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Exploring Control Mechanisms in BPO (Business Process Outsourcing) Arrangement by Korean Conglomerate: Resource Dependency Perspective  

Kim, Gyeung-Min (Information Systems College of Business Administration Ewha Womans University)
Kim, Hyang-Bin (College of Business Administration Ewha Womans University)
Publication Information
Information Systems Review / v.9, no.3, 2007 , pp. 67-82 More about this Journal
Abstract
The myth about BPO is: since firms do not want to continue to control the business process, they outsourced it to the external provider. Therefore, there is no need for controlling the outsourced process. Based on resource dependency theory, this study explores control mechanism used in BPO context. The overall approach of this study is qualitative, inductive and exploratory. First, a generic framework on the control structure is derived from extant literature, which includes outcome/process control, IS and social control. This framework is applied to a Korean BPO case. This study has found that the hybrid control structure consisting of behavior, outcome and social control mechanisms are effective for BPO success. As outsourcing grows rapidly and IS functions become smaller, the business struggles to redefine its IS capability. This research proposes setting up proper control mechanism between user and BPO service provider as new IS capability that business should focus on; and provides guidelines for managers in development of new IS capability.
Keywords
Business Process Outsourcing(BPO); Control Mechanism; Resource Dependency; IS Capability; Control Structure; Exploratory Study;
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