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The Structure of Incentives in a Major Information Systems Outsourcing Contract: The Case of a North American Public Organization

Author

Listed:
  • Benoit Aubert
  • Michel Patry
  • Suzanne Rivard

Abstract

We use agency theory to shed light on a complex, multi-year outsourcing contract between an important public organization and three major information services outsourcers. The contractual arrangement shows that innovative contracts can be drawn that reduce the scope of supplier opportunism. Nous utilisons la théorie des mandats pour analyser un important et complexe contrat d'impartition. Ce contrat lie pour plusieurs années une importante entreprise publique et trois impartiteurs de services informatiques. L'étude de l'entente montre que certaines innovations contractuelles permettent de réduire l'opportunisme des fournisseurs.

Suggested Citation

  • Benoit Aubert & Michel Patry & Suzanne Rivard, 1995. "The Structure of Incentives in a Major Information Systems Outsourcing Contract: The Case of a North American Public Organization," CIRANO Working Papers 95s-14, CIRANO.
    • Handle: RePEc:cir:cirwor:95s-14
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    File URL: https://cirano.qc.ca/files/publications/95s-14.pdf
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    References listed on IDEAS

    as
    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
    3. David E. M. Sappington, 1991. "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 45-66, Spring.
    4. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    5. James Richardson, 1993. "Parallel sourcing and supplier performance in the Japanese automobile industry," Strategic Management Journal, Wiley Blackwell, vol. 14(5), pages 339-350, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Agency theory; Outsourcing; Théorie des mandats ; Impartition ; Sous-traitance;
    All these keywords.

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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