Information systems outsourcing: Replicating an existing framework in a different cultural context

Abstract

Abstract In order for any field of study to refine the promising concepts and weed out the weaker concepts it is necessary that researchers revisit earlier studies from time to time and evaluate their general applicability to new contexts. Replication is an important technique for researchers to embrace in order to achieve this goal. In this study, we test one of the frameworks of technology outsourcing developed in the West, by changing the cultural context. Following Kodak's historic outsourcing decision, technology outsourcing has assumed significant importance among researchers and practitioners. Most of the research in relation to technology outsourcing has been conducted in the Western culture (including the USA and the UK), so our goal in this study is to extend the understanding of technology outsourcing research conducted in the West to another culture‐that of Korea, through replication. We focused on information systems (IS) outsourcing decision making as a case in point and found both similarities and dissimilarities in relation to the current understanding of the same. These similarities and differences in turn, reveal the distinctions between the Western and the Korean approaches toward achieving outsourcing success. The similarities are the partial preference for short‐term contracts and contracting out to external vendors. However, the two cultures differed in their decision making in the way they pursue contractual completeness, whether in‐house departments competes or not, design of contract to include partnership measures, criticality of tasks outsourced, familiarity with the outsourced task, postponing a few outsourcing decisions, and withholding a piece of a contract as bait. We also found “trust” and “task partitioning to gain advantage of varied expertise” to be important for achieving outsourcing success in the Korean organization. In addition, we observed that outsourcing success is achieved by maximizing reliability and relationship in the Korean context rather than by maximizing flexibility and control, as was observed in the Western context. We argue that this difference is a function of cultural diversity.

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