Intra-organizational information asymmetry in offshore ISD outsourcing

Abstract

Purpose -Contemporary offshore information system development (ISD) outsourcing is becoming even more complex. Outsourcing partner has begun "re-outsourcing" components of their projects to other outsourcing companies to minimize cost and gain efficiencies. This paper aims to explore intra-organizational information asymmetry of re-outsourced offshore ISD outsourcing projects. Design/methodology/approach -An online survey was conducted to get an overall view of information asymmetry between principal and agents (as per the agency theory). Findings -Statistical analysis showed that there are significant differences between the principal and agent on clarity of requirements, common domain knowledge and communication effectiveness constructs, implying an unbalanced relationship between the parties. Moreover, the authors' results showed that these three are significant measurement constructs of information asymmetry. Research limitations/implications -In this study the authors have only considered three main factors as common domain knowledge, clarity of requirements and communication effectiveness as three measurement constructs of information asymmetry. Therefore, researches are encouraged to test the proposed constructs further to increase its precision. Practical implications -The authors' analysis indicates significant differences in all three measurement constructs, implying the difficulties to ensure that the agent is performing according to the requirements of the principal. Using the agency theory as theoretical view, this study sheds light on the best contract governing methods which minimize information asymmetry between the multiple partners within ISD outsourcing organizations. Originality/value -Currently, to the best of the authors' knowledge, no study has undertaken research on intra-organizational information asymmetry in re-outsourced offshore ISD outsourcing projects.

Uncovering the knowledge coordination process in information and communication technologies services outsourcing from the provider’s perspective

“…Regarding ICT services, software development represents a significant case of teams that must be able to manage their skills and knowledge interdependencies to produce high-quality work (Maduka Nuwangi et al , 2014). From the provider’s perspective, individuals who are part of global software teams follow flexible, adaptable and informal coordination practices; in addition, technology plays an important part in setting up and initiating their work, as well as in executing tasks and coordinating work with other team members (Ambe et al , 2016).…”

Opportunism still remained alive: conditional limits of trust and contract in software projects

“…misappropriation of knowledge assets in adjusting interlinked tasks). Supply-side has a knowledge advantage of software development resources and capabilities (Bahli and Rivard, 2003; Nuwangi et al. , 2014).…”

“…misappropriation of knowledge assets in adjusting interlinked tasks). Supply-side has a knowledge advantage of software development resources and capabilities (Bahli and Rivard, 2003;Nuwangi et al, 2014). The holders of knowledge could opportunistically exploit information asymmetries to make product and process adjustments.…”