Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
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The Effects of Knowledge Complementarities and Trust on IT Outsourcing Effectiveness

지식 상호보완성과 신뢰가 IT 아웃소싱 효과에 미치는 영향에 관한 연구

  • Published : 2007.09.30
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Abstract

Increasingly the information technology (IT) outsourcing phenomenon has been a subject of much academic research. Scholars have argued that knowledge complementarities playa crucial role in forming successful IT outsourcing relationships. However, notwithstanding the fast growth of IT outsourcing, prior studies on IT outsourcing have not included knowledge complementarities in their research design as a determining factor for IT outsourcing effectiveness. Further, the understanding of knowledge complementarities itself remains ambiguous. In this study, the concept of knowledge complementarities is explored in the IT outsourcing context at the firm level. Specifically, it addresses the following questions: what is knowledge complementarities? How does it affect IT outsourcing effectiveness? Is the relationship between knowledge complementarities and IT outsourcing effectiveness influenced by organizational trust between the client and the vendor? Grounded in the relevant theories to knowledge management and IT outsourcing, we develop a research model in which both the main effects of knowledge complementarities and organizational trust and the moderating effect of organizational trust on the relationships between knowledge complementarities and IT outsourcing effectiveness are tested. Within this research model, we develop a second order construct of knowledge complementarities, consisting of complementary business knowledge and complementary IT knowledge as the first order constructs. We have used data from a field study of 103 firms in Korea to test the proposed model. Controlling the effects of conflict resolution efforts, our empirical analysis found significant main effects of knowledge complementarities and organizational trust on IT outsourcing effectiveness. The results suggest that knowledge complementarities between the client and vendor positively contribute to IT outsourcing effectiveness. Specifically, the client needs to have enough IT knowledge to assess the quality of IT outsourcing services provided by the vendor. Meanwhile, the vendor should understand the client's business well enough to provide IT services, Contrary to our expectations, the moderating effect of trust on the relationship between knowledge complementarities and IT outsourcing effectiveness was not supported in this study. The results also show that organizational trust between client and vendor significantly influences IT outsourcing effectiveness. As for contributions of this study, we have not only clarified the concept of knowledge complementarities, but also developed an instrument to measure the concept and empirically validated it. Further, we have tested the idea that knowledge complementarities and trust directly influence IT outsourcing effectiveness and trust moderates the relationship between knowledge complementarities and IT outsourcing effectiveness. Out results prescribe the knowledge complementarities of client and vendor as a useful path to IT outsourcing effectiveness. These findings have important theoretical and practical implications, which are discussed in the paper.

Keywords

References

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