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

Oshri, I, Gerbasi, AM and Kotlarsky, J (2015) Strategic innovation through outsourcing: The role of relational and contractual governance Journal of Strategic Information Systems, 24 (3). pp. 203-216.

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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.

Item Type: Article
Subjects : Management
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
Oshri, I
Gerbasi, AM
Kotlarsky, J
Date : 18 August 2015
DOI : 10.1016/j.jsis.2015.08.001
Copyright Disclaimer : © 2015 Elsevier B.V. All rights reserved
Uncontrolled Keywords : Outsourcing, Strategic innovation, Quality of client–supplier relationship, Fixed-price contract, Time and materials contract, Joint venture contract
Depositing User : Symplectic Elements
Date Deposited : 11 Aug 2016 13:46
Last Modified : 31 Oct 2017 18:34

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