Abstract

Operational capabilities are essential for any business in today’s highly competitive environment. Whereas prior research on IT outsourcing vendors’ operational capabilities has examined internal mechanisms, little is known about the effect of clients. This study focuses on clients’ influence based on multiple cases drawn from the Japan-China IT outsourcing context. What is unique about this context is that the majority of Japanese clients are large mature IT vendors themselves. As a result, the clients play a “teacher” role for the vendors, which emphasize a strong client orientation. From a relationship learning perspective, this study shows that client characteristics, i.e., the purpose of outsourcing, level of project management maturity, and sustainability and length of projects, contribute to vendors’ development of operational capabilities.

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