Organizational Forms and National Institutions
Edited by Marcela Miozzo and Damian Grimshaw
Chapter 6: Institutional Effects on the Market for IT Outsourcing: Analysing Clients, Suppliers and Staff Transfer in Germany and the UK
6. Institutional eﬀects on the market for IT outsourcing: analysing clients, suppliers and staﬀ transfer in Germany and the UK Damian Grimshaw and Marcela Miozzo INTRODUCTION This chapter explores the inﬂuence of the institutional context on the development of a fast-growing area of knowledge intensive business services (KIBS) – the market for IT outsourcing – in Germany and the UK. KIBS are deﬁned as those industries that have a relatively high skilled workforce and/or are intensive users of high technology (OECD 1999; p. 18). Several studies suggest that KIBS play a valuable role in economies as intermediary inputs (Daniels and Moulaert 1991; EC 1997), although their contribution is strongly inﬂuenced by the nature of client–supplier relations (Miles 2003; Tomlinson 2001). Nevertheless, few comparative studies have examined the role of institutional processes in shaping KIBS sectors and there has been very little attention to how these processes impact upon both supplier and client organizations. Investigation of institutional processes extends the results of existing literature in three potential ways. First, comparative analysis of IT outsourcing in Germany and the UK illuminates the interplay between heterogeneous institutional processes that impact upon IT outsourcing and the pressures for convergence exercised by powerful computer services ﬁrms. The ‘varieties of capitalism’ literature demonstrates that economic behaviour is embedded in institutions, guided by shared values and subject to path-dependent change (Hall and Soskice 2001), and that diﬀerences in organizational performance result in part from countryspeciﬁc institutional eﬀects (Lehrer and Darbishire 1997;...
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