THE POWER OF WHO WE ARE: HOW ORGANIZATIONAL IDENTITY INFLUENCES IT OUTSOURCING SUCCESS

Corporate Information Technology (IT) functions are under increasing pressure to succeed in their IT outsourcing (ITO) arrangements. This study examines the effect of organizational identity (OI) on ITO success. Building on a recent study confirming the positive role of OI strength on outsourcing success, we ask: Are there specific outsourcing and organizational conditions where organizational identity influences outsourcing success? Using the model from the previous study which substantiated OI’s influence on the pivotal antecedent – effective knowledge sharing – on ITO success, we conduct an empirical examination of 312 IT leaders engaged in outsourcing. We find that OI strength’s mediation effects are present when organizations outsource core functions, maintain a utilitarian OI orientation, and low cultural similarity between client and supplier exist. Understanding that organizational identity is a cultural element shaping ITO related behaviors discourages the development of simplistic “checklists” for practitioners as they seek to maximize the ITO relationships.