Intra- and inter-organizational controls in outsourcing: Controlees’ perspectives

Control is central to effective IS development. In the past, when the projects were carried out within the organization, controls were primarily intra-organizational. With outsourcing, controls are both intra-organizational and inter-organizational, since the controlee (vendor project team) is controlled by controllers from their own (vendor managers) as well as external organizations (client managers). The current research on outsourced projects focuses only on the inter-organizational aspect of controls. We argue that when internal as well as external controllers with potentially conflicting goals try to implement controls to fulfil their own needs, it creates challenges for controlees. Based on a field study of teams that deliver IT services globally, this paper examines both intra- and inter-organizational controls operating in outsourcing contexts, and brings to light the specific challenges created by their simultaneous presence. In doing this, unlike the previous approaches that give prominence to the controllers’ perspectives, this paper focuses on controlees’ perspectives and resolution tactics they adopt. The results are summarized in an empirical model for intra- and inter-organizational controls in practice.