How interpersonal conflicts influence IS-sourcing decisions

Frameworks on information systems-sourcing (IS-sourcing) decisions are frequently based on rational-choice theory, neglecting such non-quantifiable aspects as interpersonal conflicts. The purpose of this paper is to find out whether such interpersonal conflicts have a determining influence on an organization's IS-sourcing decision. An illustrative case-study strategy is applied. The following interpersonal conflicts had a determining influence on an organization's IS-sourcing decision: tensions between personnel in the IS department and those in the users' departments; lack of capabilities on a personal level; power in and between departments; and face-saving in the corporate group. Based on these empirical findings, a generic model is developed to illustrate how interpersonal conflicts enmesh with economic, business, and technical factors, and influence IS-sourcing decisions. The generic model enables researchers to study IS-sourcing decisions better. It enriches previous research on IS-sourcing decisions and alerts researchers that they need to cope with non-quantifiable aspects that can have an impact on IS-sourcing decisions. Once managers understand how interpersonal conflicts can influence an organization's IS-sourcing decision, they can assess their own organizations more accurately and estimate outcomes of particular IS-sourcing decisions more realistically. Thus, this paper enables organizations to make better IS-sourcing decisions, thereby – in the long run – helping them to use IS more effectively in their attempts to improve their business performances and competitive advantages. This paper extends previous research on IS-sourcing and fills a gap in traditional frameworks on IS-sourcing decisions. It illustrates how various types of interpersonal conflicts enmesh with economic, business, and technical factors, and influence IS-sourcing decisions.