Explaining Reverse Outcome Tight Control: A Case Study of Mindless/Mindful Governance

In reverse outcome tight control, controlees’ behavior is correctly aligned with tight controls, but this results in harm to the project. Using the lens of mindfulness, our case study of a construction project reveals why mindless enactment of controls leads to reverse outcome tight control—controllers replace project feedback with feedback from controls. When a project has both unknown unknowns and tight control, controlees respond to tight controls instead of to unknown unknowns. Controlees behave as controllers expect, leading controllers to be unaware of brewing problems. One solution is “unprocess”—deliberately seeking information outside of standard project routines.

The impact of knowledge flows on asset specificity from the perspective of open innovation

Purpose

This study aims to examine how different modes of knowledge flows affect the changes of asset specificity and how ownership control moderates the relationship between knowledge flows and asset specificity in the open innovation paradigm.

Design/methodology/approach

This paper selects information technology outsourcing as the research base. It uses the feasible weighted least squares modeling method for its analysis and has collected the data from 2,369 research and development contracts of multinational vendor firms in China.

Findings

The coupled and outbound knowledge flows have a direct and positive effect on asset specificity. Moreover, the results show that weak corporate control has significant moderating effects on the relationship between both coupled and outbound knowledge flows and asset specificity; the strong control positively moderates the relationship between outbound knowledge flows and asset specificity.

Practical implications

In open innovation, firms build a higher degree of asset specificity to maximize the efficiency of knowledge flows, which then helps them to enhance innovation capacity and market performance.

Originality/value

Preceding studies have tended to examine the influences of asset specificity as an independent variable in a closed innovation paradigm. Asset specificity is hence often left as the antecedent “black box.” This paper, however, opens the “black box” of asset specificity, which is set as a dependent variable, by investigating the influences of knowledge flows on the asset specificity in the context of open innovation. It also reinterprets the role of asset specificity by adopting the lens of open innovation theory.

The contract-type choice for short-term software development outsourcing: The role of behaviour-based formal control

With this article, we contribute to the recent debate regarding the role of transaction cost economics in IT outsourcing and software development outsourcing research. Our focus is on the contract-type choice for short-term software development outsourcing. For this purpose, we critically examine transaction cost economics and the extant IT outsourcing/software development outsourcing literature and propose a framework which classifies software development outsourcing transactions according to transaction frequency and transaction investment characteristics. The framework identifies short-term software development outsourcing as an occasional, idiosyncratic transaction. Based on this groundwork, we clarify the concept of short-term contract and put forward that such a transaction is governed by a short-term contract. Following transaction cost economics and control theory, our resulting theoretical considerations infer that for short-term software development outsourcing, the vendor’s high human asset specificity and the resulting behaviour-based outcome control, the monitoring of the developer staff, are the triggers for contract-type decisions. Accordingly, staff monitoring by the client should result in Time & Material contracts, whereas staff monitoring by the vendor should result in Fixed Price contracts. We develop corresponding hypotheses which we test with 468 specific contract records for short-term software development outsourcing. The results confirm the transaction cost economics–based recommendations for contract-type choice. We therefore conclude that the advice of the transaction cost economics to use certain governance structures according to transaction attributes is also applicable to IT outsourcing/software development outsourcing transactions. We suggest further exploration of specific contract records to substantiate our results.

Behavior‒Output Control Theory, Trust and Social Loafing in Virtual Teams

Social loafing, the act of withholding effort in teams, has been identified as an important problem in virtual teams. A lack of social control and the inability to observe or trust that others are fulfilling their commitments are often cited as major causes of social loafing in virtual teams where there is geographic dispersion and a reliance on electronic communications. Yet, more research is needed to better understand such claims. The goal of this study was to examine the impact of control and trust on social loafing in virtual teams. To accomplish this, we proposed and empirically tested a multi-level research model that explains the relationships among team controls, trust, social loafing, and team performance. We tested the model with 272 information technology employees in 39 virtual teams. Results indicate that control and trust reduce social loafing separately and also jointly.

The influence of PRINCE2 standard on customer satisfaction in information technology outsourcing: an investigation of a mediated moderation model

Purpose

The purpose of this paper is to explore the influence of PRINCE2 (PRoject IN Controlled Environments 2) standard on customer satisfaction jointly with vendor relationship management capability in the information technology outsourcing (ITO) context. This paper further tries to explore the above underlying mechanism by studying the mediating effect of deliverable quality.

Design/methodology/approach

This paper develops a mediated moderation model to explain the underlying influence processes of PRINCE2 standard, vendor relationship management capability and deliverable quality on ITO customer satisfaction. By conducting a pair-wise survey of 260 project managers in seven Iranian firms, the model and hypotheses are empirically tested with the partial least squares method.

Findings

Our results suggest that firms benefit more in terms of IT costs reduction when they have a higher level of complementary investment in an external standard, especially through an interplay effect of the external standard and internal relational aspect. Firms can make business processes more amenable to outsourcing and facilitate monitoring of vendor performance and effective coordination with vendors. More interestingly, we find that this interactive effect is fully mediated by deliverable quality, which, in turn, directly increases ITO customer satisfaction.

