Changing Psychological Contracts and their Effect on Control Modes in IT Offshore Outsourcing Projects – A Case from the Financial Services Industry

This paper applies a psychological contract perspective to analyze changing control modes in IT offshore outsourcing projects. The research question is: How do changing psychological contracts between client and vendor personnel influence the use and employment of formal and informal control modes in IT offshore outsourcing projects? The research design is an exploratory and interpretive single-case study. Our findings suggest that incidents like unfulfilled expectations from one party of an offshoring endeavor can lead to a change of the psychological contracts between both companies project personnel, thus leading to different control modes employed.