Exploring and managing the "innovation through outsourcing" paradox

Benoit A. Aubert, Rajiv Kishore, Akie Iriyama

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

This paper identifies the conditions that create a paradox when firms try to obtain innovation using outsourcing contracts. While outsourcing can be a way to obtain new ideas from business partners, most of the guidelines related to good contract management seem to deter innovative behavior. Managers trying to innovate using outsourcing are therefore facing two opposing sets of constraints, and have to manage both at the same time. In this paper, the nature of the "innovation through outsourcing" paradox is discussed in terms of the tensions between a contractual view of outsourcing and an innovation view of outsourcing, along with their associated reinforcing cycles. The paper outlines four mechanisms that are essentially self-correcting cycles. They include: 1) dual formal reviews; 2) matching governance with level of innovation focus; 3) dynamic decision-making/"extreme contracting"; and 4) ambidextrous organization. These can enable managers to deal with this paradox and obtain innovation from outsourcing arrangements in a successful manner. Complexities involved in implementing these mechanisms are discussed and some avenues for future research are offered.

Original languageEnglish
Pages (from-to)255-269
Number of pages15
JournalJournal of Strategic Information Systems
Volume24
Issue number4
DOIs
Publication statusPublished - 2015 Dec 1

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Outsourcing
Innovation
Managers
Paradox
Decision making
Industry

Keywords

  • Innovation
  • Outsourcing
  • Paradox

ASJC Scopus subject areas

  • Management Information Systems
  • Information Systems
  • Information Systems and Management

Cite this

Exploring and managing the "innovation through outsourcing" paradox. / Aubert, Benoit A.; Kishore, Rajiv; Iriyama, Akie.

In: Journal of Strategic Information Systems, Vol. 24, No. 4, 01.12.2015, p. 255-269.

Research output: Contribution to journalArticle

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