Originality/value

This study adds some new knowledge and provides new views to study ITO customer satisfaction by addressing the importance of PRINCE2 standard. This study further enhances our understanding in terms of the underlying pathway through which the PRINCE2 standard jointly affects customer satisfaction with vendor relationship management capability and deliverable quality. With the effort of explicitly explaining the complex mechanisms, this study helps ITO managers proactively escort outsourcing activities and projects.

Business model innovation and value-creation: the triadic way

Purpose

Building on the multi-divisional business model (M-model), the purpose of this paper is to develop a better understanding of triadic business models – T-models – and how they create value for their three categories of stakeholders, i.e., the suppliers, the platform firm and the buyers. The research question that guides the present study is twofold: How is value created individually and collectively in triadic business models and what might challenge their sustainability?

Design/methodology/approach

Anchored in extant literature and a process of conceptual modeling with empirical examples from Uber, a new business model archetype was developed for two-sided markets mediated by a middleman.

Findings

The paper provides a theoretically and conceptually derived roadmap for sustainable business in a triadic business model, i.e., for the buyers, sellers and the platform firm. This model is coined the T-model. A number of propositions are derived that argue the relationship between key constructs. Finally, the future beyond the T-model is explored.

Research limitations/implications

The paper identifies, illustrates and discusses the ways in which value is created in sustainable T-models. First, value is created from a number of sources, not only from lower transaction costs. Second, it is proposed that it is not about a choice of either M-model or T-model but rather a continuum. Toward 2050, technology in general and Blockchain specifically may for some transactions or services, eliminate the need for middlemen. The main conclusion is that despite this development, there will, for most organizations, be elements of the M-model in all or most T-model businesses. In short: middlemen will have elements of the M-model embedded in the T-model when co creating value with buyers and sellers.

Originality/value

While two-sided T-models are not new to the business area, surprisingly no papers have systematically investigated, illustrated, and discussed how value is created among and between the three stakeholder categories of the T-model. With this insight, more sustainable T-models can be created.

Perceptions of control legitimacy in information systems development

Purpose

Existing studies of information systems development (ISD) control commonly examine controller-centric considerations, such as the antecedents and performance impacts of control mode choices. In contrast, little is known about the controllee-centric factors that may influence the effectiveness of control activities. Drawing on institutional theory, the purpose of this paper is to introduce the concept of control legitimacy to the ISD literature – a concept that past organizational research has linked to outcomes such as employee commitment and performance. Specifically, the authors explore how different dimensions of control activities (mode, degree, style) relate to controllee perceptions of control legitimacy in terms of justice, autonomy, group identification, and competence development.

Design/methodology/approach

Interviews were conducted with 20 practitioners across three companies. A structured data coding approach was employed and analysis was conducted within and across each case study.

Findings

The authors find that the control degree and control style can help explain control legitimacy perceptions better than control modes alone. For example, the results suggest that formal controls enacted in a bilateral style correspond with higher perceptions of justice and autonomy, when compared to formal controls enacted in a unilateral style.

Originality/value

The study results imply that ISD managers should be increasingly mindful of enacting controls in a way that is perceived to be legitimate by subordinates, thereby potentially enhancing both staff well-being and ISD performance.

Information Systems Projects and Individual Developer Outcomes: Role of Project Managers and Process Control

We integrate control theory and the information systems (IS) project management literature using a multilevel lens to theorize the cross-level effects of technical IS project risk on individual developer outcomes—performance and psychological stress—and the mechanisms by which IS project managers’ project-related knowledge attenuates this relationship. We argue that IS project managers with project-related knowledge mitigate technical IS project risk by facilitating the enactment of internal and external process controls in their IS projects. Our empirical study involves data collected from 1,230 individual developers embedded in 130 IS project teams that are managed by 20 IS project managers. Our results provide strong support for the three-level model and its set of (a) cross-level main effects of technical IS project risk on individual developer outcomes; (b) cross-level main effects of IS project manager project-related knowledge on enacted internal and external process controls; and (c) cross-level moderation of the relationship between technical IS project risk and individual developer outcomes by IS project manager project-related knowledge through internal and external process controls. Our study provides insights on how IS project management, IS project process controls, and technical IS project risk must be managed as a system of multilevel dependencies to achieve the desired developer outcomes.

The online appendix is available at https://doi.org/10.1287/isre.2017.0723 .

Aligning flexibility with uncertainty in software development arrangements through a contractual typology

Purpose

The purpose of this study is to identify a typology of procurement contracts in the context of software development projects that allows firms to align design flexibility with design uncertainty at the project level. The theoretical lenses of contract theory and software engineering are used to explain why the five archetypes in the proposed typology provide gradually increasing levels of design flexibility and to develop hypotheses about the associations between design flexibility and a set of project cost dimensions.

Design/methodology/approach

The hypotheses are tested with objective contractual data from 270 software development contracts entered into by a leading international bank over a period of three years.

