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Journal of Information Technology (2008) 23, 232–248

& 2008 JIT Palgrave Macmillan. All rights reserved 0268-3962/08


palgrave-journals.com/jit/

Research article

Anxiety and psychological security


in offshoring relationships: the role
and development of trust as
emotional commitment
Séamas Kelly, Camilla Noonan
Centre for Innovation, Technology and Organisation (CITO), UCD School of Business, University College Dublin, Ireland

Correspondence:
S Kelly, Centre for Innovation, Technology and Organisation (CITO), UCD School of Business, University College Dublin,
Ireland.
Tel: þ 353 1 7164728;
Fax: þ 353 1 7164783;
E-mail: seamas.kelly@ucd.ie

Abstract
In this paper we focus on the neglected role of anxiety and psychological security in
organizational life, specifically in the context of the organization and development of
offshoring relationships that extend across time and geography. In contrast with much of
the literature on offshoring (and inter-organizational relationships more generally), which
tends to take a very conventional rational decision-making perspective on the
phenomenon in question, we emphasize the less tangible, emotional dimensions. In
particular, we are concerned with understanding the processes by which clients, who
have little or no previous experience of offshoring, may develop and sustain adequate
levels of psychological security to enable them to bracket risk and productively engage in
such unfamiliar and alien work arrangements. To this end, we draw on Anthony Giddens’
distinctive, non-cognitivist conception of trust, supplemented by other important
contributions in the area, to explore the processes by which a sense of psychological
security and stability is achieved in the face of the quotidian anxieties provoked
by engagement in these contemporary modes of global organizing. Our synthesized
theoretical framework is developed and illustrated in the context of an ongoing, in-depth,
longitudinal study of the evolution of an Ireland–India information systems offshoring
relationship. By tracing the dynamics of this relationship over an 18-month period, we
examine the practices (or ‘relationship work’) through which trust is produced,
and suggest that different mechanisms can be discerned at different (albeit overlapping)
stages of the relationship. In the earlier phase, the emphasis is on the role played
by care and attentiveness in producing a sense of trust in the qualities of the supplier.
As the relationship develops, however, the emphasis shifts to the production of a
stable collaborative order. Here, we focus on the micro-political dynamics of such
processes and draw attention to three important tactical interventions (brokerage,
signaling, and the ‘third man’). We conclude by arguing that the sense of trust that
was carefully cultivated in the earlier phase of the relationship provided a crucial
foundation, which not only facilitated the subsequent development of a stable
collaborative order but, most noticeably, helped contain a serious crisis that beset the
project in December 2006.
Journal of Information Technology (2008) 23, 232–248. doi:10.1057/jit.2008.15
Keywords: IS offshoring; risk; anxiety; psychological security; trust; emotion; interpretive study
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
233

Introduction
his paper explores the role of anxiety and psychological The case focuses on a crucial 18-month period in the

