Abstract
This paper explores how and why contractual and relational governance evolve over time in information systems (IS) outsourcing projects. Governance is broken down into its foundation and action dimension resulting in four governance parameters: trust /norms and informal control representing relational governance; contract and formal control reflecting contractual governance. Drawing on the lenses of punctuated equilibrium and biological interaction, we examine both incremental and disruptive change along our four governance parameters. The findings from four longitudinal IS outsourcing projects suggest that incremental changes are driven by interactions between governance parameters. We found three basic patterns of interaction between governance parameters (mutualism, commensalism, competition) that explain incremental changes. In contrast, disruptive governance changes during revolutions are driven by stark contextual changes. However, interactions during equilibriums may lead to self-perpetuating dynamics that may detract governance from basic outsourcing objectives. Revolutions may break these self-perpetuating dynamics and redirect governance to basic objectives.
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