Vendor opportunism in IT outsourcing: a TCE and social capital perspective

Published on Dec 1, 2015in Journal of Information Technology3.225
· DOI :10.1057/jit.2015.3
Eleni Lioliou6
Estimated H-index: 6
(Lboro: Loughborough University),
Angelika Zimmermann8
Estimated H-index: 8
(Lboro: Loughborough University)
Academic researchers have paid significant attention to the drivers of opportunistic behavior, yet our understanding of how opportunistic behavior can be mitigated remains relatively fragmented. Our investigation will focus on the social context and more specifically on the role of social capital in the deterrence of opportunistic behavior. On the basis of two qualitative case studies in the financial sector, we will illustrate how the structural, cognitive and relational dimensions of social capital can reduce internal and behavioral uncertainty between the outsourcing partners, thereby facilitating the mitigation of opportunistic behavior. In our study we combine the theory of transaction costs with social capital theory and demonstrate how they can usefully complement each other to enhance our understanding of mechanisms that can deter opportunistic behavior.
  • References (91)
  • Citations (4)
📖 Papers frequently viewed together
213 Citations
111 Citations
102 Citations
78% of Scinapse members use related papers. After signing in, all features are FREE.
#1Angelika Zimmermann (Lboro: Loughborough University)H-Index: 8
#2M.N. Ravishankar (Lboro: Loughborough University)H-Index: 8
Information technology IT development in global organisations relies heavily on the transfer of tacit and complex knowledge from onshore units to offshore subsidiaries. A central concern of such organisations is the development of social capital, which is known to facilitate the smooth transfer of knowledge. However, only a few studies in IS research have explicitly examined the role of social capital for knowledge transfer in an IT offshoring context. In this paper, we argue that such knowledge...
34 CitationsSource
Dec 1, 2013 in DSS (Decision Support Systems)
#1Bouchaib Bahli (ESC Rennes School of Business)H-Index: 11
#2Suzanne Rivard (HEC Montréal)H-Index: 39
Although the issue of cost escalation has often been mentioned in the literature on information technology outsourcing (ITO), the mechanisms by which cost escalation occurs in the ex-post stage of contracting has received little attention. Evidence suggests that cost escalation is common in ITO engagements. Drawing on transaction cost economics (TCE), this study examines the determinants of cost escalation in ITO. We propose and test a research model by positing that transaction attributes or ch...
18 CitationsSource
#1Marcus Møller Larsen (CBS: Copenhagen Business School)H-Index: 10
#2Stephan Manning (University of Massachusetts Boston)H-Index: 22
Last. Torben Pedersen (CBS: Copenhagen Business School)H-Index: 49
view all 3 authors...
This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experience and a strong orientation toward organi...
168 CitationsSource
In recent years, software development outsourcing has become even more complex. Outsourcing partner have begun‘re- outsourcing’ components of their projects to other outsourcing companies to minimize cost and gain efficiencies, creating a multi-level hierarchy of outsourcing. This research in progress paper presents preliminary findings of a study designed to understand knowledge transfer effectiveness of multi-level software development outsourcing projects. We conceptualize the SD-outsourcing ...
3 Citations
#1Deepa Mani (Indian School of Business)H-Index: 9
#2Anitesh Barua (University of Texas at Austin)H-Index: 29
Last. Andrew B. WhinstonH-Index: 72
view all 3 authors...
The emergence of information-intensive business process outsourcing (BPO) relationships calls for the study of exchange performance beyond traditional considerations of the contractual structure that facilitates cooperative intent to include the information structure that facilitates the mutual exchange of information to enact cooperative intent and coordinate actions between the user firm and the service provider. Yet, there has been little analysis of the drivers and performance effects of the...
43 CitationsSource
#1Anandasivam Gopal (UMD: University of Maryland, College Park)H-Index: 14
#2Balaji R. Koka (Rice University)H-Index: 7
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 ...
71 CitationsSource
#1Fabrice Lumineau (UTS: University of Technology, Sydney)H-Index: 13
#2Bertrand Quelin (HEC Paris)H-Index: 13
This study investigates contracting mechanisms in situations of opportunistic disputes between organizations. The authors specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. They use a unique data set of 102 buyer– supplier disputes to explore in depth different types of opportunism – that is, strong form versus weak form opportunism – and different types of contracting mechanisms – that ...
