A Knowledge-Based Perspective on Contract Choice in Application Outsourcing

Krancher, Oliver; Stürmer, Matthias (2018). A Knowledge-Based Perspective on Contract Choice in Application Outsourcing. In: Multikonferenz Wirtschaftsinformatik 2018. Lüneburg, Germany. 06.-09.03.2018.

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A key governance decision in application outsourcing projects is the choice between fixed-price and time-and-materials contracts. While existing research draws on economic theories to explain contract choice, knowledge-based perspectives on contract choice remain underdeveloped. In this paper, we formulate and empirically test such a knowledge-based perspective. We argue that different contract types (fixed-price versus time-and-materials) assign the primary responsibility for coordination to different parties (vendor versus client) and that the ability of each party to coordinate the work depends on task characteristics. Specifically, vendors are most able to coordinate work when knowledge specificity is low and when task scope is high. Data on 1035 contract choices at 223 clients support these ideas. Fixed-price contracts are more frequent under low knowledge specificity and under high task scope. Our key contribution lies in formulating and empirically substantiating a knowledge-based perspective on contract choice.

Item Type:

Conference or Workshop Item (Paper)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Information Systems > Information Engineering
03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Information Systems
03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Information Systems > Information Management

UniBE Contributor:

Krancher, Oliver and Stürmer, Matthias

Subjects:

000 Computer science, knowledge & systems
600 Technology > 650 Management & public relations
300 Social sciences, sociology & anthropology > 330 Economics

Projects:

[229] IT Outsourcing Governance

Language:

English

Submitter:

Oliver Krancher

Date Deposited:

03 Apr 2018 14:24

Last Modified:

01 Nov 2019 15:22

Uncontrolled Keywords:

contract type, contract choice, knowledge-based perspective, knowledge-based view, knowledge specificity, coordination

BORIS DOI:

10.7892/boris.108218

URI:

https://boris.unibe.ch/id/eprint/108218

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