Trust and formal controls are critical in contemporary information systems outsourcing arrangements. Trust has been recognized as the relationship facilitator, while formal controls have been treated as the governance mechanism. Achieving a balance between trust and formal controls has received much attention in the literature as it leads to better management of inter-organisational relationships and performance results. Although existing research on the balance offers interesting insights, it is largely descriptive and does not establish a sound conceptual base. In contrast, the current studies that investigate the interaction of trust and formal controls have been based on contradictory conceptualisations and conflicting research outcomes, leading to controversial and exhausting debate about trust and formal controls being complements and/or substitutes. In this study, we investigate the dynamics of trust-controls nexus in IS outsourcing arrangements and build a conceptual framework that captures various interplays between trust and formal controls. We argue that different types of balance (antithetical, orthogonal and synergistic) and outsourcing outcomes can mutually influence each other. Based on our framework, we explore the synergistic balance in twocase studies and reveal the existence of dynamic patterns of interaction between trust-controls nexus and outcomes, and the changes in the achieved balance. The study provides a new way to explore the balance as the outcome of dynamic interactions between trust and formal controls and its link to the outcomes in IS outsourcing.
Bekmamedova, Nargiza and Shanks, Graeme, "Exploring The Balance Between Trust And Formal Controls In Information Systems Outsourcing Relationships" (2012). PACIS 2012 Proceedings. 86.