Managing change in services outsourcing: the influence of power and governance on implementation success

Morgan, Royston E (2017) Managing change in services outsourcing: the influence of power and governance on implementation success. Doctoral thesis (PhD), University of Sussex.

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Abstract

This research evaluates the change observed during the implementation of an outsourced application development within a large defence organisation in Europe. Whereas most extant research focuses on the firm level or dyadic relations this research aims to uncover how different outcomes can be explained by attending to the micro-processes and specific mechanisms of work between purposive actors as they create the new service.
The research was a longitudinal, six-year in-depth participant observation focused on the implementation of an HRM application carried out by six case organisations within a consortium formed to implement the service. The results of the field study are based on a grounded analysis from semi-structured interviews, focus groups, documents, and over 5,000 email communications involving a total of 62 stakeholders. A conceptual framework of neo-institutional theory, practice and power was used to analyse the process of change as the consortium worked together to deliver the outsourcing.
The findings showed that political goals and behaviour influenced and shaped the outsourcing implementation and exposed the systemic nature of conflict within a constrained project context. The high conflict observed was shown to negatively influence success and supports the notion that strong contracting is only effective in stable contexts. It was also shown that tight control can negatively impact collaboration, by reducing adaptability, forcing vendors to take an inflexible posture. This type of behaviour was observed to increase power and conflict within the project and buyers reacted by increasing control and applying sanctions. This resulting in increased conflict and was a form of feedback loop. The findings also showed control in general is ineffective and can be overwhelmed in situations where there is high demand uncertainty. These observations add to the outsourcing and power/political literature by showing the central role of power and conflict and suggests the final configuration of an outsourcing is a negotiated order that may be at variance to the original objectives.
Implications for practice:
From a practical perspective, managers should think carefully before rushing into tight preventative contracts and consider the complexity of the demanded service and degree of completeness in their requirements. High uncertainty can lead to outsourcing failure, conflict within the implementation, and unmet expectations, unless specific mechanisms are in place to mitigate this. Furthermore, embedding new work processes and procedures to manage the service within the buying organisation is fundamental to how outsourcing actually works. Buyers and suppliers must pay attention to the design and implementation of processes and routines to manage effective delivery of the outsourced service.

Item Type: Thesis (Doctoral)
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HD Industries. Land use. Labour > HD2350.8 Large industry. Factory system. Big business > HD2365 Contracting. Letting of contracts
H Social Sciences > HD Industries. Land use. Labour > HD2350.8 Large industry. Factory system. Big business > HD2709 Corporations Including international business enterprises, diversification, industrial concentration, public utilities
Depositing User: Library Cataloguing
Date Deposited: 30 May 2017 12:39
Last Modified: 30 May 2017 12:40
URI: http://sro.sussex.ac.uk/id/eprint/68270

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