The role of Transaction Cost Economics in information technology outsourcing research : a meta-analysis of the choice of contract type

Two recent reviews report that the empirical findings in information technology outsourcing (ITO) research are frequently inconsistent with the prevailing dominant analytical framework of transaction cost economics (TCE). While employing similar methodologies, the two reviews propose different strategies to resolve the inconsistencies. One is to improve the methodological rigor, specifically, the operationalization of TCE constructs. The other is to abandon TCE in favor of a new analytical framework. This paper presents a meta-analysis of the empirical findings on the choice of contract type as a function of task uncertainty. The results support both strategies. Refining the operationalization of TCE constructs, specifically of task uncertainty, would have improved the reliability of findings on TCE-based relationships between task uncertainty and the choice of contract type. However, independent of such methodological improvements, TCE is of limited relevance in recent ITO research for predicting the choice of contract type. Generalizing these findings, we conclude that ITO research requires a new analytical framework to further develop the theory of ITO and to provide sound guidance to the ITO industry.

Transaction cost economics and industry maturity in it outsourcing: a meta-analysis of contract type choice

Recent reviews of the information technology outsourcing (ITO) literature report high variance in research results when Transaction Cost Economics (TCE) is used as the analytical framework. Informed by ITO market developments, including increasing commoditisation, market consolidation, and market transparency, we develop an explanation for these mixed results contingent on ITO industry maturity. We adopt meta-analysis to show that ITO industry maturity significantly explains variance in the choice of contract type (time and materials vs. fixed price) in ITO projects. Our results suggest that TCE is relevant to explain the choice of contract type in the emerging phase of the ITO industry, but not in its current mature phase. We conclude that a TCE-based analytical framework is not well suited for the study of ITO in the current mature industry phase. Instead, we propose that an "endogenous" ITO theory should be developed that focuses on differences in client behaviour rather than vendor behaviour.

An examination of psychological contracts, careerism and intention to leave

Purpose - The aim of this paper is to investigate the relationships between elements of the psychological contract (i.e., type and fulfilment) and an employee’s intention to leave (ITL) their current organisation. The role of careerism as a potential mediating and moderating variable is also explored.

Design/methodology/approach - Allied Health Professionals (N=202) completed a questionnaire containing measures of the psychological contract, careerism and ITL.

Findings - As predicted, path analyses conducted via structural equation modelling demonstrated that careerism partially mediates the relationship between contract types and ITL. These findings suggest that employees with transactional contracts are more careerist, resulting in higher ITL, while employees with relational contracts are less careerist, resulting in lower ITL. Contrary to expectation, a hierarchical multiple regression analysis revealed that careerism failed to moderate the relationship between perceived contract fulfillment and ITL. However, a strong positive association between contract fulfillment and ITL was found.

Research limitations/implications - The data were collected cross-sectionally, which limits the ability to make causal inferences.

Practical implications - Results were consistent with the proposition that contract type and fulfillment predict employee ITL. It appears that employees with relational contracts are more likely to remain with their organization on a longer-term basis, compared to employees with transactional contracts, due to differences in career motives. Organizational awareness and understanding of employee psychological contracts and career motives is needed.

Originality/value - This paper provides new theoretical and practical insights on how psychological contracts and careerism can influence Intention to leave among Allied Health Professionals.

