A Process Model of Complementarity and Substitution of Contractual and Relational Governance in IS Outsourcing

This paper develops a process model of how and why complementarity and substitution form over time between contractual and relational governance in the context of information systems outsourcing. Our analysis identifies four distinct process patterns that explain this formation as the outcome of interaction processes between key elements of both contractual and relational governance. These patterns unveil the dynamic nature of complementarity and substitution. In particular, we show that the relationship between contractual and relational governance oscillates between complementarity and substitution. Those oscillations are triggered mainly by three types of contextual events (goal fuzziness, goal conflict, and goal misalignment). Surprisingly, substitution of informal control did not occur as an immediate reaction to external events but emerged as a consequence of preceding complementarity. Thus, our study challenges the prevailing view of an either/or dichotomy of complementarity and substitution by showing that they are causally connected over time.

Unconscious relational inference recruits the hippocampus

Relational inference denotes the capacity to encode, flexibly retrieve, and integrate multiple memories to combine past experiences to update knowledge and improve decision-making in new situations. Although relational inference is thought to depend on the hippocampus and consciousness, we now show in young, healthy men that it may occur outside consciousness but still recruits the hippocampus. In temporally distinct and unique subliminal episodes, we presented word pairs that either overlapped (“winter–red”, “red–computer”) or not. Effects of unconscious relational inference emerged in reaction times recorded during unconscious encoding and in the outcome of decisions made 1 min later at test, when participants judged the semantic relatedness of two supraliminal words. These words were either episodically related through a common word (“winter–computer” related through “red”) or unrelated. Hippocampal activity increased during the unconscious encoding of overlapping versus nonoverlapping word pairs and during the unconscious retrieval of episodically related versus unrelated words. Furthermore, hippocampal activity during unconscious encoding predicted the outcome of decisions made at test. Hence, unconscious inference may influence decision-making in new situations.

Unconscious relational encoding depends on hippocampus

Textbooks divide between human memory systems based on consciousness. Hippocampus is thought to support only conscious encoding, while neocortex supports both conscious and unconscious encoding. We tested whether processing modes, not consciousness, divide between memory systems in three neuroimaging experiments with 11 amnesic patients (mean age = 45.55 years, standard deviation = 8.74, range = 23-60) and 11 matched healthy control subjects. Examined processing modes were single item versus relational encoding with only relational encoding hypothesized to depend on hippocampus. Participants encoded and later retrieved either single words or new relations between words. Consciousness of encoding was excluded by subliminal (invisible) word presentation. Amnesic patients and controls performed equally well on the single item task activating prefrontal cortex. But only the controls succeeded on the relational task activating the hippocampus, while amnesic patients failed as a group. Hence, unconscious relational encoding, but not unconscious single item encoding, depended on hippocampus. Yet, three patients performed normally on unconscious relational encoding in spite of amnesia capitalizing on spared hippocampal tissue and connections to language cortex. This pattern of results suggests that processing modes divide between memory systems, while consciousness divides between levels of function within a memory system.