An integrative model of trust on IT outsourcing: Examining a bilateral perspective

  • Authors:

  • Jae-Nam Lee;Minh Q. Huynh;Rudy Hirschheim

  • Affiliations:

  • Korea University Business School, Seoul, South Korea 136-701;Management Department, Southeastern Louisiana University, Hammond, USA 70402;Department of Information Systems and Decision Sciences, E. J. Ourso College of Business, Louisiana State University, Baton Rouge, USA 70803

  • Venue:
  • Information Systems Frontiers
  • Year:
  • 2008

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Abstract

Trust has been considered a central aspect of successful IT outsourcing. Although a great deal of interest in trust has been described, there are very few theoretical models in the IT outsourcing literature to explain mutual trust, its role, and its impact in IT outsourcing. This study proposes a trust-based relationship research model to assess the perceived IT outsourcing success in terms of (1) mutual trust with its temporal dimension of initial trust and initial distrust, and (2) knowledge sharing with the moderating effect of mutual dependency. This model was then validated and applied in a study involving organizations in Korea. The data was collected and analyzed to understand initial trust, initial distrust, knowledge sharing, and mutual dependency as contributing factors to success in IT outsourcing. The results show that mutual trust between the service receiver and provider is very important for knowledge sharing and outsourcing success, and is affected by the initial perception to each other's partner at the beginning of the outsourcing process. Interestingly, this study also shows that initial trust is considered a significant factor in the perception of mutual trust from the service receiver's perspective, but not from the service provider's viewpoint. The results help extend our understanding of critical success factors in outsourcing success and of different standpoints between the service receiver and provider.