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Managing differences, interaction, and partnership quality in global inter-firm relationships: An empirical analysis on offshore IT outsourcing

Yogi Yusuf Wibisono (Department of Industrial Engineering, Institut Teknologi Bandung, Fakultas Teknik Industri, Bandung, Indonesia)
Rajesri Govindaraju (Department of Industrial Engineering, Institut Teknologi Bandung, Fakultas Teknik Industri, Bandung, Indonesia)
Dradjad Irianto (Department of Industrial Engineering, Institut Teknologi Bandung, Fakultas Teknik Industri, Bandung, Indonesia)
Iman Sudirman (Department of Industrial Engineering, Institut Teknologi Bandung, Fakultas Teknik Industri, Bandung, Indonesia)

International Journal of Managing Projects in Business

ISSN: 1753-8378

Article publication date: 4 December 2018

Issue publication date: 8 October 2019

Abstract

Purpose

The purpose of this paper is to develop and to empirically test a model that explains how managing differences between an information technology (IT) provider and an overseas client influences partnership quality and ultimately affects the continuity of the relationship.

Design/methodology/approach

A field survey by distributing questionnaires to Indonesian IT providers was conducted over four months, yielding 78 completed responses. These empirical data were analyzed by the partial least squares–structural equation modeling technique to examine the measurement and structural models.

Findings

Managing differences, i.e. cultural, temporal and standards differences, has a positive impact on partnership quality through inter-firm interaction, i.e. information exchange, coordination and participation. Partnership quality, consisting of the dimensions of commitment, trust and integration, has a substantial positive impact on the continuity of the relationship.

Research limitations/implications

This study was limited by the use of a limited number of samples, reducing the precision of the results.

Practical implications

This study suggests that if the IT provider is able to manage the cultural, temporal and standards differences with the overseas client, it increases information exchange, coordination and participation between both parties, which are necessary for establishing a high-quality partnership.

Originality/value

This study is the first empirical examination of how the management of differences between an IT provider and an overseas client influences the continuity of their relationship through interaction and partnership quality.

Keywords

Acknowledgements

The authors wish to thank Direktorat Riset dan Pengabdian Masyarakat Direktorat Jenderal Penguatan Riset dan Pengembangan Kementerian Riset, Teknologi, dan Pendidikan Tinggi for funding this research.

Citation

Wibisono, Y.Y., Govindaraju, R., Irianto, D. and Sudirman, I. (2019), "Managing differences, interaction, and partnership quality in global inter-firm relationships: An empirical analysis on offshore IT outsourcing", International Journal of Managing Projects in Business, Vol. 12 No. 3, pp. 730-754. https://doi.org/10.1108/IJMPB-04-2018-0074

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited