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Theoretical Foundations
Abstract
IT outsourcing as a theoretical as well as practical discipline is based on several other concepts and disciplines, as well as the relations between them – such as international business, marketing, psychology, technology management, strategic management, project management, knowledge management, finance, economy, organizations, traditional management, political science, and the behavioral sciences. Even though IT outsourcing is a practical issue in the end, organizational and management theories can be applied to enlighten the emerging business practices of outsourcing. In this chapter, eleven organizational and management theories are presented according to attributes like outsourcing focus, aim, the unit of analysis, outsourcing philosophy, and critical success factors. A comparison of theories is presented in Table 1 and a comprehensive literature review of IT outsourcing based research is presented at the end of the chapter. The primary purpose of the chapter is to strengthen the theoretical understanding of IT outsourcing. This approach is adapted from Earl (2001). No claims are made that any one theory outperforms others. Each represents a particular theoretical orientation and a different form of organizational intervention of IT outsourcing. The theories are not mutually exclusive, and two or more of them can be applied to the same outsourcing arrangement. Application of different theories in a practical decision-making situation can lead to different outcomes.
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