The role of governance, reintegration and trust on performance and partnership stability in knowledge intensive outsourcing: a holistic approach

Outsourcing partnership management (OPM) is challenging for knowledge intensive outsourcing due to factors like task complexity and intrinsic uncertainty associated with these projects, dependence on external knowledge, and intricacies of knowledge transfer and integration. Through a structured approach, the present study aims to identify progress in OPM research and any existing gap(s). Subsequently, the aim is to present a holistic OPM context empirically for knowledge intensive outsourcing encompassing both “static” and “dynamic” perspectives of OPM. In this endeavour, a systematic review is employed to develop an integrating framework within the OPM literature and identify key gaps in academic research. Next, based on the gap identified in relation to a comprehensive understanding of the “static” perspective of OPM, this study contributes to a thorough understanding of the role of reintegration in knowledge intensive outsourcing. Contextualised within the Drug Discovery programmes in the pharma sector, a theoretical model for reintegration is developed to establish that for ensuring outsourcing success, reintegration partially mediates the relationship between partnership governance and outsourcing performance. Finally, this study extends the scope of OPM beyond a single contract cycle and probes the nuances of contract renewal which contributes to the understanding of the “dynamic” OPM perspective. In this context, a pivotal role of trust has been established where trust mediates the relationship between outsourcing performance and contract renewal. The all–encompassing “static” and “dynamic” perspectives of OPM make an important contribution to the understanding of what constitutes “real value” to the client in knowledge intensive outsourcing. While the utilisation of acquired knowledge is critical for achieving project specific goals in near term in a single contract cycle (i.e., the “static” perspective), for the longevity of the relationship a trusting relationship with the vendor is found to be more important for a contract renewal decision (i.e., the “dynamic” perspective).