Contractual and Relational Governance as Substitutes and Complements – Explaining the Development of Different Relationships

Thomas A. Fischer (), Thomas L. Huber () and Jens Dibbern ()
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Thomas A. Fischer: University of Bern
Thomas L. Huber: University of Bern
Jens Dibbern: University of Bern

A chapter in Theory-Guided Modeling and Empiricism in Information Systems Research, 2011, pp 65-83 from Springer

Abstract: Abstract For a long time research on the management of IS outsourcing projects viewed relational and contractual governance as substitutes. However, subsequent studies provided empirical evidence for the complementary view. Recently, some authors supported the notion that relational and contractual governance mechanisms can simultaneously be complements and substitutes. Given these inconsistencies the question arises how contractual and relational governance become substitutes or complements. We investigate whether the relationship between governance mechanisms is the outcome of distinctprocesses of interaction between contractual and relational governance. For that purpose, we conduct an exploratory multiple-case study of five IS outsourcing projects at a leading global bank. We identify three archetypical processes illustrating how the interaction between relational and contractual governance can result in a complementary relationship. In addition, we discover one process explaining their substitution. The results of our study propose a shift in perspective. While former studies focused on explaining whether contractual and relational governance are complements or substitutes, we answer the question how and why they become complements and substitutes. Based on our findings, we give implications for further research.

Keywords: Information System; Governance Mechanism; Service Level Agreement; Relational Norm; Complementary Relationship (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-7908-2781-1_4

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DOI: 10.1007/978-3-7908-2781-1_4

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