"Structure" and "process" congruence : a control theory perspective on services offshoring performance

Prior research on services offshoring has found control theory to be a useful perspective for examining the co-ordination between the client and the vendor. Control literature describes two primary control modes - formal and informal control modes, classified as behavior, outcome, clan and self-control modes. But most control literature has focused on examining either the conditions for adopting a particular control mode or investigating the influence of the chosen control mode(s) on the project performance. Recent services offshoring research has uncovered two distinct control mechanisms comprising each of the control modes namely, structural and process mechanisms. Structural control mechanism describes the ‘what' or the structure guiding the control mode, whereas process control mechanism explains ‘how' or the process through which the control mode is enacted. Grounding our arguments in the alignment literature, we theorize the need for congruence between the control ‘structures' and ‘processes' within each of the control modes for effective project performance. In effect, we posit the moderating role of control processes on the relationship between control structures and contract performance. The theorized model is tested through data collected from a field study comprising offshore services projects executed by offshore vendors. Results demonstrate that governance ‘alignment' or ‘congruence' leads to superior project performance. The study makes contributions to both services offshoring literature as well as provides useful practical implications for managers