Understanding the Impact of Isomorphic Influences on Business Services Outsourcing Decisions: An Institutional Theory Approach: Research in Progress

Outsourcing decisions are complex, and a variety of factors must be considered. These include: (i) the drivers for outsourcing (reducing costs, accessing resources, focusing on core business); (ii) what the company will outsource (part ownership, management of IT); (iii) the procedures to be used (specific steps and tools needed to arrive at a decision); (iv) how the firm will outsource (implementation phase); and (v) the outsourcing outcomes (measured by realisation of expectations, satisfaction, and performance). Outsourcing drivers can be technical, strategic, or economic. Given the range and complexity of the factors involved, there is a risk that outsourcing decisions may not be aligned with organisational goals. It is therefore necessary for companies to recognise that the factors affecting outsourcing decisions may include social, cultural, structural, or political dimensions. Research indicates that hidden factors are frequently overlooked, undervalued, or misinterpreted. The goal of this study is to augment current understanding of the social, cultural, and structural factors influencing outsourcing decisions. Institutional isomorphism theory has been used to explore these other factors but has had limited application in the business services context. This research investigates the factors embodied in institutional isomorphic influences and how they affect business services outsourcing decisions. Our model is based on DiMaggio and Powell’s [14] causation model and on Dibbern et al.’s [13] adaptation of Simon’s [61] four stage model of decision-making. Our aim is to increase the explanatory power of isomorphic theory to interpret the business services outsourcing decisions of organisations.