IT Outsourcing Governance: Illuminating on the Interplay Between Contractual and Relational Governance

The aim of this paper is to provide insights into the interplay between contractual and relational governance in IT outsourcing arrangements. The study will demonstrate the value of the Foucauldian notion of “governmentality” into the examination of IT outsourcing relationships. Using this theoretical lens our study will attempt to show how the contract and the apparatus of governance it entails create visibility and transparency that not only render the outsourcing relationship amenable to government and intervention, but also facilitate trust and collaboration among the outsourcing partners. More specifically, our study will illustrate the role of the contract in generating not only formal control directed to monitoring behaviors and performance, but also a form of social control that manifests trust and collaboration.