T security in the development and sustenance of


information systems (IS) offshoring relationships. In
particular, we are concerned with understanding the
Irish firm’s (NetTrade) commercial evolution, during which
a decision was made to outsource the development of a
replacement for their core technology to the offshore
processes by which clients, who have little or no previous facilities of a large Indian software vendor (IndiaSoft). We
experience of offshoring, may develop and sustain adequate examine the ongoing implementation process as it un-
levels of psychological security to enable them to bracket folded: from NetTrade’s initial decision to look for a
risk and productively engage in such unfamiliar and alien suitable vendor, through the development of the NetTrade–
work arrangements. By broadening the discussion of risk, IndiaSoft relationship, to the delivery of the first major
and considering its particular salience in the context of IS component of the system. The notions of risk and anxiety
offshoring initiatives, we attempt to move beyond the had a special salience in this context due to the key strategic
cognitivist perspectives that have traditionally dominated importance of the system and the scale of the development
the management/organization studies literature, to rescue project in relation to the size of NetTrade (the projected
concerns with important emotional dimensions of organi- cost of the system actually exceeded the Net Asset Value of
zational life from the margins of scholarly discourse (cf. the entire firm at the time). Moreover, before IndiaSoft
Ciborra, 2006; McGrath, 2006). was suggested as a possible option to NetTrade, nobody in
While the management of risk has long been seen as a the firm had any awareness of, let alone given any
central problem in software development generally (Barki consideration to, an offshore IT sourcing model. IndiaSoft,
et al., 1993; Willcocks and Margetts, 1994; Boehm and for its part, has no other Irish client of equivalent size to
Demarco, 1997), and IT outsourcing more specifically (Earl, NetTrade.
1996; Willcocks and Lacity, 1999; Willcocks et al., 1999), In our analysis of the case, we argue that the develop-
work in this area has focused mainly on rational strategies ment of the offshoring relationship to this point involved
for dealing with risk (e.g. its identification, assessment, and two distinctive, yet overlapping and mutually reinforcing,
management), rather than on the manner in which it is phases (Courtship and Cohabitation) that demanded
experienced and handled at an emotional level. One notable different kinds of practices and skills for their successful
exception1 is Wastell’s (1996) use of psychoanalytic theory negotiation. From the client’s point of view, two salient
to examine the unhelpful ways in which systems develop- forms of trust were important: trust in the qualities of the
ment methodologies may be used to combat insecurity and vendor; and trust in the stability and predictability of
anxiety on the part of developers (see also Wastell, 1999, the collaborative social order (i.e. trust as ‘habitus’). In the
2003). Wastell draws on the work of writers such as Melanie Courtship phase, the emphasis was primarily on the client
Klein (Segal, 1989) and DW Winnicott (1987) to explore the developing trust in the vendor’s ability to deliver the system
psychodynamics of organizational life. In particular, he and in the latter’s integrity and benevolence toward the
considers how ostensibly ‘rational’ tools and practices former. This trust rested primarily on presentational
(such as development methodologies) may play important (through the performances of vendor representatives at
roles as ‘social defenses’ against the acute anxieties of key access points) and reputational bases, although
organizational life (cf. Hirschhorn, 1988; Menzies-Lyth, characteristic-based and institutional-based mechanisms
1988). While this insightful analysis opened up a very also played a role. In the Cohabitation phase, by contrast,
promising direction for the study of systems development the emphasis shifted to a struggle to construct a stable
practice, however, it has not been built upon subsequently. collaborative order, where both parties had to come to
Moreover, the ideas have not been applied to contemporary mutual accommodations about key social practices (pri-
globalized contexts where distributed forms of development marily communicative practices in this case). These
and offshoring are commonplace. practices contributed to the predictability of the social
Although having much in common with Wastell’s work, order and, importantly, their successful negotiation and
our theoretical point of departure in this paper is slightly institutionalization was dependent on the skillful balancing
different. Specifically, we draw on Anthony Giddens’ ideas of ‘trust, tact and power’ (Giddens, 1990: 82).
on the changing nature of risk, anxiety, and trust in the The paper is structured as follows. In the following
context of the contemporary globalization of social rela- section we synthesize a distinctive theoretical perspective
tions.2 Using this work, and particularly Giddens’ notion of that illuminates the relationship between the emergence
trust as an ‘emotional commitment,’ we attempt to illustrate of new modes of global working, risk, anxiety, and trust.
the central role of anxiety in shaping the contours of In particular, we emphasize the important role of trust, as
organizational life and to examine the mechanisms used to an ‘emotional commitment,’ for the production of a
produce the sense of psychological security that is vital to sense of psychological security that facilitates the bracket-
active engagement with environments characterized by risk. ing of risk and engagement with unfamiliar practices
Furthermore, we highlight the particular importance of that are distributed across time–space. We then go
such a perspective to the area of IS offshoring, by arguing on to outline our research approach to the empirical
that the globally distributed nature of such work alters the fieldwork (i.e. the NetTrade–IndiaSoft case) upon
risk profile of systems development while simultaneously which the paper is based, before describing and analyzing
problematizing conventional mechanisms for producing the case study in some detail. We conclude by reflecting
psychological security. We illustrate these insights in the on the key conclusions that might be drawn from the
context of an ongoing, in-depth, longitudinal study of an work and their wider implications for research and
Ireland–India IS offshoring relationship. practice.
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
234

