Technological Innovation in Software Outsourcing Alliance Based on Trust Perspective

Abstract

From social exchange theory perspective, inter-organizational trust can be considered as a resource. It can reduce the potential speculation due to the uncertainty and dependency in inter-organizational exchange. We believe that, in term of the trust itself, there is also a paradox of trust. Namely, the original intention of building confidence among the organizations is to reduce the opportunity risks from the asset specificity. But Technological Innovation in Software outsourcing Alliance are often in a dilemma: to win the trust needs specific investment as a commitment. Once invested, enterprise would face the risk of opportunism because of lack of legal constraints and security for trust.