Contractual Misincentives in the Outsourcing of Information Technology: A Principal-Agent Approach

Nepomuceno, Thyago Celso Cavalcante; Nepomuceno, Késsia Thais Cavalcanti; Costa, Ana Paula Cabral Seixas

doi:10.1007/978-3-319-31816-5_3928-1

Cited by 4 publications

(8 citation statements)

References 13 publications

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“…This is also in line with Nepomuceno et al. (2018, 2020, 2022) misincentive perspective by stating that increasing service costs depend on the expected returns from past low-performance agreements.…”

Section: Introductionsupporting

confidence: 75%

Relational governance in the ITO: the role of self-determination theory and the mediating effect of control perceived

Braga de Oliveira Friaes,

Poleto,

Negreiros Clemente

et al. 2023

ARLA

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PurposeResearchers in the field recognize the importance of the relationship between contractor and contractee in the process of information technology (IT) outsourcing. However, little is known about the impact of the manager's profile in this process. Thus, the objective of this research was to analyze the impact of the perception of competence, autonomy and relationship of public managers on relational governance (RG), as well as, to identify the effect of perceived control in this relationship.Design/methodology/approachThis study uses a quantitative approach to investigate the impact of the behavioral characteristics of IT managers from the self-determination theory (SDT). The data were collected in Brazilian public institutions active in the areas of education, finance, statistics and technology, and the hypotheses were identified and evaluated using the technique of partial least squares structural equation modeling (PLS-SEM).FindingsThe results identified that managers' self-determination is related to the perception of control, which, consequently, impacts the RG by providing feelings of competence and autonomy capable of building a beneficial relationship with the IT provider.Practical implicationsThis study promotes the understanding that upper management needs to support the autonomy of managers to increase their levels of intrinsic motivation when managing supplier deliveries.Originality/valueThe application of SDT to the IT outsourcing context provides new insights into the mediation of perceived control by explaining the relationship between managers' expectations and motivations as an important driver for RG.

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Section: Introductionsupporting

confidence: 75%

Relational governance in the ITO: the role of self-determination theory and the mediating effect of control perceived

Braga de Oliveira Friaes,

Poleto,

Negreiros Clemente

et al. 2023

ARLA

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“…This scenario highlights the association with the consequence of exploiting vulnerabilities when these factors are identified. These results confirm how changes and wrong configurations can be overflowing the infrastructure of telehealth servers [47][48][49].…”

Section: Outputs Of Scenario Analysissupporting

confidence: 66%

Fuzzy Cognitive Scenario Mapping for Causes of Cybersecurity in Telehealth Services

et al. 2021

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Hospital organizations have adopted telehealth systems to expand their services to a portion of the Brazilian population with limited access to healthcare, mainly due to the geographical distance between their communities and hospitals. The importance and usage of those services have recently increased due to the COVID-19 state-level mobility interventions. These services work with sensitive and confidential data that contain medical records, medication prescriptions, and results of diagnostic processes. Understanding how cybersecurity impacts the development of telehealth strategies is crucial for creating secure systems for daily operations. In the application reported in this article, the Fuzzy Cognitive Maps (FCMs) translated the complexity of cybersecurity in telehealth services into intelligible and objective results in an expert-based cognitive map. The tool also allowed the construction of scenarios simulating the possible implications caused by common factors that affect telehealth systems. FCMs provide a better understanding of cybersecurity strategies using expert knowledge and scenario analysis, enabling the maturation of cybersecurity in telehealth services.

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“…According to Nepomuceno, Nepomuceno & Costa (2020), the influence of extrinsic incentive structures of sanctions and rewards is investigated in many sectors of economic activities, public governance, and works on information systems. Nevertheless, there is a gap in proper quantitative modeling on IT services.…”

Section: The Problem Of Misincentivesmentioning

confidence: 99%

When Penalty Fails: Modeling Contractual Misincentives With Evidence From Portugal ITO Agreements

Nepomuceno

Poleto

et al. 2022

Sage Open

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A misincentive is characterized as an incentive producing the opposite effect of motivating or preventing some specific action. In some circumstances, contract penalties such as sanctions and fines on late delivery or low-quality software encourage the irregularities instead of preventing them from occurring. The present study models misincentive behaviors in Information Technology Outsourcing (ITO) transactions as a Principal-Agent problem. Considering the non-linear relationship in software vendors’ cost structure and the client’s sensitivity to the product/service quality and delivery time, we offer theoretical modeling elucidating the best responses on agreements under incomplete and asymmetric information. Some empirical evidence of contractual misincentives is reported in outsourcing arrangements between private institutions and public administrations in Portugal. The contracts were divided into three categories: pure contracts with no incentive clauses, contracts with no explicit monetary penalties, and contracts under explicit sanctions. The results suggest that the knowledge of the penalty reduces the Agent’s uncertainty about the Principal’s cost structure and might lead them to intentionally delay the delivery of the technology.

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Contractual Misincentives in the Outsourcing of Information Technology: A Principal-Agent Approach

Abstract: The counter-effects of imposing penalty clauses in information technology outsourcing agreements.

Cited by 4 publications

References 13 publications

Relational governance in the ITO: the role of self-determination theory and the mediating effect of control perceived

Relational governance in the ITO: the role of self-determination theory and the mediating effect of control perceived

Fuzzy Cognitive Scenario Mapping for Causes of Cybersecurity in Telehealth Services

When Penalty Fails: Modeling Contractual Misincentives With Evidence From Portugal ITO Agreements

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