Vendor opportunism in IT outsourcing: a TCE and social capital perspective

Academic researchers have attributed significant attention to the drivers of opportunistic behavior, yet our understanding of how opportunistic behavior can be mitigated remains relatively fragmented. Our investigation will focus on the social context and more specifically on the role of social capital in the deterrence of opportunistic behavior. Based on two qualitative case studies in the financial sector, we will illustrate how the structural, cognitive, and relational dimensions of social capital can reduce internal and behavioral uncertainty between the outsourcing partners, thereby facilitating the mitigation of opportunistic behavior. In our study we combine the theory of transaction costs with social capital theory and demonstrate how they can usefully complement each other to enhance our understanding of mechanisms that can deter opportunistic behavior.