Examining client perceptions of partnership quality and the relationships between its dimensions in an IT outsourcing relationship

Abstract

This paper reports on an empirical study of the multidimensionality of partnership quality and the relationships between these dimensions. A two-phase survey was conducted for a range of organisations from different industry sectors to collect empirical data to test the validity and reliability of the measurement model for the multidimensionality of partnership quality. The measurement model for partnership quality was confirmed by the results of the data analyses. This research also aimed to identify the significant relationships between these dimensions using a second generation multivariate analysis technique—partial least squares(PLS). The findings from results of the data analyses show that inter-organisational trust, shared business understanding and to a lesser extent, functional and dysfunctional conflict between the client organisation and the outsourcing vendor in an IT outsourcing relationship are the key determinants of partnership quality. The key outcome of high partnership quality between the client organisation and the outsourcing vendor in an IT outsourcing relationship is mutual beneficial sharing of risks and benefits. Commitment is confirmed as a multidimensional construct of behaviour and temporal/continuance commitment but is not is influenced by the other dimensions of partnership quality. Trust and shared business understanding are the key drivers in the IT outsourcing relationship ensuring that the sharing of risks and benefits are realised and conflict is minimised leading to a high quality and ultimately successful partnership between the client organisation and the outsourcing vendor. Furthermore behavioural commitment to the contractual obligations of an IT outsourcing relationship sustains an ongoing temporal commitment to the partnership between the client organisation and the outsourcing vendor.