2009 May 25

Jours fixes take place on the first monday of the month, starting at 5:00 p.m., in the House of Finance (Campus Westend).

[Frank Schlosser, E-Finance Lab]

What is the role of control in maintaining trust in outsourcing relationships? Although the literature is quite rich on conceptualizing the relationship between control and trust in inter-organizational relationships, there exist quite sparse quantitative works which help to evaluate the models developed. In this paper, data from 156 IT outsourcing relationships of German banks are analyzed in order to get insights into the actual relationships between different modes of control and the level of relational trust in these relationships. Additionally, the role of service quality (measured in terms of reliability and responsiveness) in this context is examined. The results show that trust is positively related with most modes of control, and that there is indicative evidence that control supports trust in high-service quality situations while it leads to a reduction of trust in relationships suffering from bad service quality (cycle of trust vs. distrust).