The problematization and production of psychological by, or expressed in, social connections established in
security in a globalized context – risk, anxiety, conditions of co-presence).
and trust as ‘emotional commitment’ The investment of trust in abstract systems (especially
In this section, we draw on the work of Anthony Giddens expert systems) is a central feature of modern life. No one
and others, in an attempt to synthesize a distinctive can completely opt out of the abstract systems involved in
theoretical lens that illuminates some of the social/ modern institutions yet, due to their diversity and
psychological challenges associated with working and living complexity, our knowledge of their workings is necessarily
in an increasingly globalized contemporary world. The limited. Therefore, trust (or faceless commitments) be-
perspective presented not only underscores the renewed comes a very important means of generating the ‘leap of
importance of mechanisms for containing anxiety, and faith’ that practical engagement with them demands. Often,
establishing a robust sense of psychological security within however, engagement with abstract systems involves
the altered risk profile of high modernity, but it also casts encounters with individuals who ‘represent’ or are ‘respon-
light on the practical operation of such mechanisms. In sible’ for them (e.g. in the case of visiting a medical doctor
short, it provides insight into the practices through which who represents a broader system of medical knowledge).
psychological security is actively produced, thus facilitating Such contacts with experts are very consequential and take
the bracketing of risk necessary for meaningful engagement place at access points, which form the meeting ground of
in social relations that extend across time–space. Not only facework and faceless commitments.
does this direct analytical attention to crucial, yet often In the case of some experts (e.g. a doctor) where
neglected, aspects of software development practice, but it encounters take place regularly over a period of years,
also sensitizes us to the difficulties that arise when these these can take on the characteristics of trustworthiness
practices are stretched across tracts of time–space, as is the associated with friendship and intimacy. However, in
case in offshore development contexts. general, encounters with experts are much more irregular
Anthony Giddens’ (1990, 1991) ideas on globalization, and transitory than this and, therefore, they have to be
anxiety, and the production of trust provide the conceptual managed very carefully by the expert if he or she is to win
starting point for our work.3 In what follows in this section, we or maintain trust of the laypeople involved. Drawing on the
introduce some of Giddens’ key ideas in relation to work of Erving Goffman (1956), Giddens argues that
globalization, risk, anxiety, and the production of trust, before facework commitments are dependent on the demeanor
going on to supplement this perspective by drawing on the of operators and, therefore, such encounters often involve
work of a number of other important scholars in the area. This displays of ‘manifest trustworthiness and integrity, coupled
synthesized theoretical basis is then employed to make sense with an attitude of ‘‘business as usual’’ or unflappability’
of the NetTrade–IndiaSoft case that is described subsequently. (Giddens, 1990: 85). Access points remind people of the
fallible nature of system operators and, therefore, reassur-
ance is called for, both in the reliability of the individuals
involved and in the knowledge or skills upon which their
Giddens on globalization, risk, anxiety, and the production
expertise relies. Thus, experts must make a strict division
of trust between ‘frontstage’ and ‘backstage’ performance at access
Giddens (1990) argues that the risk profile of the modern points, and the control of threshold between the two is the
globalized world has been dramatically altered as institu- essence of professionalism. Attitudes of trust are strongly
tional reflexivity has increased and social relations are influenced by experiences at access points, as well as by
disembedded from local contexts and stretched over updates of knowledge provided by mass communications
extended tracts of time–space. These new social arrange- media and other sources.
ments have problematized the means by which individuals Thus, facework commitments are an important means of
establish and maintain a sense of psychological security and generating continued trustworthiness in the abstract
coherent identity (Giddens, 1991), which has resulted in the systems of modernity with which we routinely interact. In
simultaneous transformation, and renewed importance, of this way, trust in impersonal abstract systems is anchored
trust relations. in the trustworthiness and integrity of colleagues. Of
According to Giddens, trust is inherently connected to course, regular encounters and rituals are required to
absence (there is no need to trust what one can directly sustain such collegial trustworthiness: that is, trust rests on
monitor), and is bound up with the organization of ‘reliable’ a ‘presentational base.’
interactions across time–space. He defines trust as: Crucially, in Giddens’ terms trust is not a cognitive/
calculative phenomenon but, rather, is based on an
y confidence in the reliability of a person or system, emotional commitment to things being as we expect them
regarding a given set of outcomes or events, when that to be. This marks a key distinction between his perspective
confidence expresses a faith in the probity or love of and more conventional approaches to conceptualizing trust
another, or in the correctness of abstract principles. as the product of calculative, deliberative, rational decision-
(Giddens, 1990: 34) making processes that are common in the mainstream
management literature (McAllister, 1995; Ring, 1996;
Thus, he distinguishes between two types of trust Rousseau et al., 1998).5 For Giddens, then, trust should be
relations prevalent in modern societies: trust in abstract understood as a sense of emotional comfort, a device that
systems4 and personal trust. The former are based, to a large can be used to ‘bracket out’ potential risks (Giddens, 1990)
extent, on faceless commitments while the latter depend on and generate the ‘leap into faith’ that cooperative engage-
facework commitments (trust relations that are sustained ment with others demands (Gambetta, 1988).
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
235

