Relational dynamics in information technology outsourcing: An integrative review and future research directions

Abstract

This paper reviews the literature on relational dynamics in information technology outsourcing (ITO) relationships, a type of interorganizational relationship (IOR) between client and vendor firms that can vary considerably in complexity. While relational dynamics are understood to reflect changes in an IOR ex-post contract which can substantially influence relationship performance and development, prior IOR research is limited in its conceptualization. The extensive ITO literature offers fertile ground for exploring this limitation but has advanced different conceptualizations and is fragmented in empirical findings, which warrants a systematic assessment. We conduct an integrative review of 127 peer-reviewed empirical studies to enhance our understanding of the constituents of relational dynamics. The findings reveal that relational dynamics involve the occurrence and management of tensions within and across four relationship development stages (transactional, strategic, transformational, and termination). For each stage and between stages, we identify the main tension, the firms’ strategies to manage the tension, and the outcomes. Based on these findings, we develop an integrative framework that offers a comprehensive and multifaceted conceptualization of relational dynamics, revealing that as ITO arrangements progress (or regress), partner firms are confronted with structural and transitional tensions inherent in relationship stability and instability. Based on this framework, we offer future directions for developing a more comprehensive understanding of relational dynamics in ITO and, more broadly, IORs.