The role of trust in outsourcing: More important than the contract?. (March 2017)

• Record Type: Journal Article
• Authors: Babin, Ron; Bates, Kim; Sohal, Sajeev
• Is Part Of: Journal of strategic contracting and negotiation. Volume 3:Number 1(2017)
• Page Start: 38
• Page End: 46
• Publication Date: 2017-03
• Subjects: Outsourcing -- trust -- relationship management -- trust repair -- governance; Negotiation in business -- Periodicals; Management contracts -- Periodicals; Commercial documents -- Periodicals; 658.72305
• DOI: 10.1177/2055563617717080
• Languages: English
• ISSNs: 2055-5636

Abstract

The aim of this essay is to argue the importance of inter-organizational trust in global outsourcing relationships and the need to proactively develop trust between the outsourcing buyer and provider. Outsourcing of information technology (IT) and related business processes is a well-established business tactic for reducing costs and gaining other benefits which include access to rare skills and faster delivery of services. IT outsourcing frequently occurs as a contract arrangement between two large, complex global organizations. Inter-organizational trust is one of the key elements for success in the outsourcing arrangement. Given the complexity of many outsourcing arrangements, the management of trust between the two parties can be critical to a successful long-term relationship for both parties. The ability of both parties to repair trust without resorting to legal action is important. This essay examines the literature on inter-organizational trust and trust relationships in outsourcing, then introduces preliminary field data from surveys and a case study, and suggests directions for further research. This issue deserves focused research as outsourcing continues to grow.