Which Control Strategies and Configurations Affect Performance? Evidence from Large Scale Outsourcing Arrangements

Nagpal, Pankaj; Lyytinen, Kalle; Boland, Richard J.

doi:10.2139/ssrn.1657743

Cited by 1 publication

(2 citation statements)

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“…While the research stream primarily emphasizes the use of high‐level formal organizational controls (e.g. SLAs) in influencing outsourcing success, recent research suggests that SLAs alone do not offer distinguishing value‐generation capability (Nagpal et al ., ). In contrast, such effects are largely due to the use of a variety of specific control mechanisms .…”

Section: Research Model and Hypothesesmentioning

confidence: 97%

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Outsourcing and Market Value of the Firm: Toward a Comprehensive Model

Nagpal

Nicolaou

Lyytinen

2014

Intell. Sys. Acc. Fin. Mgmt.

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SUMMARY We analyze the effect of buyer, contract, and vendor characteristics on abnormal stock returns among firms that have announced large scale Information Technology (IT) and Business Process outsourcing (BPO) contracts. We draw upon a comprehensive dataset on outsourcing announcements, augmented with data from public sources. Salient buyer factors examined include use of a wide range of organizational controls. On the vendor side, we examine the impact of vendor size, contract size and reputation. Our study shows that use of behavior controls, outcome controls (negative), vendor reputation, and industry of buyer firm affect market value. When limited to buyer related factors, use of behavior and clan controls is positively related to abnormal returns around IT outsourcing announcements. An interesting finding is that IT and BPO success require different sets of controls. Copyright © 2014 John Wiley & Sons, Ltd.

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Section: Research Model and Hypothesesmentioning

confidence: 97%

“…The routinized use of such controls constitutes a capability that is not easily replicated, and is therefore a source of competitive advantage. In addition, these results share interesting similarities with an independent study based on primary data (Nagpal et al ., ).…”

Section: Contributions and Implicationsmentioning

confidence: 97%