Conjunct roles of client and vendor control in offshore-outsourced project performance

Abstract

This study explores the conjunct roles of a series of formal and informal control mechanisms exerted, respectively, by client and vendor in offshore-outsourced project performance. Using a sample of 203 offshore projects executed by vendors in China, the results indicate that client process control enhances (or complements) the effect of vendor outcome control, yet impairs (or substitutes) the effect of vendor process control. Conversely, client outcome control enhances (or complements) the effect of vendor process control, yet impairs (or substitutes) the effect of vendor outcome control. Further, for the two informal control mechanisms, the results indicate that client relational control enhances (or complements) the effects of both vendor process and outcome control, whereas vendor clan control only enhances (or complements) the effect of client outcome control on offshore-outsourced project performance. These findings not only contribute new insights for the organisational control and the outsourcing literature, but also provide managerial guidance for client and vendor managers on how to exert and fine-tune their control mechanisms to promote project performance.

Keywords:

• control mechanism
• offshore
• outsourcing
• project management
• critical success factors

Notes

1. For conciseness, we only list IT-related projects such as software and information system development, as this sub-field is closest to our research topic.

2. In particular, vendors in Suzhou mainly serve clients from the US and Europe; vendors in Dalian attract mainly Asian clients from countries such as Japan and Korea; and vendors in Xi’an have a mixed composition of overseas clients.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [grant number 71572109], [grant number 71421002]; Program for Changjiang Scholars and Innovative Research Team in University [grant number IRT13030].