Formal Control, Social Control and Guanxi in IT Outsourcing: A Study in Chinese Firms

摘要

Despite the fast growing trend, it is reported that IT outsourcing in China is fraught with high rates of failure. The buyers of IT outsourcing services in China face difficulties in selecting service providers, negotiating managing contracts, and maintain good relationship due to a lack of systematic guidelines on which governance mechanism to deploy to manage outsourcing contracts. This research endeavors to study whether the governance mechanisms (i.e. formal control and social control) adopted in Western countries are prevalent in China, but to critique such governance mechanisms in light of the unique cultural context in China where 'guanxi' is seen to be a key enabler of outsourcing. A significant contribution study to theory is to look into IT outsourcing phenomenon with a balanced view and through an integrated theoretical lens.