Employee psychological contracts

This thesis concerns the psychological contracts of employees. A psychological contract is an employee’s perception that: 1) an employer has certain obligations to them, and 2) in return, they have obligations as employees. A psychological contract is therefore a set of subjectively perceived reciprocal obligations. The psychological foundations of this construct are linked with cognitive schemas and social exchange theories. While the concept of psychological contracts was first proposed in the early 1960s, it has only been operationalised for empirical study in the last decade. The purpose of the thesis was to increase the understanding of the content and structure of employee psychological contracts and their links with career cognitions. The specific aims of the thesis were to: 1) examine the relational-transactional dimensions of psychological contracts, 2) develop a comprehensive set of workplace obligations for use with employees, 3) consider alternative dimensions of employee psychological contracts, 4) demonstrate reciprocity between obligations, and 5) determine whether psychological contracts directly affect career cognitions. The thesis contains four quantitative studies. Data were collected using self-report questionnaires that contained both established and new measures. Most participants were employees from a large insurance company, government vocational services or educational institutions. The analyses included canonical correlation, factor analysis, development of measurement models and structural analysis. The findings did not strongly support a distinction between relational and transactional obligations. Instead, a five-factor model of psychological contracts emerged from an expanded set of workplace obligations when it was used with two separate employee samples. This model demonstrated reciprocal relationships between the dimensions of employee and employer obligations. It was also found that alternative dimensions of the psychological contract have a direct influence on organisational commitment and career satisfaction. The thesis supports several general conclusions about the nature of employee psychological contracts, appropriate measures and future research. General workplace obligations that apply across different workplaces can be found, and these should continue to be refined. Such workplace obligations group in meaningful ways, and they can be usefully studied in terms of employer support and employee attitudes to work, rather than in terms of relational and transactional dimensions. Furthermore, this thesis shows that reciprocity in psychological contracts can be demonstrated by correlations between dimensions of employee and employer obligations. The measure used for studying reciprocity was new, and it requires further work. However, this measure is as reliable and valid as any currently available. Measurement is the single most urgent issue facing researchers. Finally, this thesis provides sufficient empirical evidence to support the claim that psychological contracts are an important variable for the understanding of careers.

Perceptions of fairness in the psychological contracts of allied health professionals

Purpose-The purpose of this paper is to investigate the relationships between components of the psychological contract, organisational justice, and negative affectivity (NA), with key employee outcomes (i.e. organisational commitment, job satisfaction, depression, and psychological distress) among allied health professionals. Design/methodology/approach-In total, 134 (response rate of 46 per cent) Australian allied health professional completed a questionnaire. Findings-Multiple regressions revealed that higher NA was associated with lower organisational commitment, lower job satisfaction, and higher levels of depression. The psychological contract variable, breach, was associated with depression. Informational justice was associated with organisational commitment. Distributive justice was associated with job satisfaction. Research limitations/implications-This research is limited by its cross-sectional design and that the data were self-reported. The results obtained suggest the potential utility of collecting longitudinal data to replicate and extend the results. Practical implications-While NA may be beyond management control, it may be ameliorated by attention to improving communication of management decisions and by sensitivity to the elements implicit in psychological contracts. The negative consequences of contract breach may be offset by informational and distributive justice. Originality/value-This study is one of the first to examine multiple measures of the psychological contract in addition to organisational justice and NA. Further, this study adds to the literature for allied health professionals, where little is known about factors contributing to their turnover.

Predictors of job strain and intention to quit in a reorganised Australian workforce

This study examined the role of working conditions in predicting the psychological health, job satisfaction, organisational commitment and intention to quit of employees working in an industry sector that had undergone large-scale organisational change. The working conditions were assessed using an augmented job strain model- whereby job demand, job control and social support had been augmented by industry-specific stressors - and the psychological contract model. The results of regression analyses indicate that social support was predictive of all of the outcome measures. Job control and the honouring of psychological contracts were both predictive of job satisfaction and commitment, Furthermore, job satisfaction and organisational commitment were found to mediate the relationship between working conditions and intention to quit. Collectively, these findings suggest that strategies aimed at combating the negative effects of organisational change could be enhanced by addressing several variables represented in the models - particularly social support, job control and psychological contracts.

Predictors of wellbeing experienced by Australian police officers

The aim of this study was to assess the ability of the Demand-Control-Support (DCS) model as well as the psychological contract model (PCM) to predict the wellbeing experienced by 2,566 Australian police officers. While the level of explained variance attributed to the PCM was substantially less than the DCS, measures of contract breach and organisational fairness still captured significant portions of intrinsic and extrinsic job satisfaction. Overall, the results of this study suggest that both the DCS and the PCM should figure prominently in strategies aimed at reducing or preventing police stress.

