Relational governance in outsourcing partnerships

Abstract

Purpose The paper aims to capture the nuances of two client–supplier relationships to offer new insights on the influences of transactional, knowledge and social elements in outsourcing partnerships. Design/methodology/approach The study has used descriptive case studies with narrative storylines. Interviews were conducted with three relationship managers (boundary gatekeepers) to understand preferred governance practices between clients and suppliers in diverse economic markets. Findings Experiences of three real-life cases engaged in offshore outsourcing have helped to identify the market, operational knowledge and social influences in a relational exchange. Findings reveal that offshore partnerships are first constituted with service-level agreements, which set control measures and layout business expectations from both partners. Boundary gatekeepers bring further accountability across firms by designing social networks for capturing and sharing of knowledge, thereby reducing each partner’s perception of risk. As firms evaluate transactional, knowledge and social elements for building a futuristic relational exchange, more disaggregated and dispersed enterprises evolve as new opportunities are explored in foreign markets. Research limitations/implications The retrospective nature of the client–supplier partnership is a limitation in this research study. However, retrospection adds to experience, and to practice perspectives made in hindsight, and therefore has a positive influence in this study. Originality/value This paper shares real-world experiences that can be used by scholars and practitioners to better understand how relational governance practices operate in a global socio-economic setting.