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Research Note ---The Role of Organizational Controls and Boundary Spanning in Software Development Outsourcing: Implications for Project Performance

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  • Anandasivam Gopal

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

  • Sanjay Gosain

    (Capital Group Companies, Inc., Irvine, California 92618)

Abstract

Past research has studied how the selection and use of control portfolios in software projects is based on environmental and task characteristics. However, little research has examined the consequences of control mode choices on project performance. This paper reports on a study that addresses this issue in the context of outsourced software projects. In addition, we propose that boundary-spanning activities between the vendor and the client enable knowledge sharing across organizational and knowledge domain boundaries. This is expected to lead to facilitation of control through specific incentives and performance norms that are suited to client needs as well as the vendor context. Therefore, we argue that boundary spanning between the vendor and client moderates the relationship between formal controls instituted by the vendor on the development team and project performance. We also hypothesize the effect of collaboration as a clan control on project performance. We examine project performance in terms of software quality and project efficiency. The research model is empirically tested in the Indian software industry setting on a sample of 96 projects. The results suggest that formal and informal control modes have a significant impact on software project outcomes, but need to be finely tuned and directed toward appropriate objectives. In addition, boundary-spanning activities significantly improve the effectiveness of formal controls. Finally, we find that collaborative culture has provided mixed benefits by enhancing quality but reducing efficiency.

Suggested Citation

  • Anandasivam Gopal & Sanjay Gosain, 2010. "Research Note ---The Role of Organizational Controls and Boundary Spanning in Software Development Outsourcing: Implications for Project Performance," Information Systems Research, INFORMS, vol. 21(4), pages 960-982, December.
    • Handle: RePEc:inm:orisre:v:21:y:2010:i:4:p:960-982
    DOI: 10.1287/isre.1080.0205
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    6. Liu, Shan & Deng, Zhaohua, 2015. "How environment risks moderate the effect of control on performance in information technology projects: Perspectives of project managers and user liaisons," International Journal of Information Management, Elsevier, vol. 35(1), pages 80-97.
    7. Bent Flyvbjerg & Alexander Budzier & Jong Seok Lee & Mark Keil & Daniel Lunn & Dirk W. Bester, 2022. "The Empirical Reality of IT Project Cost Overruns: Discovering A Power-Law Distribution," Papers 2210.01573, arXiv.org.
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    10. Marfri Gambal & Aleksandre Asatiani & Julia Kotlarsky, 2022. "Strategic Innovation Through Outsourcing: A Theoretical Review," Papers 2206.00982, arXiv.org.
    11. Iván Alfaro & Ranganathan Chandrasekaran, 2015. "Software Quality and Development Speed in Global Software Development Teams," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 57(2), pages 91-102, April.
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    13. Yang, Feifei & Shinkle, George A. & Goudsmit, Mirjam, 2022. "The efficacy of organizational control interactions: External environmental uncertainty as a critical contingency," Journal of Business Research, Elsevier, vol. 139(C), pages 855-868.
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    15. Lee, Kyootai & Woo, Han-Gyun & Joshi, Kailash, 2017. "Pro-innovation culture, ambidexterity and new product development performance: Polynomial regression and response surface analysis," European Management Journal, Elsevier, vol. 35(2), pages 249-260.
    16. Liu, Shan & Wang, Lin & Huang, Wei (Wayne), 2017. "Effects of process and outcome controls on business process outsourcing performance: Moderating roles of vendor and client capability risks," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1115-1128.
    17. Karimikia, Hadi & Bradshaw, Robert & Singh, Harminder & Ojo, Adegboyega & Donnellan, Brian & Guerin, Michael, 2022. "An emergent taxonomy of boundary spanning in the smart city context – The case of smart Dublin," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    18. Burcu Tan & Edward G. Anderson, Jr. & Geoffrey G. Parker, 2020. "Platform Pricing and Investment to Drive Third-Party Value Creation in Two-Sided Networks," Information Systems Research, INFORMS, vol. 31(1), pages 217-239, March.
    19. Subroto Roy & K. Sivakumar, 2014. "Which controls are better for service outsourcing? Integrating service-dominant logic and service characteristics," AMS Review, Springer;Academy of Marketing Science, vol. 4(3), pages 45-62, December.
    20. Carol Hsu & Jae-Nam Lee & Yulin Fang & Detmar W. Straub & Ning Su & Hyun-Sun Ryu, 2022. "The Role of Vendor Legitimacy in IT Outsourcing Performance: Theory and Evidence," Information Systems Research, INFORMS, vol. 33(1), pages 337-361, March.

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