Sources of well-being and commitment of staff in the Australian Disability Employment Services

This study examined the role of working conditions in predicting the psychological health, job satisfaction and organisational commitment of personnel responsible for helping people with disabilities gain employment in the mainstream Australian labour market. The working conditions were assessed using two theories: the Job Strain Model (job demand, social support and job control) and Psychological Contract Theory (unwritten reciprocal obligations between employers and employees). In the case of the Job Strain Model, the generic dimensions had been augmented by industry-specific sources of stress. A cross-sectional survey was undertaken in June and July 2005 with 514 staff returning completed questionnaires (representing a response rate of 30%). Comparisons between respondents and non-respondents revealed that on the basis of age, gender and tenure, the sample was broadly representative of employees working in the Australian disability employment sector at that time. The results of regression analyses indicate that social support was predictive of all of the outcome measures. Job control and the honouring of psychological contracts were both predictive of job satisfaction and commitment, while the more situation-specific stressors - treatment and workload stressors - were inversely related to psychological health (i.e. as concern regarding the treatment and workload stressors increased, psychological health decreased). Collectively, these findings suggest that strategies aimed at combating the negative effects of large-scale organisational change could be enhanced by addressing several variables represented in the models - particularly social support, job control, psychological contracts and sector-specific stressors.

Do repatriate support practices influence repatriate experience, organisational commitment, turnover intentions and perceptions of career success?

The focus of this paper is the development of a model for the effective management of repatriation in multinational enterprises (MNEs). It reviews the literature associated with the relationships between repatriate support practices in relation to repatriation experiences, organisational commitment, turnover intentions, and perceptions of career success. A model has been developed where it is hypothesized that the perception of the provision of important and higher quality practices will result in positive repatriation experiences A positive experience will be positively related to organisational commitment, and perceptions of career success, and negatively related to turnover intentions. These relationships are based on the concepts of social support, uncertainty reduction theory, and psychological contract theory.

Integrating job stress and social exchange theories to predict employee wellbeing

This research examines the organizational characteristics that contribute to employee wellbeing in public sector agencies that have undergone substantial organizational change. Two studies were undertaken, the first involving 2,466 police officers working in a statebased law enforcement agency, whereas the second comprised 1,010 occupationally diverse employees working in a State Government authority. The research was guided by a theoretical framework that begins with a model underpinning many large-scale job stress investigations—the job strain model (JSM)—and is expanded to incorporate widely used social exchange variables (i.e., psychological contract breach and organizational fairness). The results of hierarchical regression analyses from both studies confirm the value of the JSM. There was also strong support for extending the JSM to include the breach and fairness variables; however, proposed interactions between job demands and organizational fairness failed to add to the explanatory value of the model. The implications of these results particularly for public sector organizations that have undergone extensive reforms consistent with New Public Management are discussed.

Integrating job stress and social exchange theories to predict employee strain in reformed public sector contexts

This research examines the organizational characteristics that contribute to employee wellbeing in public sector agencies that have undergone substantial organizational change. Two studies were undertaken, the first involving 2,466 police officers working in a state-based law enforcement agency, whereas the second comprised 1,010 occupationally diverse employees working in a State Government authority. The research was guided by a theoretical framework that begins with a model underpinning many large-scale job stress investigations—the job strain model (JSM)—and is expanded to incorporate widely used social exchange variables (i.e., psychological contract breach and organizational fairness). The results of hierarchical regression analyses from both studies confirm the value of the JSM. There was also strong support for extending the JSM to include the breach and fairness variables; however, proposed interactions between job demands and organizational fairness failed to add to the explanatory value of the model. The implications of these results particularly for public sector organizations that have undergone extensive reforms consistent with New Public Management are discussed.

The maternity journey in an organisational context : a case study

The transition to motherhood is a significant life event impacting on all spheres of a woman's life. In an organisational context, changes to women's relationships with their employer and to their social identity occur as they adjust to their new role. A case study was undertaken to describe and compare the workplace experiences of three female employees from one health organisation who were either preparing to commence, currently on or recently returned to work from maternity leave. At all stages of the maternity journey, women expected flexibility from their employer in negotiating their return to work and managing parenting responsibilities. Women's obligations to their employer included being open about their capacity to work and parenting situations which may interfere with their work, as well as maintaining their work performance. Within a supportive work environment that included a shared identity with managers who were also mothers, women's social identity as a worker was not significantly threatened and did not change. Social identity change may be most apparent during the transition to first-time motherhood.