The Impact of Culture on Control in IS Offshoring Projects

I Abstract Purpose – The purpose of this study is to better understand how national culture influences the choice of control modes and mechanisms in captive offshoring and offshore outsourcing projects. Design / methodology / approach – Control theory with prior literature on ISO and national culture formed the theoretical foundations. Six national culture dimensions (i.e., power distance, individualism vs. collectivism, uncertainty avoidance, activity vs. passivity, universalism vs. particularism, and monochronic vs. polychronic time perception) and four modes of control (i.e., outcome control, behavior control, clan control, and self-control) were consulted to examine the relationship between national culture and the choice of controls. The research approach was a surveybased field study using a client-supplier matched pair as the unit of analysis. This resulted in a sample size of 37 unique matched pairs. Findings – This study contributes to the ISO and control literature by offering empirical evidence that both the client and supplier’s national culture affect the client’s choice of controls in IS offshoring projects. The researcher found that the supplier’s power distance, uncertainty avoidance, and time perception affect the choice of controls. Further, it was found that the client’s collectivism, uncertainty avoidance, activity, universalism, and time perception influence the choice of controls, too. Practical implications – This study revealed the client and the supplier’s cultural characteristics that play an important role in the selection of different control mechanisms. This knowledge enables clients and suppliers to more effectively apply control mechanisms to different cultural settings and, thus, create an environment conducive to project success. Originality / value – This is the first quantitative study on the impact of culture on the choice of controls in an ISO context. By using the client-supplier dyad as the unit of analysis, the direct control relationship within a matched pair could be examined. Further, surveying both the client and supplier representatives on their cultural background resulted in a more comprehensive understanding of how culture influences the choice of controls. Finally, considering ISO in general rather than concentrating on one specific ISO variation provided interesting insight into different ISO projects and models. The Impact of Culture on Control in IS Offshoring Projects Table of