Trust and Social Capital: Revisiting an Offshoring Failure Story of a Small German Software Company

While work organization and social capital are known to be important factors for offshoring success, there is little empirical evidence on how these aspects evolve in the course of offshoring projects. In the literature, trust has been discussed as a personal disposition to abstain from control in a given situation, and was found to remain surprisingly stable in some cases. By analyzing the relation between control and trust in the course of a failed offshoring project, we want to add to the discussion on social capital as a factor for successful offshoring. The results of our long-term ethnographic study are somewhat paradox: in our case, ongoing conflicts motivated attempts to strengthen control, although personal trust and social capital remained strong. Despite the fact that the confidence of the partners in their offshoring project was weakened over time, the trust among the partners prevailed. However, social capital was not only unable to save the offshoring project—it also seemed to hinder the conflict resolution in some regards. Therefore, we argue that while social capital is an important factor, it should not be regarded as a context-free asset, but rather (in Bourdieu s perspective) as a risky investment.