A., Maruping, L.M., and Venkatesh, V.
33, 2009, 617-641.
Agency theory has
played a significant role in identifying drivers of offshore information
system (IS) project success. Consequently, the role of relational
factors in driving project success has been overlooked in this
literature. In this paper, we integrate the social embeddedness
perspective and the culture literature by theorizing how and
why relational factors affect the success of offshore IS projects
that are strategic in nature, and by identifying organizational and
interpersonal cultural differences as critical success factors in this
context. Using data from a longitudinal field study of 155 offshore IS
projects managed by 22 project leaders, we found evidence of a
relationship between hypothesized relational factors and two measures of
offshore IS project success—namely, project cost overruns and client
satisfaction—over and above the effects of project characteristics and
agency factors. Specifically, we found that information exchange, joint
problem-solving, and trust reduce project cost overruns and improve
client satisfaction. We also found a relationship between cultural
differences at the organizational and team level, and offshore IS
project success. The model explained 40% and 41% of the variance in
project cost overruns and client satisfaction respectively for projects
with a client representative. For projects with no client
representative, the model explained 35% and 37% of the variance in
project cost overruns and client satisfaction respectively.
Collectively, the results have important theoretical and practical
implications for how client-vendor relationships should be managed when
partnering with offshore firms and designing offshore IS project teams.
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