IT Offshoring: Views from Client and Vendor Perspectives

IT Offshoring: Views from Client and Vendor Perspectives

Hajer Kefi (Paris Descartes University, France), Alya Mlaiki (Strasbourg University, France) and Richard L. Peterson (Montclair State University, USA)
DOI: 10.4018/jitpm.2011100103
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Abstract

This article is about the role played by trust in structuring and shaping offshoring projects and how cultural differences interfere in the related inter-firms relationships. This study, conducted with three IT service provider companies established in Tunisia, has provided a dataset that has confirmed the structuring role of trust in terms of transferability effect between the client and the offshoring unit. The findings also indicate that trust is perceived as an influencing factor when it is situated at the inter-organizational level and not at the interpersonal level for all the actors concerned. This finding is independent of the cultural affiliation (individualistic versus collectivist). While cultural differences are not “negotiated” the same way by all of our respondents, trust seems noticeably more difficult to settle between the Tunisian partners than between the Tunisian offshoring unit and its European clients.
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Introduction

This paper is aimed at providing insights into offshoring activities by focusing specifically on the role of trust in structuring and shaping offshoring processes and also by exploring how cultural differences interfere within offshoring dyads. Numerous researchers in information systems and organization science have provided evidence about the role of trust in strengthening and stabilizing business relationships (Marandon, 2003; Ring & Van de Ven, 1994; Olsson, Conchuir, Agerfalk, & Fitzgerald, 2008; Sun, Lin, & Sun, 2002; Cohen & El-Sawad, 2007; Mumbi & McGill, 2008; Siakas & Siakas, 2008; Karlsen, Græe, & Massaoud, 2008). It has been demonstrated indeed that trust allows firms to reduce transaction costs (Zaheer, McEvily, & Perrone, 1998; Dyer & Chu, 2003; Simon, 2007) and to deal with conflicts and social complexity (Luhmann, 2006; Giddens, 1994; Arrow, 1974). Following the tradition started by outsourcing studies, offshoring can be examined through an economic lens as a means to reduce costs (Williamson, 1985, 1993).

With regard to the research issue discussed in this paper, the literature provides very rich insights on two separate perspectives: the first one addresses the role of culture within offshoring relationships (Gopal, Willis, & Gopal, 2003; Cohen & El Sawad, 2007) and the second perspective is focused on the role of culture in shaping trust between individuals and entities (Ting Toomey, 1999; Dyer & Chu, 2003; McEvily, Perrone, & Zaheer, 2003; Huff & Kelley, 2003; Zaheer & Zaheer, 2006; Ueltschy, Ueltschy, & Fuchinelli, 2007; King & Torzadeh, 2008). However, research studies that yield a set of generalizable propositions about the triad “trust,-culture, and offshoring” are rare and require a deeper investigation effort. Our study is aimed at filling this gap.

We propose to conceptualize trust as an organizing principle in order to describe and analyze the offshoring interrelationships (Delerue & Berard, 2007; Dyer, 1997; McEvily et al., 2003; Charreaux, 1998; Thuderoz, 1999). In this paper we will discuss this theoretical choice and explain how it has been applied as an investigation canvas through which we have explored the role played by trust in shaping the offshoring relationship established between three entities: a global IT vendor (France), its offshore unit (Tunisia), and their clients, with regard to the respective national cultures of all these actors.

We have also started to extend our empirical study by investigating how national culture interferes in shaping trust between offshoring/versus outsourcing relationships, specifically in the country of the offshore destination (Tunisia).

Our paper is organized as follows: we first present our theoretical foundations articulated around three key concepts: offshoring, trust, and culture. We then display our research strategy. The paper concludes with a discussion about the limitations of this study and its implications for practice and research.

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