Hybrid Relational-Contractual Governance for Business Process Outsourcing.

Author List: Rai, Arun; Keil, Mark; Hornyak, Rob; WŸllenweber, Kim;

Journal of Management Information Systems, 2012, Volume 29, Issue 2, Page 213-256.

We examined 335 business process outsourcing (BPO) ventures to understand the effect of contractual and relational governance factors on BPO satisfaction from the client's perspective. While both contractual and relational factors explain significant variance in BPO satisfaction, relational factors dominate. By examining interactions between key contractual and relational mechanisms, we found that elements of the two governance approaches operate as substitutes with respect to BPO satisfaction. Specifically, the relational mechanism, trust, was found to substitute for contractually specified activity expectations, goal expectations, and contractual flexibility. Similarly, the relational mechanism, information exchange, was found to substitute for contractually specified activity expectations and goal expectations. Finally, the relational mechanism, conflict resolution, was found to substitute for contractually specified goal expectations. Our results can be applied to more effectively realize controls in outsourcing contexts and to design governance systems that integrate contractual and relational governance mechanisms based on the characteristics of client-vendor relationships.

Keywords: business process outsourcing; controls; formal contract; hybrid governance; relational governance; services

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List of Topics

#76	0.529	governance relational mechanisms bpo rights process coordination outsourcing contractual arrangements technology benefits view informal business formal exchange hybrid complementarity flexibility
#274	0.130	outsourcing transaction cost partnership information economics relationships outsource large-scale contracts specificity perspective decisions long-term develop requirements economic association factors hypotheses
#136	0.080	expectations expectation music disconfirmation sales analysis vector experiences modeling response polynomial surface discuss panel new nonlinear period understand paper dissonance
#276	0.074	satisfaction information systems study characteristics data results using user related field survey empirical quality hypotheses important success various indicate tested
#209	0.066	results study research information studies relationship size variables previous variable examining dependent increases empirical variance accounting independent demonstrate important addition
#163	0.050	critical realism theory case study context affordances activity causal key identifies evolutionary history generative paper events lead mechanisms evolution change