From this perspective, then, trust is a continuous state, ability, benevolence, and integrity. Ability is defined (Mayer
rather than a discrete decision, and a key mode of trust et al., 1995: 717) as ‘the group of skills, competencies and
production are stable institutionalized routines, what characteristics that enable a party to have influence within
Misztal (1996: 127) terms trust as ‘habitus.’ Having stable some specific domain. The domain of the ability is specific
and well-recognized rules of interaction gives a sense of because the trustee may be highly competent in some
predictability, reliability, and legibility to social life, thus technical areas, affording that person trust on tasks related
reducing the anxiety caused by the ambiguity and openness to that area. However, the trustee may have little aptitude,
of many social situations. The construction of a shared set training or experience in another area, for instance, in
of stable social practices among people who are strangers or interpersonal communicationy. Thus, trust is domain
mere acquaintances, however, can be problematic and calls specific.’ Benevolence, on the other hand, is defined as the
for the balancing of ‘trust, tact and power’ (Giddens, 1990: extent to which a trustee is believed to want to do good to
82). As Giddens (1990: 82–83) puts it: the trustor, aside from an egocentric profit motive
(suggesting that the trustee has some specific attachment
Tact and rituals of politeness are mutual protective to the trustor). Finally, the relationship between integrity
devices, which strangers or acquaintances knowingly use and trust involves the trustor’s perception that the trustee
(mostly at the level of practical consciousness) as a kind adheres to a set of principles that the trustor finds
of implicit social contact. Differential power, particularly acceptable.
where it is very marked, can breach or skew norms of tact If the dispositions and character of a collection of people
and politeness rituals. are individually well known to each other, then cooperative
relations may be founded on, what Williams terms, thick
The implications of this are twofold. First, it emphasizes trust (Williams, 1988: 8). In other words, cooperation
the importance of a stable social order for the production of among a group of individuals is greatly facilitated if they
trust and reduction of anxiety.6 Second, it emphasizes the have established personal bonds and know one another
important role of tact and rituals of politeness, in the very well. However, where thick trust does not exist, other
absence of marked differential power, in helping to bring means of establishing or producing trust are required as a
about the mutual accommodations required to develop and basis for cooperation. Zucker identifies three key modes of
sustain any stable collaborative order. In other words, trust production in the modern world (Zucker, 1986):
attention is drawn to the micro-politics of trust production. process-based (information based on personal experience),
Overall, then, we argue that Giddens’ perspective is based characteristic-based (information based on ascribed char-
upon a richer conceptualization of the human subject (i.e. acteristics), and institutional-based (formal protection
one that incorporates emotional concerns with anxiety and against default).
psychological security at its very core). This constitutes a In modes of process-based trust production ‘a record of
refreshing departure from much of the mainstream prior exchange, often obtained second hand or by
management literature on trust, which tends to have a imputation from outcomes of prior exchange, provides
cognitivist orientation, focuses mainly on inter-personal (or data on the exchange process’ (Zucker, 1986: 60). There-
inter-organizational) forms of trust, and has little to say fore, process-based trust is based on the availability of large
about the distinctive role of trust (and the means by which quantities of person- or group-specific information that can
it might be established) in the context of increasingly often be in the form of positive reputations.7 Information
globalized social relations. Three issues are especially about prior exchange histories can be obtained by engaging
salient in this regard: Giddens’ view of trust as a matter in repetitive exchanges with a party and, therefore, such
of ‘faith’ or an ‘emotional commitment,’ his distinction informal trust-producing mechanisms ‘require extensive
between personal and impersonal forms of trust (and his interaction over long periods of time and/or produce trust
theorization of the relationship between the two), and his between a small number of individuals involved in a limited
observation that new modes of trust production (based on set of exchanges’ (Zucker, 1986: 62). Such exchange
the interaction between personal and impersonal forms of relationships are generally highly specific to the parties
trust) become especially important for securing a sense of involved in the exchange and involve idiosyncratic under-
emotional comfort in the context of a more globalized standings and rules. Thus, trusting relationships are built in
world. Not only does Giddens illustrate the importance of successive stages, tentatively and conditionally over time
impersonal forms of trust in systems, but he also (Good, 1988).
demonstrates how this is linked to, and indeed grounded A more formal mechanism for the production of process-
in, personal forms of trust. Despite the emphasis Giddens based trust involves the use of reputation (or brand name
places on personal trust, however, he does not explore its in the case of products). As Misztal puts it:
constitution in any great detail. In the next section, we draw
on ideas from other scholars to supplement Giddens’ work Reputation permits us to trust another person by
in this regard. providing us with some information regarding the sort
of person we are dealing with, before we have had a
chance to have contact with that person. (1996: 120–121)
Supplementing Giddens’ ideas – exploring the nature of, and
bases for, personal trust Thus, reputation serves as a warrant for trust and can,
In a review of the literature, Mayer et al. (1995) identify therefore, be seen as valuable social capital (Misztal, 1996:
three characteristics of a trustee that consistently appear: 121). The establishment of a favorable reputation requires
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
236

