How to NOT manage outsourced business services : developing sufficient condition hypotheses

Outsourcing has traditionally been studied from either a core-competence approach or a transaction economics perspective. These theories focus primarily on the decision-making process in outsourcing trajectories. What happens after the decision has been made has been left fairly unstudied. The transition phase and ongoing management phase of the outsourcing trajectory, however, are crucial to the success of the outsourced services. This paper specifically addresses the ongoing management phase of the outsourcing contract. The authors take the interaction approach as a theoretical lens, since this approach specifically focuses on the ongoing interactions between buyer and seller that take place after the contract has been signed. Using the perspective of outsourcing as a process in which services are continuously exchanged, we conduct two in-depth case studies aimed at developing theory on sufficient conditions for failure. We then test this theory in a set of nine case studies using Boolean Comparative Analysis. For both theory development and theory testing, we focus on service that are directed at the buying company, and that strongly affect the company's primary process. The insights obtained can be used as a starting point for redesigning companies' outsourcing management activities.