59 CitationsSource
27 CitationsSource
#1Mary C. Lacity (UMSL: University of Missouri–St. Louis)H-Index: 43
#2Leslie P. Willcocks (LSE: London School of Economics and Political Science)H-Index: 66
Last. Shaji A. Khan (UMSL: University of Missouri–St. Louis)H-Index: 10
view all 3 authors...
Highlights? We coded 73 empirical findings from 31 journal articles that applied Transaction Cost Economics (TCE) to study Information Technology Outsourcing (ITO). ? We found that only 49% of the empirical ITO findings supported TCE logic. ? We argue that ITO research has matured to the point that we should be building our own endogenous ITO theory. ? We offer three assumptions about ITO and provide, in each case, reasons why these may be more appropriate than TCE assumptions. ? We draw on a re...
87 CitationsSource
#1Forough Karimi Alaghehband (HEC Montréal)H-Index: 3
#2Suzanne Rivard (HEC Montréal)H-Index: 39
Last. Sylvain Goyette (UQAM: Université du Québec à Montréal)H-Index: 3
view all 4 authors...
Highlights? Extant information technology outsourcing research based on transaction cost economics is reviewed. ? We attempt to explain the mixed results obtained in empirical studies. ? We found that models do not take into account all the constructs from Transaction Cost Theory. ? Few empirical studies take into account the normative nature of the theory. ? Proposed models are not always consistent with the theory. Transaction Cost Theory (TCT) has been widely used in information technology ou...
85 CitationsSource
Cited By4
#1Sikandar Ali (China University of Petroleum)H-Index: 5
#2Hongqi Li (China University of Petroleum)H-Index: 5
Last. Yanhong Zhao (China University of Petroleum)H-Index: 1
view all 5 authors...
#1Mohammad Alghababsheh (Mutah University)H-Index: 1
#2David Gallear (Brunel University London)H-Index: 14
Last. Mushfiqur Rahman (Brunel University London)H-Index: 2
view all 3 authors...
A major challenge for supply chain managers is how to manage sourcing relationships to ensure reliable and predictable actions of distant suppliers. The extant research into sustainable supply chain management (SSCM) has traditionally focused on the transactional and collaboration approaches through which buyers encourage suppliers to act responsibly. However, little effort has been devoted to investigating the factors that underpin and enable effective implementation of these two approaches, or...
3 CitationsSource
#1Sikandar Ali (China University of Petroleum)H-Index: 5
#2Jiwei Huang (China University of Petroleum)H-Index: 1
Last. Hongqi Li (China University of Petroleum)H-Index: 5
view all 4 authors...
#1Eleni Lioliou (QMUL: Queen Mary University of London)H-Index: 6
#2Leslie P. Willcocks (LSE: London School of Economics and Political Science)H-Index: 66
Last. Xiaohui Liu (University of Birmingham)H-Index: 71
view all 3 authors...
Multi-sourcing arrangements are a major trend in the contemporary outsourcing landscape, but our understanding of what makes these complex ventures effective remains relatively fragmented. Our study focuses on the multi-sourcing and opportunistic behavior of service providers, and in particular a relatively neglected but major driver of opportunistic behavior, namely the uncertainty surrounding the transaction. Developing an extended transaction cost economics perspective, our investigation focu...
1 CitationsSource
#1Eleni Lioliou (QMUL: Queen Mary University of London)H-Index: 6
#2Leslie P. Willcocks (LSE: London School of Economics and Political Science)H-Index: 66
As the practice of information technology (IT) outsourcing has been evolving, the research issues concerned with it, and the theories used to explain it, have shifted accordingly (Dibbern et al. 2004; Lacity et al. 2009; Willcocks et al. 2018). In the early stages, research on IT outsourcing was centred on the ‘make-or-buy’ decision. Researchers from economic perspectives supported that outsourcing is a reasonable option when contracting out the IT function is cheaper than developing it in-house...
#1Angelika Zimmermann (Lboro: Loughborough University)H-Index: 8
#2Ilan Oshri (Lboro: Loughborough University)H-Index: 21
Last. Alexandra Gerbasi (University of Surrey)H-Index: 11
view all 4 authors...
The sharing of knowledge between a firm and its internal or external service suppliers has become an important element of contemporary sourcing arrangements. Moreover, the knowledge based view (KBV) has long suggested that due to stronger cognitive links within firms, internal compared to external service provision creates better conditions for knowledge sharing. Empirical evidence for this claim is however scarce, and the KBV does not explain the mechanisms for more knowledge sharing in interna...
1 CitationsSource