causal ordering. The study also highlights the importance of contingent factors (the size of the service site, the proportion of its revenues coming from service contract activities) and how they affect the relationship dimensions.  Research limitations/implications - The work was conducted in one network and the findings were generalized to theory rather than additional empirical settings.  Originality/value - This study is the first to derive a contextualized causal ordering of the Cannon and Perreault (1999) framework of relationship connectors and link it with service performance

Ethics and taxation : a cross-national comparison of UK and Turkish firms

This paper investigates responses to tax related ethical issues facing busines

Value Creation and Value Claiming in Make-Or-Buy Decisions

Transaction value analysis (TVA) integrates the concepts of resource heterogeneity and transaction cost economics into a single framework, which emphasizes both value creation and value claiming in firms' vertical integration decisions. Using a TVA perspective, we develop hypotheses to explain the firm's intent to outsource application services. A sample of 178 firms in the publishing and printing industry in The Netherlands is used to test the hypotheses. This paper finds that firms take both value-creation and value-claiming motivations into consideration, with value creation having on average a dominating impact, thus substantiating the TVA framework. However, we also find that if the risks of opportunism in outsourcing contracting are high, value creation becomes the less important factor in make-or-buy decisions. Furthermore, the paper shows that the need for flexibility is a major driver of governance choice for value-creation as well as for value-claiming motivations. Implications and future research directions are discussed