| Organizations constantly engage in relationships with other organizations. Theseinterorganizational relationships (IORs) can take several forms such as joint ventures,network structures, alliances, mergers and acquisitions, consortia, and outsourcingarrangements (Barringer & Harrison, 2000). IORs, in various forms, within differentindustries such as pharmaceuticals, technology, and manufacturing are growingrapidly. This growth suggests that organizations realize potential for value creationin developing IORs (Doz & Hamel, 1998; Dyer & Singh, 1998) and their activities areembedded in a constellation of IORs (Das & Teng, 2002; Kenis & Knoke, 2002).Although majority of literature in this field seeks to explain the formation of IORs(Barringer & Harrison, 2000: 368), failure of such relationships to achieve expectedobjectives has also attracted significant academic attention. Several studies reportfailure rates of around 50 to 70 percent for IORs (e.g., Porter, 1987). Scholars advocatediverse reasons for failure such as, amongst others, incongruent objectives (Kale etal., 2000), opportunism (Park & Ungson, 2001), improper partner selection (Ireland etal., 2002), and breach of trusts (Gill & Butler, 2003) etc.Ring and Van de Ven (1994: 97) suggest that development of an IOR proceeds in arepetitive sequence of negotiation, commitment, and execution stages, each of whichis assessed in terms of efficiency and equity . Several reasons for failure are realizedduring the execution stage, when the commitments and rules of action are carriedinto effect (Ring & Vandeven, 1994) or when firms begin to connect with eachother (van Heck & Vervest, 2007). Park and Ungson, for example, note that AT&TOlivettialliance in the early 1980s was considered a perfect match, at least ineconomic terms. Despite such strong economic and strategic compatibility, however,this alliance was troubled from the beginning, primarily due to managerial andorganizational incompatibility (2001: 44). They further claim that such alliances failbecause they require excessive effort to coordinate and integrate two independentorganizations . The potential for value creation from an IOR or constellation of IORsis, hence, inhibited by challenges in executing these relationships.To advance our understanding of execution of IORs, this dissertation focuses onstudying the executional challenges of a specific form of an IOR informationsystems (IS) offshore outsourcing relationship. We find an increasing proliferation ofoutsourcing due to intense global competition that forces organizations to reducecosts, improve responsiveness and focus on core operations (Lacity et al, 1995; Quinn& Hilmer, 1994). Several reports suggest information technology (IT) outsourcing ison the rise (Businessweek, 2006; Gartner, 2006; NY Times, 2007), but much ofacademic and practitioner research shows that its execution is fraught withchallenges (Lacity & Willcocks, 1998; Levina & Ross, 2003) and high failure rates(CIO, 2006).In addition to traditional outsourcing, sophistication of data and communicationtechnologies, availability of skilled IT personnel and comparative costs of ISdevelopment (ISD) across the world are encouraging firms to offshore IS work (e.g.,Carmel & Agarwal, 2002, Lewin & Peeters, 2006). According to many industryreports, IT offshoring1, which refers to locating activity [such as IS development andmaintenance activities] to [either] a wholly owned company or an independent service provider in another country (usually low cost) (Lewin & Peteers 2006: 221),is witnessing unprecedented growth and the trend is expected to continue in the nearfuture. Willcocks and Lacity (2006) predict that offshore IT outsourcing market willexceed US $25 billion in 2008 and is expected to grow at compounded growth rate oftwenty percent per year for next five years. Although offshoring of IS activities isproliferating, generating value from such initiatives is filled with challenges andrequires substantial effort from organizations e.g.(Carmel & Tjia, 2005; Robinson &Kalakota, 2004; Rottman & Lacity, 2006). This scenario motivates to choose ISoffshore outsourcing as the setup for this study.This thesis proposal is organized as follows: next section, discusses research problemand setting, followed by theoretical background and research design, then threestudies making up the thesis are introduced. In the end, relevance and contributionof thesis and dissertation planning is discussed |
