An Empirical Examination of Organizational Commitment Across Psychological Contract Matching Patterns in Information Technology Outsourcing (ITO)

Abstract

The demand for information technology outsourcing (ITO) providing large-scale professional services has developed into a mature and essential industry for many organizations. Against this backdrop, managing the internal workplace relationship and organizational commitment levels between the vendor firm providing critical ITO services and the vendor’s employees performing the work for the external client is a significant emerging challenge for all involved parties. Contracts in various formats and structures (transactional or psychological) are often applied as a universal tool to govern the complex ITO relationship. However, the formal or transactional contract may not be enough to ensure employee commitment to position the ITO relationship for success. This paper investigates the impact that the psychological contract has on organizational commitment across different matching patterns between the outsourcing vendor and the vendor's employees. Building upon empirical findings and theoretical perspectives of a systematic grounded theory-based literature review, business observations, and best practices, we develop a theoretical framework that categorizes the matching patterns of the vendor-employee psychological contract into four types: Vendor Dominant, Employee Dominant, Mutual Relational, and Mutual Transactional. Our findings from an analysis of 562 survey participants demonstrate that the employee's relational psychological contract has a higher positive influence on organizational commitment than the employee's transactional psychological contract in both matching and mismatching situations. The implications and future research avenues of study are discussed.