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Title: Strategic innovation through outsourcing: the role of relational and contractual governance
Authors: Oshri, Ilan
Kotlarsky, Julia
Gerbasi, Alexandra
Keywords: Outsourcing
Strategic innovation
Quality of client-supplier relationship
Fixed-price contract
Time and materials contract
Joint venture contract
Client contract portfolio
Issue Date: 2015
Publisher: © Elsevier
Citation: OSHRI, I., KOTLARSKY, J. and GERBASI, A., 2015. Strategic innovation through outsourcing: the role of relational and contractual governance. Journal of Strategic Information Systems, 24(3), pp. 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.
Description: This paper was accepted for publication in the journal Journal of Strategic Information Systems and the definitive published version is available at http://dx.doi.org/10.1016/j.jsis.2015.08.001
Version: Accepted for publication
DOI: 10.1016/j.jsis.2015.08.001
URI: https://dspace.lboro.ac.uk/2134/19761
Publisher Link: http://dx.doi.org/10.1016/j.jsis.2015.08.001
ISSN: 0963-8687
Appears in Collections:Published Articles (Business)

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