Integrating Competencies in IT Outsourcing Projects – a study of knowledge boundaries and their reproduction

Philip Runsten & Andreas WerrStockholm School of Economics

Background and Purpose

Organizations increasingly engage in (temporary) interorganizational collaboration to gain and access knowledge

Current models of knowledge integration emphasize the importance of upfront investments in e.g. routines, directions or relationships

Current models of interorganizational collaboration have neglected the individual/group level where knowledge is enacted

Purpose: To discuss interorganizational knowledge integration as the joint work of individuals residing in different organizations in the pursuit of a common and temporary work task

Framework

A B

Role frame

Knowledge integration

Behavioural world

Appreciative system, media and language

Social action theory

Role frame Appreciative system, media and language

Social action theory

Appreciative systems a. knowledge boundaries

Differences in language and appreciative systems make it difficult for individuals with different competencies to interact and communicate

Differences in language and appreciative systems may be found both along functional boundaries and along organizational boundaries

Role frames and knowledge seeking

Actors’ understanding of their role and the way in which they bound their institutional setting determines what competencies they see as possible to seek and contribute to

Narrow, isolated role frames, establishing clear boundaries between actors and their responsibilities, are expected to impede the exploitation of complementary competencies

Overlapping role frames, binding actors together in a joint problem solving task are expected to support the exploitation of complementary competencies

Social action theory and knowledge integration

Actors’ social action theories collectively create a behavioural world conditioning the prerequisites for bridging differences in language and appreciative systems and role frames

Behavioural worlds in interorganizational, expertise-based relationships are expected to be characterized by model I behaviour and low psychological safety by default

Empirical illustration - IT outsourcing

Focus on the transition phase comprises the move of applications and responsibilities to

the outsourcing provider Involves the design of new procedures and routinesHas the potential for innovation and learning Involves a large number of actors from several different

organizations

A process with escalating problemsTechnical problemsFrustrated usersDissatisfied buyer

Actors and organizations

IT ArkitektFredrik

IT ArkitektFredrik

Project mgr. Calle

Sales rep. Bertil

Projekt-medarbetare

Projekt-member

Project-member

SubcontractorSubcontractorSubcontractor

IT managerAdam

Application ownerErik

IT expertFredrik

Tuna IT Cherry Peach IT org

IT mgr. Peach

UserUser User

Project mgr.David

Appreciative systems and understanding

Different actors approach the situation from different appreciative systems A technical system (Tuna project mgr, Tuna IT experts, Peach IT

experts A user oriented system (Cherry IT a. project mgr, user reprentatives,

Tuna IT sales rep.)

Actors sharing appreciative systems interact well “They [Tuna ITs personnel] are good IT-specialists. There are absolutely

no problems, no problems whatsoever. They are very good guys. (Peach IT specialist)”

Interaction across appreciative systems is more problematic “Although we discussed this up to the highest management level, the

project manager [Calle] still doesn’t get it. The processes for the daily work, management, maintenance of the tasks agreed upon in the contract, which we pay for, are not understood by the project. That is bad…” (Cherry project manager)

Separating role frames and passivization

A shared framing of the situation as ”purchase of a business function” creates narrow roles and restricts integrationThe provider doesn’t want to involve the customer as ”he

has bought a function”The customer wants to get involved, but feels he cannot

demand it – as he has ”bought a function”The customer’s IT specialists have ideas, but don’t want to

intrude – after all its the provider of the functions who needs to make this work

The salesrep has sold a function, now it up to the technical people to make it work

Social action theories and the lack of integration

Striving for ”good collaboration” counteracts a deeper investigation into each others’ understandings

”Pragmatic” solutions are sought…Which implies avoiding conflict and blame and focusing on

action rather than reflection

…In order to save actors’ face and avoid negative feelings

The different actors’ assumptions about the project and each other were never surfaced and tested

Findings

The integration of competencies is challenged by differences in language and appreciative systems along functional rather than organizational boundaries

Specialised and isolated role frames inherent in the buyer-supplier relationship underlying the concept of outsourcing separate and passivize actors, and thus inhibit the active engagement in knowledge integration

Behavioural worlds, following from the way the situation is perceived and roles are set, show “model I” characteristics which impede open and constructive dialogue and negotiation involved in competence integration.

Conclusions

Knowledge integration is hampered not only by differences of understanding but also by how people perceive the situation and the social context

Institutionalized ideas about market relationships create conditions inhibiting knowledge integration

In order to overcome these conditions alternative understandings of the situation and the social context need to be actively created

Findings

Outsourcing situationen domineras av osäkerhet, komplexitet – både i uppgiften och socialt

En sådan situation innehåller många moment och frågeställningar som skulle tjäna på ett gemensamt reflektivt agerande

Istället kommer den sociala ”osäkerheten” att leda till att en ”experthållning” och ett ”model 1-agerande” kommer att dominera – vilket motverkar reflektiva processer och lärande Svårigheter att mötas över appreciative systems Passiviserande roller med ”färdiga ursäkter” präglar tankefigurer ”pragmatisk hållning”, undvika negativa känslor, inte pröva egna

antaganden med verkligheten…