Managing I/S design teams: a control theories perspective
Management Science
The role of trust in outsourced IS development projects
Communications of the ACM
Quality management in systems development: an organizational system perspective
MIS Quarterly - Special issue on Intensive research in information systems: using qualitative, interpretive, and case methods to study information technology—third installment
The offshore model for software development: the Infosys experience
SIGCPR '96 Proceedings of the 1996 ACM SIGCPR/SIGMIS conference on Computer personnel research
Information Systems Outsourcing; Myths, Metaphors, and Realities
Information Systems Outsourcing; Myths, Metaphors, and Realities
An Empirical Study of Speed and Communication in Globally Distributed Software Development
IEEE Transactions on Software Engineering
An Empirical Analysis of Productivity and Quality in Software Products
Management Science
Contracts in Offshore Software Development: An Empirical Analysis
Management Science
Survey research methodology in management information systems: an assessment
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Software Engineering: A Practitioner's Approach
Software Engineering: A Practitioner's Approach
Hi-index | 0.00 |
In this paper, the interacting effect of formal contracts and relational governance on vendor profitability and quality in the software outsourcing industry are examined. We focus on a critical manifestation of relational governance--the presence of relational flexibility in the exchange relationship--and argue that the enacted observation of relational flexibility is driven by perceptions of exchange hazards. In a departure from extant literature, however, we propose that the benefits accruing from it are asymmetric and depend on how the exchange risks are apportioned by the formal contract. Formally, we hypothesize that relational flexibility provides greater benefits to an exchange partner that faces the greater proportion of risk in a project, induced through the contract. In addition, we hypothesize that these benefits manifest on the performance dimensions that are of importance to the risk-exposed partner. We test our hypotheses on 105 software projects completed by a software outsourcing vendor for multiple clients. The results show that relational flexibility positively affects profitability in only fixed price contracts, where the vendor faces greater risk, while positively affecting quality only in time and materials contracts, where the client is at greater risk. We thus provide evidence for the asymmetric benefits from relational governance, thereby arguing for a more contingent and limited view of the value of relational governance, based on risk-exposure, rather than the more expansive view prevalent in the literature contending that relational governance provides benefits for all parties to an exchange. We conclude with a discussion of the research and managerial implications of our findings.