significant investments of time and resources and is, thus, CODA


something that individuals and groups will be very careful In summary, then, we have attempted to synthesize a
to maintain. Therefore, a reputation not only provides distinctive theoretical perspective that emphasizes the
information about the trustworthiness of an individual or important role of anxiety and the production of psycholo-
group, but also serves as a device for restricting the gical security in globalized contexts. This perspective draws
behavior of those who have invested in it (Misztal, 1996: largely upon Anthony Giddens’ ideas about the relationship
98). Reputation, therefore, promotes cooperation by between the risk profile of the contemporary globalized
increasing the possibility of carrying out promises, thus world, existential anxiety, and the production of trust. The
helping to facilitate efficient contractual relations by value of this approach lies in the emphasis that it places on
allowing economic agents to reduce transaction costs and important emotional and existential aspects of organiza-
overcome limited information (Dasgupta, 1988; Lorenz, tional life that are typically marginalized in the mainstream
1988: 198–202). literature. Trust is viewed as an inherently non-calculative
The second basis for trust, according to Zucker (1986), is phenomenon, an active accomplishment that is founded on
individual characteristics. Such characteristics may be emotional commitments. It is through the establishment of
ascribed to individuals through labeling or stereotyping trust in people and systems that agents can be psycholo-
mechanisms: gically comfortable enough to ‘bracket’ risk and produc-
tively engage with an inherently insecure world, where
social relations routinely span cultural and geographical
When there is scarcity of information, particularly when boundaries.
we have more information about the group than an
individual member, there is a tendency to simplify the
perception of the social environment by identifying all Research approach and methods
individuals with the groups to which they belong. The empirical research described in this paper is the result
(Misztal, 1996: 126) of an ongoing, in-depth, longitudinal, interpretive study of
the establishment and ongoing development of the off-
shoring relationship between NetTrade and IndiaSoft. We
Thus, characteristics such as gender, ethnicity, family followed the project since its inception in the latter part of
background, or age may be used as an index of trust 2005, when we were introduced to the case by John (joint
in a transaction, as they ‘serve as indicators of member- CEO of NetTrade), a close friend of one of the research
ship in a common cultural system, of shared background team. Through John we managed to secure the cooperation
expectations. In general, the greater the number of and involvement of IndiaSoft. We established contact with
social similarities (dissimilarities), the more interacts their local office in Dublin and negotiated further access to
assume that common background expectations do the development center (IndiaCity) in India. In this paper,
(do not) exist, hence trust can (cannot) be relied upon’ we focus on the key events that shaped the project, from its
(Zucker, 1986: 63). Furthermore, as in the case of instigation in late 2005 to the delivery of the first working
reputations, stereotypes or preconceptions are not software in January 2007.
easily changed, even in the face of challenging evidence. At the outset, the data collection consisted mainly of
New information about an individual will tend to be informal chats with John, but as the project gathered pace, a
interpreted in accordance with existing preconceptions, more systematic approach was employed. A range of
thus serving to reinforce those preconceptions (Good, ethnographic methods were used. In addition to a number
1988: 41). of visits to the NetTrade offices in Dublin, we spent one
The third basis of trust production, institutional, is more week at IndiaCity development center conducting inter-
generic in its application, in that it extends beyond a views, observing activities, and reviewing various docu-
specific transaction or set of exchange partners (Zucker, ments associated with this project. Overall, we interviewed
1986: 63). Two types of institutional-based trust are the 14 key players involved in the project, in formal and
identified: person-specific (or firm-specific) and intermedi- informal settings, many of them repeatedly and for
ary mechanisms. Person- or firm-specific trust depends on extended periods of time. This amounted to approximately
membership of a social group ‘within which carefully 35 h of formal interviews and at least this much time again
delineated specific expectations are expected to hold, at spent observing in the workplace and attending informal
least in some cases based on detailed prior socialization’ outings. Furthermore, key personnel at NetTrade were
(Zucker, 1986: 63). The professionalization of occupations requested to keep a written journal, reflecting on their
(see Reed, 1992: 206–213) provides a very clear illustration interactions with IndiaSoft, particularly during their early
of how this type of trust can be signaled. Thus, for example, visits to India. Herein, they recorded their impressions and
the attainment of specific educational or professional observations at critical junctures in the project. Obviously,
certifications can signal one’s trustworthiness within a our presence in the workplace, and respondents’ awareness
particular social sphere. The second type of institutional that their journals would be read by us, inevitably had a
trust, intermediary mechanisms, involves insuring against bearing on their actions and reports. This, however, was
potential losses in the event of a transaction not being mitigated to some extent by the fact that we developed good
completed or failing to produce the expected results. relationships with participants over time, and by our efforts
Intermediary institutions such as courts of law or insurance to deliberately cultivate an open, reflective, learning culture
companies specialize in protecting parties involved in an around the offshoring project. As time went on we noticed
exchange in this way. that people appeared to be much more willing to discuss
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
237

more sensitive issues (such as mistakes that they might would ‘put us [them] on a different planet entirely’ (John,
have made) with us in an open and forthright way. joint CEO, NetTrade).
Although we present a very granular discussion of the In autumn 2005, NetTrade set out to formally identify a
evolution of this offshoring relationship, we acknowledge partner to develop the system for them. As this was the key
that, owing to the relationship that exists between John and strategic system upon which future prosperity depended,
one of the researchers, we had much richer access to data the quality of the delivered product was paramount.
from the NetTrade side (which constitutes the analytical Consequently, it was with some trepidation that NetTrade
focus of this paper). We fully acknowledge that interviews approached the development project:
held at the Indian site were likely to have been colored by
this relationship and we are keenly aware of this limitation. It was difficult because we didn’t know what we were
As the research progresses, however, our relationship with doingy we were shooting in the dark and did not know
IndiaSoft is becoming much stronger and independent of who would be even interested in doing business with us
NetTrade. Moreover, as our concern in this paper is mainly (John, Joint CEO, NetTrade)
with the manner in which the key actors at NetTrade
developed a sense of trust in the offshoring relationship,
The firm was very conscious that it would be financially
the quality of our access to the Irish side was of prime
exposed should anything go wrong (the projected cost of
importance.
the system was greater than the Net Asset Value of the
In line with our interpretive research approach our
entire firm at that point in time). They decided to manage
emphasis was on developing a rich historical, processual
this risk by insisting to potential vendors that the project be
analysis of the relationship as it unfolded over time
structured in stages (or ‘bite-sized chunks’). This meant
(Pettigrew, 1990; Van de Ven and Poole, 1995, 2005); as
that NetTrade would pay for each deliverable and would
such the aim was to produce an idiographic, as opposed to
reserve the right to pull back from the other stages of the
a nomothetic, explanation (Tsoukas, 1989). More precisely,
project in the event of dissatisfaction or changing financial
our analytical strategy borrowed heavily from a grounded
circumstance.
theory research perspective (Strauss and Corbin, 1990,
After meeting with a number of ‘singularly unimpressive’
1997). Although we decided against explicitly coding the local consulting firms, a personal friend of John and Niall’s
data, our concern was to identify key themes therein and
suggested that they might explore an offshoring model and
develop them with reference to extant theoretical literatures
introduced them to IndiaSoft, a major Indian software
(see Walsham, 1995). We followed a hermeneutical
vendor with a base in Dublin. After an initial meeting with
approach (Klein and Myers, 1999), iterating constantly
Ajit (the Indian General Manager of IndiaSoft’s Irish
between the data and broader theoretical constructs as we
operation) and Stephen (an Irish Business Development
gradually synthesized and refined, in a grounded manner,
Manager for IndiaSoft), NetTrade were extremely im-
the conceptual perspective described earlier. At all stages in
pressed and, despite some significant apprehension about
the process we were careful to adhere to established canons
their unfamiliarity with this mode of development, decided
of good practice for performing this kind of interpretive
that an offshoring approach was worth exploring further.
analysis (see, especially, Klein and Myers, 1999). As Throughout their initial interactions with IndiaSoft, Net-
the process of relationship development in the project is
Trade were very honest about their anxieties, their
still at quite an early stage, however, we acknowledge that
inexperience, and their need for guidance through the
our perspective at the time of writing is necessarily partial process that lay ahead:
and may be subject to some revision as the research
progresses.
We knew what we wanted but we were not ‘‘deal’’ savvy.
We were not through the RFP process, which was the first
Distance and the production of psychological security in the thing we told everybody. Don’t expect us to tell you, you
NetTrade–IndiaSoft case need to tell us. We didn’t know but we knew we didn’t
NetTrade, a small Irish financial services firm, was know. We did make a big deal about that. (John, joint
established in 2001 by joint CEOs, John and Niall. They CEO, NetTrade)
described themselves as ‘a small unknown company with
the standard start-up mentality’ (John, joint CEO, Net- In addition to stated concerns about their inexperience,
Trade). After four very successful years in operation, they and consequent dependence on the vendor, another major
began to plan for future growth. The key strategic issue issue concerned NetTrade. They were very conscious of the
related to their IT system, which was core to their business. fact that in IndiaSoft’s eyes, they might be viewed as a
Up to now, NetTrade had leased the software from a small small, relatively unimportant, and insignificant Irish
UK-based supplier but the attraction of having their own company in the context of the firm’s overall client portfolio.
bespoke system was always apparent. In addition to the risk They feared that this imbalance could be problematic going
associated with over-reliance on a supplier, two additional forward:
factors influenced their decision to develop their own
bespoke system. First, as the business grew, their require- That was a big deal because the first question (and one
ments for additional system functionality were also that we kept coming back to) was, what happens when
growing. Second, under the current arrangement, they Ford or GM or whoever calls, will we get screwed? y it is
owned the license for this system but not the code. engrained in us, people will value you less because you
Consequently, they felt that a bespoke trading system are smaller. (John, joint CEO, NetTrade)
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
238

