Relationship Management at the Operational Level in Outsourcing

Research suggests that achievement of a successful outsourcing relationship requires a tremendous amount of detailed management. In this paper we draw on relationship theory to understand the management practices of a particular outsourcing setup. An empirical study of a Danish company operating an off shore development centre with 400 employees located in India identified a host of practices that form a seemingly complex and ambiguous picture. To make sense of the studied practice we develop a framework that consists of four relationship management strategies coined select-a-friend, develop-a-friend, control-a-person, and control-of-output. We provide illustrative examples of each strategy; reflect upon the alignment between the type of outsourcing setup and the identified portfolio of practices; and outline theoretical and practi cal implications. Key findings are that all four strategies are used, play an important role and that continuous improvement of the portfolio of relationship management practices is paramount to ensure effectiveness.