Contextual Factors, Knowledge Processes and Performance in Global Sourcing of IT Services: An Investigation in China

Contextual Factors, Knowledge Processes and Performance in Global Sourcing of IT Services: An Investigation in China

Rong Du (Xidian University, China), Shizhong Ai (Xidian University, China), Pamela Abbott (Brunel University, UK) and Yingqin Zheng (De Montfort University, UK)
Copyright: © 2011 |Pages: 26
DOI: 10.4018/jgim.2011040101
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Abstract

In this paper, the authors explore the influences of two major contextual factors—supplier team members’ cultural understanding and trust relationship—on knowledge processes and performance in global sourcing of IT services. The authors discuss a joint investigation conducted by a cross-cultural research team in China. Cultural understanding is measured by individualism with guanxi and mianzi, two Chinese cultural concepts, and trust relationship is measured by adjusting trust, a notion reflecting the uniqueness of the Chinese people. Knowledge processes are characterized by knowledge sharing. Performance is measured by the outcomes of global sourcing, which is represented by product success and personal satisfaction. Data are collected in 13 companies in Xi’an Software Park, with 200 structured questionnaires distributed to knowledge workers. The results of quantitative data analysis indicate that cultural understanding influences trust relationship greatly, as well as knowledge sharing and performance in global sourcing of IT services. Trust relationship significantly impacts knowledge sharing, whereas trust relationship and knowledge sharing have no impact on performance. This study suggests that special aspects of the Chinese context have significant direct impacts on knowledge processes while no direct and immediate impacts on performance in global sourcing of IT services.
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Introduction

As the industry for global sourcing of IT and IT-enabled services has developed, many studies have explored ways of evaluating supplier’s capabilities and managing the sourcing process (Willcocks & Lacity, 2007). Also, some research has addressed the soft side of global sourcing, including innovation in relationships, social capital, and knowledge (Oshri, Kotlarsky, & Willcocks, 2008). Further, relevant research has paid special attention to knowledge processes in globally distributed contexts, which typically occurs in the form of knowledge transfer/sharing, knowledge-based coordination, and expertise management (Rottman, 2008; Kotlarsky, Oshri, & Van Fenema, 2008). Research findings show that global sourcing of IT services should be treated as a context-dependent scenario (Oshri, Kotlarsky, & Willcocks, 2008) where country contexts, such as national culture, government policies, political situation, economic conditions, technological environments, firm strategies, etc. should be considered (Seliem et al., 2003; Aharoni & Burton, 1994; Rosenzweig, 1994; Deans et al., 1991; Ein-Dor et al., 1993). These contextual factors contribute greatly to performance in global sourcing by affecting the relationship between supplier’s capabilities and outcome in sourcing processes. Specifically, communication and coordination between supplier and client teams in knowledge processes, such as knowledge transfer/sharing, knowledge-based coordination and expertise management, are influenced by contextual factors, among which cultural understanding often has an intangible but significant impact because partners’ cultural understanding is locally situated, behavioral and embedded in everyday work practices (Weisinger & Trauth, 2002), and trust relationship also has profound impact because partners’ trust is an important aspect of social embeddedness in offshore IS projects (Rai, Maruping, & Venkatesh, 2009).

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