Performance management: outsourcing and behavioural dynamics

Empirical research captured information from a multinational EU leader in the financial services sector during the early stage of outsourcing IT services and an action inquiry methodology surfaced the embedded web of meanings relating to changes and effects on working relationships. The results identified the importance of addressing strategic performance issues and inter/intra relationships between parent company team members and their outsource counterparts. Conclusions indicate that behavioural issues such as psychological contracts within inter/intra work groups, power and trust are highly significant managerial performance issues when perceiving the success or failure of an outsourcing strategy, such that they potentially outweigh economic factors and corporate performance imperatives specified in the service level agreement.