As is evident in our discussion below, the Indian firm which this sense of security was produced, enhanced,
went to considerable lengths to address these fears, thereby undermined, and reestablished over time.
laying the foundations for a successful relationship that Following Giddens, we suggest that a key source of
developed over the 2005/2007 period under study. In late anxiety in the offshoring project was the difficulty in
December 2005, and in line with the ‘bite-sized chunks’ establishing trust in the expert systems of technical and
philosophy of the firm, an agreement was reached that professional knowledge upon which IndiaSoft drew (i.e. to
IndiaSoft would be engaged to do an initial requirement provide ‘guarantees’ with respect to the ‘correctness’ of the
specifications and scoping exercise. NetTrade were extre- technological solution that would be delivered across
mely satisfied with the resulting document and decided to distanciated time–space (from India to Ireland)). Of critical
contract with the Indians for delivery of the system. importance here, then, was the manner in which this
abstract system was ‘re-embedded’ in the concrete context
Key events over this time period include: of the NetTrade–IndiaSoft relationship.8
We argue that within the timeframe outlined above, two
December 2005: First meeting with IndiaSoft and sign- distinctive, yet overlapping and mutually constitutive,
ing of the initial agreement for require- phases are discernible. In the Courtship phase the emphasis
ments specification. was on establishing a sense of trust in IndiaSoft as the
January 2006: First visit by John (joint CEO, Net- suitor of choice, thus allowing NetTrade to bracket the
Trade) and Paul (Head of Finance) to associated risks and comfortably proceed with the project.9
IndiaSoft’s development center in In- In the Cohabitation phase a new emphasis emerged, which
diaCity, India to commence the re- focused on the joint construction of a stable collaborative
quirements gathering and scoping order. In what follows, we examine and compare the social
process. practices that underpinned these important processes.
March 2006: Representatives from IndiaCity visit
Dublin to complete requirements gath- Stage 1: Courtship – establishing trust in IndiaSoft
ering. With respect to becoming comfortable with the notion of an
April 2006: Functional specification completed and offshoring arrangement, John identified three different
negotiations take place around the components with which he and his colleagues at NetTrade
signing of the contract for the devel- needed to reconcile themselves: the generalized offshoring
opment work. Work commences. model; the idea of offshoring to India specifically; and
IndiaSoft as the vendor of choice. The fact that John had
August/ John (joint CEO, NetTrade) and Deborah only vaguely heard of software offshoring prior to the initial
September 2006: (Head of IT) visit IndiaCity to view suggestion by a friend in August 2005 illustrates the
prototypes. distance he had to travel before committing to this route:
Issues around live data feed require-
ments surface. To me now it seems like an easy decision. But then I knew
December 2006: Paul (Head of Finance) and Deborah very little about the whole outsourcing areay. it was a
(Head of IT) visit IndiaCity to monitor real dark place that we were trying to figure outyI asked
progress. myself whether this made sense, how did it work? Were
NetTrade receive invoice for cost over- we just looking for a cheap option? Were we crazy? (John,
runs. Joint CEO, NetTrade)
January 2007: New IndiaSoft Business Relationship
Manager (BRM) (Ajay) joins the pro- The initial sense of security that created the impetus to
ject. explore the offshoring model and aligning with IndiaSoft
Representatives from IndiaSoft visit specifically was based mainly on established trust relations,
Dublin to ensure smooth delivery. that is, process-based trust. Both direct and indirect forms
Installation difficulties at NetTrade. of such trust were apparent. Direct forms are observed in
the case of recommendations of friends and friends of
These events will be returned to in the subsequent friends. John and Niall approached IndiaSoft in the first
analysis. place on the recommendation of a close personal friend
One of the notable aspects of this case is that the offshore with experience of the IT industry. Furthermore, and
development project, for the most part, ran relatively perhaps more importantly, on approaching a very senior
smoothly and was not beset by any major crises. This is not manager in a large global IT consulting firm, who was a
to say that frustrations and anxieties were not encountered friend of a fellow NetTrade board member, for advice on
along the way, but these were addressed and repaired in a the subject, they received a ‘big thumbs up’ with respect to
relatively calm and mature manner. Here we argue that a the offshoring model and IndiaSoft’s capability in the area.
key factor in understanding this smooth running of the A final example was seen in April 2006, when the two firms
project was the way in which trust was produced and entered into negotiations around the contract. Niall talked
sustained over time. The careful cultivation of a sense of about how reassured he was by the minimalist nature of
psychological security, although costly and resource IndiaSoft’s contract:
intensive, played a key role in the success of the project.
Here, we draw on some of the theories of trust introduced I am still surprised by their template contract that they
earlier, in an attempt to trace some of the mechanisms by had for us in terms of how short it was. I was totally taken
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
239

