Understanding Outsourcing Commitment - An Integrated Model Combining The Resoruce-Based View And Knowledge Management

The understanding on how a service provider’s (SP) process capabilities, in terms of aligning and adapting resources to deliver value to its service recipient (SR) in business process outsourcing (BPO), affect its commitment is limited. To address this, building on a strategic perspective and related theories such as the resource-based view and knowledge management, we develop a theoretical model and test it empirically. Specifically, we posit that a SP’s process capabilities, in terms of process alignment, offering flexibility, and partnering flexibility, positively affect its SR’s commitment and the above relationships is negatively moderated by the SR’s behavior control. Besides, we also examine the influence of interaction effect between antecedents of process capabilities on commitment, such as how does process alignment interact with its partnering flexibility and offering flexibility to affect commitment. Finally, we assess whether process capabilities are influenced by the SR’s absorptive capacity and the SP’s task-knowledge coordination. We test our model using survey data collected from 183 firms, supporting most proposed hypotheses. We discuss the theoretical and practical implications of how to increase the value offered to a SR by levering resources, in terms of process capabilities and knowledge management.