A Research Framework for the Impact of Cultural Differences on IT Outsourcing

Abstract

Contracting Global Virtual Teams as part of global IT outsourcing is currently en vogue. As might be expected when virtual team members are from different countries, cultural factors play an important role in the success of outsourcing. However, there have been very few studies that assess the effect of culture on IT outsourcing and virtual teams. This conceptual paper addresses this oversight by looking at the effect of cultural differences on IT outsourcing and virtual teams' performance. The applicable literature on outsourcing, virtual teams and culture is analyzed and a framework of offshore outsourcing success is developed. This framework includes the concept of psychic distance to better understand the phenomenon of virtual teams and outsourcing success. Adding this as a key research component provides a more realistic way of researching global virtual teams. Future directions for research based on the developed framework are also provided. By assessing the cultural differences of virtual teams in IT outsourcing, our research framework will help academics pursue this growing business phenomenon.

KEY WORDS:

• Global Virtual Teams
• Offshore Outsourcing
• Culture
• Psychic Distance

Additional information

Notes on contributors

Anil Gurung

Anil Gurung is a Doctoral Candidate in the Department of Information Systems and Operations Management, the University of Texas at Arlington. He holds dual MBA degrees majoring in Computer Information Systems and Finance. His research interests focus on IT organizations, global IT management, information security, ecommerce and cultural and social aspects of business computing. He has presented his research at national and international conferences.

Edmund Prater

Edmund Prater is an assistant professor of Operations Management in the College of Business Administration at the University of Texas-Arlington. He received his Ph.D. in Operations Management from the Georgia Institute of Technology. He also holds a B.S. in Electrical Engineering from Tennessee Technology University and M.S. degrees in both Electrical Engineering and Systems Analysis from Georgia Tech. Previous to obtaining his Ph.D., he operated an import/export firm with offices in Moscow and Saint Petersburg, Russia. His current research interests include international logistics, outsourcing, small and medium sized businesses, and logistics.