How does the power dynamics in the information technology outsourcing supply chain influence supplier's talent retention: a multiple case study

Abstract

PurposeThe purpose of this paper is to investigate how the power dynamics between the client firm and the supplier firm in the information technology outsourcing (ITO) supplier chain influence the supplier firm's human resource management (HRM) practices, particularly talent retention.Design/methodology/approachA multi-case study approach was adopted comprising four supplier firms, three client firms and a total of 53 interviews. The transaction cost economics (TCE) is the theoretical lens that guides the interpretation of our findings.FindingsThe power dynamics between client and supplier firms in the ITO supply chain is one underpinned by TCE theory, characterised by an asymmetric client-dominated, transactional relationship, with the client firms controlling the “why”, the “what”, and the “how” dimensions of their collaboration. This “three-dimensional control” led to high talent turnover in supplier firms, which boomerangs to perpetuate the power dynamic, forming “vicious cycles of talent turnover” in the ITO supplier chain. Originality/valueNo previous study has analysed power dynamics as an external factor on ITO supplier firms' talent retention. The construct of the “three-dimensional-control” offers a framework to study power dynamics in the ITO supplier chain. The study’s framework of the “vicious cycles of talent turnover” is the first that explains the mechanisms through which the power dynamics in the ITO influences supplier's talent retention.

Relational dynamics in information technology outsourcing: An integrative review and future research directions

“…Other studies consider either opportunism or obligation. Opportunism‐oriented studies identify factors responsible for cost escalations (Bahli and Rivard, 2013) and performance loss, including behavioural and requirements uncertainty (Jun et al., 2011; Mehta and Bharadwaj, 2015; Shi et al., 2005), power asymmetry (Zhang and Liang, 2022), goal misalignment (Huber et al., 2013; Lioliou et al., 2019), role conflict and ambiguity (Solli‐Saether, 2011), shirking, information misappropriation (Mathew and Chen, 2013), and intentional information distortion (Lioliou et al., 2019). However, stipulations in the ITO contract warrant the transacting parties to deliver on their obligations and promises.…”

“…Our final selection led to the following classification: 27 transaction-stage, 32 strategic-stage, 23 transformationstage, 5 termination-stage, and 40 across-stage articles. In terms of research design, there is a balanced Close project monitoring (Koh et al, 2004) Contract specificity & explicitness (Heuer de Carvalho et al, 2022;Koh et al, 2004;Srivastava and Teo, 2012) Goal misalignment (Huber et al, 2013;Kim et al, 2013) InformaƟon asset misappropriaƟon (Mathew and Chen, 2013) IntenƟonal informaƟon distorƟon (Lioliou et al, 2019) Role ambiguity (Solli-Saether, 2011) Shirking (Mathew and Chen, 2013) Short-term bias (Heuer de Carvalho et al, 2022;Koh et al, 2004) Behavioural & requirements un certainty (Jun et al, 2011;Lioliou et al, 2019;Mehta and Bharadwaj, 2015;Shi et al, 2005) Power asymmetry (Zhang and Liang, 2022) Periodic demand esƟmates (Sen et al, 2010) Opportunism opposes (Haried and Claybaugh, 2017;Susarla et al, 2010) ObligaƟon Governance ambidexterity…”