IT Outsourcing: Culture/Cohesion’s Impact on Vendor Performance

Our investigation examines the increasingly important relational success dimension at the micro level of the outsourced employee. We study the impact of client and vendor organizational culture and group cohesion on the performance of vendor employees working in collocated IT teams. Surveys were distributed to IT vendor employees, focusing on employees of offshore IT service providers. The respondents were employed by vendor companies and worked at client locations. We found that vendor organizational culture has a significant and positive impact on vendor employee performance located at client sites while client organizational culture does not. We also found, that group cohesion at the client site positively impacts vendor employee performance, while group cohesion at the vendor company does not. This research contributes to the literature by providing empirical evidence of the differential impact of multiple cultural and team influences on the quality of work of collocated vendor employees. Keywords—Organizational Culture, Group Cohesion, Vendor Performance, Outsourcing/ Offshoring