The Journal for Information Professionals
Asia Pacific Journal of Information Systems (APJIS), a Scopus and ABDC indexed journal, is a
flagship journal of the information systems (IS) field in the Asia Pacific region.
ISSN 2288-5404 (Print) / ISSN 2288-6818 (Online)
Editor : Seung Hyun Kim
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Current Issue
| Date | March 2025 |
|---|---|
| Vol. No. | Vol. 35 No. 1 |
| DOI | https://doi.org/10.14329/apjis.2025.35.1.21 |
| Page | 21~48 |
| Title | IT Outsourcing Governance: Institution as Safeguard or Institution as Scaffold |
| Author | Jae-Nam Lee |
| Keyword | IT Outsourcing, Governance, Chaebol, Institution, Safeguard, Scaffold |
| Abstract | This study explores implications of different theoretical perspectives for studies of governance contexts in IT outsourcing. Institutional economics views institutions as exchange safeguards. Efficacy of institution-as-safeguard hinges on institutions’ regulative structures to enforce norms. In privately-ordered exchanges, their advantage lies in their capacity for exercising informal sanctions such as reputation- or status-modifying articulations or ostracism and/or authoritative sanctions via control of compensation or career advancement. Thus, institution- as-safeguard implicitly privileges institutions’ regulative structures over its cognitive structures. Do institutions offer governance advantages in the absence of strong regulative structures? If so, how does this occur? These are the questions addressed in this study. The alternative to the institution-as-safeguard paradigm developed to answer the questions is an institution-as-scaffold model, focusing on institutions’ cognitive/normative structures. We examine questions posed in the context of IT outsourcing by 276 Korean firms, contrasting Chaebol (institutionally-embedded) with non-Chaebol exchanges. Findings show that Chaebol exchanges manifested more relational contracting and a higher degree of outsourcing than did non-Chaebol exchanges. This speaks to the salience of institutional embeddedness, despite the institutions hobbled regulative structures. Rather than complementing institutional embeddedness, as the institution-as-safeguard paradigm would expect, we found efficacy of institutional embeddedness diminished with increasing relational contracting. Findings thus supported the institution-as-scaffold perspective advanced. |
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