Findings

Data analysis confirms the existence of the proposed typology and shows that design flexibility is negatively associated with control and positively associated with coordination, trust, duration and price.

Research limitations/implications

Although the findings are based on the contracting practices of a single, albeit sophisticated, organization, they shed light on the ability of firms to align flexibility with uncertainty at the onset of new projects by taking advantage of nuanced contractual mechanisms to produce a broader set of contractual archetypes.

Originality/value

This paper is the first in the outsourcing literature to analyze a nuanced contractual typology in software development projects through the perspectives of both contract theory and software engineering.

Trust in Cloud Computing

Trust is an important facilitator for successful business relationships and an important technology adoption determinant. However, thus far trust has received little attention in the context of cloud computing, resulting in a lack of understanding of the dimensions of trust in cloud services and trust-building antecedents. Although the literature provides various conceptual models of trust for contexts related to cloud computing that may serve as a reference, in particular trust in IT outsourcing providers and trust in IT artifacts, idiosyncrasies of trust in cloud computing require a novel conceptual model of trust. First, a cloud service has a dual nature of being an IT artifact and a service provided by an organization. Second, cloud services are offered in impersonal cloud marketplaces and build upon a nested network of cloud services within the cloud ecosystem. In this article, we first analyze the concept of trust in cloud contexts. Next, we develop a conceptual model that describes trust in cloud services. The conceptual model incorporates the duality of trust in a cloud provider organization and trust in an IT artifact, as well as trust types for the impersonal environment and the cloud computing ecosystem. Using the conceptual model as a lens we then review 43 empirical studies on trust in IT outsourcing and trust in IT artifacts that were identified by a structured literature search. The resulting conceptual model provides a conceptual typology of constructs for trust in cloud services, defines trust-building antecedents, and develops 19 propositions describing the relationships between trust constructs and between trust constructs and trust-building antecedents. The conceptual model contributes to research by creating grounds for future theory-building on trust in cloud contexts, integrating two previously disjoint strands in the trust literature, and identifying knowledge gaps. Based on the conceptual model, we furthermore provide practical advice for managers from service providers, platform providers, customers, and institutional authorities.

Coordinating the processes of resource enrichment and capability deployment

Purpose

– The purpose of this paper has been to address the research question of how are the processes of resource enrichment and capability deployment coordinated during information technology (IT) implementation at a small- and medium-sized accounting firm (SMAF)? Increasingly, organizations need to respond to a wide range of IT-based opportunities and pressures. The situation is no different in an accounting firm. Many accounting practitioners have advocated investment in IT to improve accounting firms’ productivity. To date, there are many instances of how IT has radically transformed the nature of accounting practice. Nevertheless, little is known about how IT capability is developed in SMAFs. In particular, the resource enrichment process during IT capability development has been understudied.

Design/methodology/approach

– The strategy of this paper was to undertake qualitative case research of an ERP systems upgrading project at SMAF. The case study approach is particularly appropriate for this exploratory study because it allows the capture of organizational dynamics of the phenomenon better (Newman and Sabherwal, 1996; Yin, 2003). Its strength also lies in its ability to explain the phenomenon based on the interpretation of data (Klein and Myers, 1999). Next, the paper will explain the case study approach. It approached fieldwork at SMAF, with a premise that resource enrichment and capability development exist and are identifiable using an existing theoretical lens. Accordingly, this study draws on Sirmon et al. (2007) ’s concept of resource enrichment process and objectively studied the IT capability development process through the resource enrichment lens. At the same time, it was recognized that resource enrichment and capability development may have their own unique characteristics, unrelated to any theoretical models offered in the organizational literature.

Findings

– The purpose of this paper has been to address the research question of how resource enrichment process may occur during IT capability development process of an SMAF. This study used a resource-based view of firms as its analytical lens. The study has drawn on SMAF’s sage ACCPAC ERP solution (ACCPAC) system upgrading experience by interviewing relevant project stakeholders and reviewing secondary data extensively. Our analysis identified two actions that were instrumental in enriching resources in the IT capability development process: collective leadership and managing change. Three attributes that supported the resource-enrichment process include effective governance structure, extensive IT knowledge and business experience, and stakeholder commitment. In addition, two coordinating mechanisms were put in place to enable an organization to transform existing resource and capability: informational and IT structure.

Originality/value

– From research point of view, this paper makes several theoretical contributions. First, this study has contributed to the accounting information systems literature by examining the transformation processes of resource and capability enrichment during IT implementation of a context that is little known. It helps to address the call for more research into IT use and the impact of such tools by SMAFs by Omoteso and Sangster (2011). Second, this study extends the understanding of the IT capability development process by demonstrating how an organization developed IT capability. Through this case, how fundamental resources can be leveraged through specific actions and strategies undertaken have been uncovered. The empirical evidence gathered in the case of SMAF provides useful insights into how resources and capabilities may be enabled. Third, the coordination of the resource and capability transformation contributes to theory development as the coordination mechanisms derived from this analysis offer an insights into how a set of enriched resources and capabilities are synchronized during IT implementation.