The effective promotion of informal control in information systems offshoring projects

Abstract

As firms increasingly engage in interorganizational information systems (IS) projects, including IS offshoring projects, the challenge for client firms of effectively exercising control across organizational boundaries becomes critical. Although the importance of informal controls (clan and self-control) in this context has been recognized, prior research has focused primarily on formal controls. Consequently, our understanding of the use of clan and self-control in interorganizational IS projects is scarce, and partly inconsistent or contradictory. This study focuses the client’s role in promoting informal controls in interorganizational projects involving distant client–vendor relationships as well as the effectiveness of such controls. We use matched-pair survey data from 86 IS offshoring projects involving client and vendor relationship managers. Our results show an interesting pattern: while clan control is considerably more difficult to promote than self-control in client–vendor project relationships, only clan control has a direct positive impact on project performance. Moreover, formal control modes, national cultural values, and project context factors moderate both the promotion and the effectiveness of informal controls. Our study’s main contributions lie in establishing the relevance of the distinction between informal control given and received, and the importance of the client’s role in promoting informal controls.

Keywords:

• IS offshoring
• project performance
• organizational control theory
• informal control
• control promotion/transmission

Additional information

Notes on contributors

Martin Wiener

About the authors

Martin Wiener is Assistant Professor in Information Systems at the University of Erlangen-Nuremberg. He is currently Visiting Faculty in the Department of Management and Organization at the Stockholm School of Economics. His research concerns IS project control, IT multi-sourcing strategies, and IT-related information overload, and has been published in outlets such as Information Systems Journal, Journal of Information Technology, Business & Information Systems Engineering, Communications of the AIS, and Journal of Global Information Management.

Ulrich Remus

Ulrich Remus is Professor at the University of Innsbruck. His research areas include process and knowledge management as well as IS project success and failure. His work has appeared in Information Systems Journal, Information Systems Management, Journal of Information Technology, Journal of Global Information Management, Business Process Management Journal, and Journal of Knowledge Management.

Jakob Heumann

Jakob Heumann is Ph.D. student in Information Systems at the University of Erlangen-Nuremberg. His doctoral thesis deals with the control of global IS projects as well as the interplay between control and (national) culture. His research has been published in Journal of Information Technology and major IS conference proceedings (International Conference on Information Systems, European Conference on Information Systems, and Americas Conference on Information Systems).

Magnus Mähring

Magnus Mähring is Associate Professor at the Stockholm School of Economics. His research focuses on IT project governance, executive involvement and project escalation. He has published in Decision Sciences, Journal of the AIS, Information Systems Journal, Journal of Information Technology, Journal of Strategic Information Systems, California Management Review, and Communications of the ACM.