aback that, for a company like IndiaSoft, it was not more A number of qualities seemed to set IndiaSoft apart from
comprehensive and did not cover more areas. Even from the other software firms that they had approached. First,
their point of view, I thought there would be more there was the overall sense of integrity that was largely born
protections in there for themselves. Even perceiving it from a sense of value congruity with NetTrade. Of crucial
like that was quite reassuring – they were obviously not importance here was NetTrade’s conception of their own
out to screw anybody. (Niall, Joint CEO, NetTrade) values and sense of identity, which had been the subject of
lively ongoing reflection and discussion since the inception
The initial awareness of the offshoring possibility was of the company. In particular, a set of five core values had
followed by the commencement of what John described as a been agreed upon and, perhaps unusually for a financial
‘demystification process,’ where he began to notice and services company, two of the principal ones were ‘humility’
actively seek out articles about outsourcing in, what he and ‘basic honesty.’ The former emphasized the importance
considered, trusted sources such as The Economist. The of a low-key, unfussy, and modest style, while the latter
reputational effects (indirect process-based trust) of such emphasized the value of integrity in dealing with people. In
sources, supplemented by testimonies from IndiaSoft this respect, then, IndiaSoft were viewed as fellow travelers
reference clients, contributed to a growing sense of comfort with whom NetTrade’s guiding values were very well
with the overall offshoring model. aligned and their humility and integrity seemed to indicate
A more firm-specific, institutional basis for establishing a kind of dependability:
trust and creating a sense of security was drawn on as
IndiaSoft outlined and explained their CMM Level 5 Bottom line – It was their humility. It is a value that we
certification in their presentations to NetTrade. very genuinely hold and when we are selecting people to
The first major access point to the IndiaSoft offshoring work with y if they don’t have it and are more on the
model came with the initial face to face meeting with Ajit arrogant side, they are not for here. IndiaSoft definitely
and Stephen in NetTrade’s office in Dublin. This meeting have it. (Niall, Joint CEO, NetTrade)
appears to have been very consequential for the develop-
ment of the relationship, as John and Niall were left feeling This apparent value congruity generated a kind of
extremely impressed and reassured. characteristic-based trust that both John and Niall general-
ized to, what they saw as, the distinct cultural affinities
I remember vividly the meeting with Ajit and Stephen between Ireland and India. Memorably, John subsequently
and I just found them incredibly impressive – very, very remarked how the Indian people he interacted with at the
impressive – particularly Ajit. From a cultural point of outset, and throughout the project, reminded him of Irish
view, I am used to Anglo-Saxon meetings; everyone is software engineers he had worked with on graduating with
fairly machismo and everybody makes themselves a computer science degree, nearly 20 years before. They
heardy he was a GM and everyone around the table were, he claimed, ‘modest, hard working, and hungry’
knew that he was very senior and he said almost nothing. before the more recent Irish economic success enjoyed on
And then at the end he said four or five sentences and the back of the so-called ‘Celtic Tiger’ made them ‘too
they were so pithy and soy I personally like people like complacent and brash.’ In IndiaSoft, then, John and Niall
that that do not talk too much. He finished it off, saw values that they could identify with, and were trying to
summarized the meeting, and he was very impressive. foster in their own company: values that they nostalgically
(Niall, Joint CEO, NetTrade) associated with an apparently bygone ‘golden’ age of Irish
economic development.10
They wowed us in terms of their apparent ability to The care and attentiveness that they received from
deliver quality and this on top of what appears to be an IndiaSoft came as a very pleasant surprise and was greatly
unbeatable proposition from a cost perspective. (John, welcomed by NetTrade. John and Niall were both greatly
Joint CEO, NetTrade) impressed by IndiaSoft’s thoroughness in responding to
points and requests made by NetTrade:
Reflecting on their early meetings when representatives
presented information about IndiaSoft and the offshoring they responded to everything on our list – they wanted
models employed, John was clearly impressed by their us; they loved us and we like being lovedy they seemed
apparent ability. He described the presentations as to want our business – they showed an interest in our
‘extremely slick and professional’ and he was struck by business in a way that others didn’ty When you meet
their ‘systematic approach to software development.’ This somebody that you are impressed with, it is just a good
professional manner and slickness was reinforced by experience and you want to proceedy we (had) a
references to IndiaSoft’s CMM Level 5 certification (even connection here and we like(d ) themy.we were
though neither John nor Niall had previously heard of constantly getting good vibes. (John, Joint CEO, NetTrade)
CMM, they were able to find out more about it
subsequently). Interestingly, however, it was not the IndiaSoft had such a huge capacity to listen and respond
apparent professional ability of the IndiaSoft representa- to this – it is absolutely brilliant, they are great listeners.
tives that made the greatest impression; rather, it was (Niall, Joint CEO, NetTrade)
their general demeanor and their care and attentiveness,
which was to become a recurring feature of subsequent While this level of attentiveness was quite unexpected on
interactions. the basis of their dealings with other agencies and
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
240

