In this paper the authors present the results of a research project that strives to fill a literature gap in IT offshore outsourcing research by analyzing clientside managerial mechanisms for the effective knowledge transfer from client to vendor organization. 31 qualitative interviews were conducted and analyzed using the grounded theory development methodology. A key finding is that client firms cannot rely solely on the capabilities of IT service providers and must actively involve themselves in the transfer, accumulation, and use of business knowledge, process knowledge, and functional knowledge in the client-vendor relationship.
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