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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)
Abstract
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)
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#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...
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#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...
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#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
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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...
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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 ...
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#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 ...
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#1Mary C. Lacity (UMSL: University of Missouri–St. Louis)H-Index: 43
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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...
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#1Forough Karimi Alaghehband (HEC Montréal)H-Index: 3
#2Suzanne Rivard (HEC Montréal)H-Index: 39
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#1Eleni Lioliou (QMUL: Queen Mary University of London)H-Index: 6
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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...
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