Strategic innovation through outsourcing:the role of relational and contractual governance

Oshri, Ilan, Kotlarsky, Julia and Gerbasi, Alexandra (2015). Strategic innovation through outsourcing:the role of relational and contractual governance. Journal of Strategic Information Systems, 24 (3), 203–216.

Abstract

There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this paper seeks to advance our understanding of the role that relational and contractual governance plays in achieving strategic innovation through outsourcing. We hypothesized and tested empirically the relationship between the quality of client-supplier relationships and the likelihood of achieving strategic innovation, and the interaction effect of different contract types, such as fixed-price, time and materials, partnership and their combinations. Results from a pan-European survey of 248 large firms suggest that high-quality relationships between clients and suppliers may indeed help achieve strategic innovation through outsourcing. However, within the spectrum of various outsourcing contracts, only the partnership contract, when included in the client contract portfolio alongside either fixed-price, time and materials or their combination, presents a significant positive effect on relational governance and is likely to strengthen the positive effect of the quality of client-supplier relationships on strategic innovation.

Publication DOI: https://doi.org/10.1016/j.jsis.2015.08.001
Divisions: Aston Business School > Operations & information management
Aston Business School > Operations & information management research group
Additional Information: © 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: fixed-price contract,joint venture contract,outsourcing,quality of client-supplier relationship,strategic innovation,time and materials contract,Management Information Systems,Information Systems,Information Systems and Management
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
Published Date: 2015-09
Authors: Oshri, Ilan
Kotlarsky, Julia ( 0000-0002-1478-549X)
Gerbasi, Alexandra

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