Paper Info
Title
Impact of Formal Controls on Client Satisfaction and Profitability in Strategic Outsourcing Contracts.
Abstract
The reach and impact of outsourcing has grown rapidly to include a variety of strategic objectives. Significant issues of cooperation and coordination in strategic outsourcing necessitate investments in formal controls that specify and monitor execution of the outsourced task to mitigate unforeseen contingencies and improve predictability in the attainment of desirable goals. In this study, we investigate the nature of formal controls in strategic outsourcing contracts and their impact on client satisfaction and financial performance. Specifically, using rich field data on 390 strategic outsourcing contracts, we examine the differential impact of output controls, activity controls, and capability controls on client satisfaction and vendor profitability. We find that activity and capability controls are positively associated with client satisfaction and profitability; in contrast, output controls differentially impact satisfaction and profitability, reflecting potential tradeoffs between the two outcomes. Our results, in addition to contributing to the research in control theory, provide actionable insights for technology vendors into the appropriate strategy and tactics required to compete efficiently and effectively in strategic services markets.
Year
DOI
Venue
2018
10.1080/07421222.2018.1522895
JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
Keywords
Field
DocType
outsourcing,strategic outsourcing,formal controls,client satisfaction,profitability,IT outsourcing,outsourcing controls
Information system,Customer satisfaction,Predictability,Field data,Computer science,Vendor,Knowledge management,Outsourcing,Profitability index,Strategic management
Journal
Volume
Issue
ISSN
35
4
0742-1222
Citations 
PageRank 
References 
0
0.34
18
Authors
2
Name
Order
Citations
PageRank
Nishtha Langer1464.13
Deepa Mani222612.54