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Governance Mechanisms as Substitutes and Complements – A Dynamic Perspective on the Interplay between Contractual and Relational Governance

  • Conference paper
New Studies in Global IT and Business Service Outsourcing (Global Sourcing 2011)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 91))

Abstract

In recent years scholars have discussed the relationship between contractual and relational governance in information systems (IS) outsourcing. Findings regarding this relationship are still mixed. Some hint at a substitutional relationship, others at a complementary relationship. Moreover novel investigations favor another argument: relational and contractual governance mechanisms can simultaneously be complements and substitutes.

If governance mechanisms can be both, substitutes and complements, the question arises whether the relationship between different types of governance mechanisms is the outcome of distinct processes of interaction. To answer this question we conducted an exploratory, multiple-case study of five IS outsourcing projects at a leading global bank. We identified four archetypical interaction processes (archetypes): Three archetypes yield complementary relationships, one yields a substitutional relationship. Based on these findings, we searched for patterns in the occurrence of the archetypes as well as for their underlying reasons.

Our analysis revealed three salient patterns in the occurrence of the archetypes, each representing a sequence of archetypes: In the first two patterns sequenced archetypes reinforced each other leading to either a “success” (pattern 1) or “failure path” (pattern 2). Pattern 3 - the “interrupted path” - demonstrates how a success path is broken and turned into a failure path induced by an external stimulating event.

Our major contribution is a shift in perspective. We show that the relationship between governance mechanisms is not static but dynamic. Dynamic interactions between governance mechanisms facilitate or corroborate perceived quality of IS outsourcing governance. Our findings pave the way towards a process-theoretic view on IS outsourcing governance.

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Author information

Authors and Affiliations

  1. Institute of Information Systems, University of Bern, Engehaldenstrasse 8, CH-3012, Bern

    Thomas L. Huber, Thomas A. Fischer & Jens Dibbern

Authors
  1. Thomas L. Huber
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  2. Thomas A. Fischer
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  3. Jens Dibbern
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Editor information

Editors and Affiliations

  1. Warwick Business School, University of Warwick, Coventry, UK

    Julia Kotlarsky

  2. London School of Economics, London, UK

    Leslie P. Willcocks

  3. Rotterdam School of Management, Erasmus University, Rotterdam, The Netherlands

    Ilan Oshri

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© 2011 Springer-Verlag Berlin Heidelberg

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Huber, T.L., Fischer, T.A., Dibbern, J. (2011). Governance Mechanisms as Substitutes and Complements – A Dynamic Perspective on the Interplay between Contractual and Relational Governance. In: Kotlarsky, J., Willcocks, L.P., Oshri, I. (eds) New Studies in Global IT and Business Service Outsourcing. Global Sourcing 2011. Lecture Notes in Business Information Processing, vol 91. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24815-3_3

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  • DOI: https://doi.org/10.1007/978-3-642-24815-3_3

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-24814-6

  • Online ISBN: 978-3-642-24815-3

  • eBook Packages: Computer ScienceComputer Science (R0)

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