Which Control Strategies and Configurations Affect Performance? Evidence from Large Scale Outsourcing Arrangements

Posted: 16 Aug 2011 Last revised: 20 Jul 2014

See all articles by Pankaj Nagpal

Pankaj Nagpal

Case Western Reserve University; Central Connecticut State University

Kalle J. Lyytinen

Case Western Reserve University - Weatherhead School of Management

Richard J. Boland

Case Western Reserve University - Department of Information Systems

Date Written: December 2011

Abstract

We study the effects of management controls and organizational configurations on the performance of large and complex outsourcing initiatives which span multiple years, cost millions of dollars and involve multiple functions. Using survey data from Chief Information Officers we seek to validate several hypotheses concerning the positive effects of controls on outsourcing configurations and their joint effects on outsourcing performance. We observe that targeted behavior controls, and clan controls are positively related to improved performance after controlling for the effects of conventional time and cost controls. In addition, we show that the increased use of selected behavior controls affects the flexibility of outsourcing arrangements and thus improves outsourcing performance. Another configurational feature- multi-sourcing- directly affects performance. The paper adds to our overall understanding of the influence of informal management controls on outsourcing configurability and their ultimate effect on outsourcing performance. These findings apply to complex control situations including large scale outsourcing arrangements and multi-party new product development.

Keywords: Clan Controls, Management Controls, Modularity, Outsourcing, Configurations, Firm Level Performance

Suggested Citation

Nagpal, Pankaj and Lyytinen, Kalle J. and Boland, Richard J., Which Control Strategies and Configurations Affect Performance? Evidence from Large Scale Outsourcing Arrangements (December 2011). AAA 2012 Management Accounting Section (MAS) Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1910396 or http://dx.doi.org/10.2139/ssrn.1910396

Pankaj Nagpal (Contact Author)

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106-7235
United States

Central Connecticut State University ( email )

1615 Stanley Street
New Britian, CT 06050
United States

Kalle J. Lyytinen

Case Western Reserve University - Weatherhead School of Management ( email )

10900 Euclid Ave.
Cleveland, OH 44106-7235
United States

Richard J. Boland

Case Western Reserve University - Department of Information Systems ( email )

United States

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