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The impact of cultural differences in offshore outsourcing—Case study results from German–Indian application development projects

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Listed:
  • Jessica K. Winkler

    (University of Mannheim)

  • Jens Dibbern

    (University of Mannheim)

  • Armin Heinzl

    (University of Mannheim)

Abstract

Offshore outsourcing to vendors in foreign countries causes unique challenges which need to be understood and managed effectively. This paper explores cultural differences in IS offshoring arrangements involving German client organizations that outsource application development activities to Indian vendors. For this purpose, a research framework is developed based on both theoretical considerations and specific empirical observations from multiple case studies. The goal is to (1) explore the nature of cultural differences in offshore outsourcing arrangements in depth and to (2) analyze the relationship between those cultural differences and offshore outsourcing success. Based on the case findings, implications and practices for the management of offshore development projects are outlined. The results indicate that cultural differences in terms of power distance, IS designer values, and an active versus passive working attitude critically affect several dimensions of relationship quality, thereby influencing offshore outsourcing success. A clear definition of roles and mechanisms, strong leadership, and an active management of culture by adapting to either the client’s or the vendor’s national culture appeared to be effective ways to manage cultural differences.

Suggested Citation

  • Jessica K. Winkler & Jens Dibbern & Armin Heinzl, 2008. "The impact of cultural differences in offshore outsourcing—Case study results from German–Indian application development projects," Information Systems Frontiers, Springer, vol. 10(2), pages 243-258, April.
    • Handle: RePEc:spr:infosf:v:10:y:2008:i:2:d:10.1007_s10796-008-9068-5
    DOI: 10.1007/s10796-008-9068-5
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    References listed on IDEAS

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    1. Anandasivam Gopal & Konduru Sivaramakrishnan & M. S. Krishnan & Tridas Mukhopadhyay, 2003. "Contracts in Offshore Software Development: An Empirical Analysis," Management Science, INFORMS, vol. 49(12), pages 1671-1683, December.
    2. Oded Shenkar, 2001. "Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 519-535, September.
    3. Rajiv Sabherwal & Vivek Choudhury, 2006. "Governance of Remotely Outsourced Software Development: A Comparison of Client and Vendor Perspectives," Springer Books, in: Rudy Hirschheim & Armin Heinzl & Jens Dibbern (ed.), Information Systems Outsourcing, edition 2, pages 187-222, Springer.
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    Cited by:

    1. Bobby Swar & Junghoon Moon & Junyoung Oh & Cheul Rhee, 2012. "Determinants of relationship quality for IS/IT outsourcing success in public sector," Information Systems Frontiers, Springer, vol. 14(2), pages 457-475, April.
    2. Lacity, Mary & Willcocks, Leslie P., 2017. "Conflict resolution in business services outsourcing relationships," LSE Research Online Documents on Economics 69810, London School of Economics and Political Science, LSE Library.
    3. I. Reay & P. Beatty & S. Dick & J. Miller, 2013. "Privacy policies and national culture on the internet," Information Systems Frontiers, Springer, vol. 15(2), pages 279-292, April.
    4. Lu, Lu & Gregory, Gary & Ngo, Liem, 2020. "Service offshoring fit from consumers’ perspective," Australasian marketing journal, Elsevier, vol. 28(2), pages 100-109.
    5. Chulhwan Chris Bang, 2015. "Information systems frontiers: Keyword analysis and classification," Information Systems Frontiers, Springer, vol. 17(1), pages 217-237, February.
    6. Dakshitha N. Jinasena & Konstantina Spanaki & Thanos Papadopoulos & Maria E. Balta, 2023. "Success and Failure Retrospectives of FinTech Projects: A Case Study Approach," Information Systems Frontiers, Springer, vol. 25(1), pages 259-274, February.

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