companies in Ireland (‘it is engrained in us, people will systems and processes, it was clear that increasing levels of
value you less because you are smaller’ John), it was trust were developed only tentatively over time. In other
instrumental in allaying one of their key fears: that of their words, the mechanisms for developing trust discussed
project being so small and insignificant that it would ‘get above were not confined to one identifiable period of the
lost’ within a big organization such as IndiaSoft. This project, but extended throughout the duration of the
apparent benevolence on the part of IndiaSoft toward relationship. As the project progressed, process-based trust
NetTrade was reinforced by John’s relationship with again came to the fore as NetTrade became more
Stephen who, importantly, was based in IndiaSoft’s Dublin comfortable with the IndiaSoft offshore development
office (located only a short distance from NetTrade’s model. Key to this was the quality of the intermediary
office). Stephen ‘did a good job initially in selling IndiaSoft deliverables and, more importantly, the deepening personal
as IndiaSoft Ireland’ and so reassuring John that whatever relationships between key actors in both companies. In
fears he might have of NetTrade ‘getting lost’ in IndiaSoft, particular, these relationships gave the project a new
that there was no way this would happen in IndiaSoft Ireland robustness, which allowed issues to be dealt with in a more
(another relatively small, but growing, Irish company), or open and direct manner.12
indeed in the IndiaCity development center (again a small, In the Cohabitation phase, however, a new emphasis
but growing, business entity). Here again we see an example emerged: that of constructing a stable collaborative order.
of IndiaSoft ‘mirroring’ NetTrade and, in so doing, While a good basis for trust had been developed in the
strengthening the sense of trust and mutual affiliation. earlier period, both parties now had to collectively establish
IndiaSoft’s care and attentiveness was also manifested in communal social practices to enable them to work closely
the numerous ways in which they appeared to go the extra together. Of critical importance here, from the point of view
mile to accommodate NetTrade’s needs, thereby making of producing trust, was the stability and predictability that
them feel valued as a client. Key events here included such practices would confer on the project interactions. Once
Stephen making a trip to the delivery center in IndiaCity to activities around the project commenced, incongruent
coincide with John and Paul’s initial visit there; the communication practices quickly surfaced and presented a
attentiveness and personal hospitality afforded by Pratima number of challenges. The first evidence of tension in the
(the head of the IndiaCity delivery center) to John and his relationship emerged during John’s initial visit to India.
colleagues during his visits to India (the fact that someone Together with his Head of Finance (Paul), John spent 8 days
so senior was taking an interest in the project made a very in intensive meetings meticulously explaining their require-
big impression on John); the fact that IndiaSoft appeared to ments to the Indians. He became immediately concerned
be very sensitive to NetTrade’s anxieties about the project that the process lacked direction and input from the Indians:
and did everything they could to accommodate their ‘bite-
size chunks’ risk management philosophy (for instance the I’m concerned that there is not a strong leader outlining
fact that they agreed to break the total cost of the system the process and stepping us confidently through it. (John,
into four manageable staged payments was seen as a very Joint CEO, NetTrade)
significant gesture by NetTrade and provided some
welcome relief from the financial burden that they were One negative aspect would be that they seem a bit too
undertaking to develop the system); and the fact that they accommodating. I would prefer if they sometimes
went to great lengths to take the unusual step of providing disagreed and instead gave their views as alternatives.
ongoing remote access to a working prototype of the system (Paul, personal journal)
at John’s behest.
One interesting observation about this process of
On several occasions John repeatedly asked the then
security building was that the steps taken to ease
project sponsor (Suran) to send him copies of the Indian
NetTrade’s anxiety appeared to appeal to both cognitive
team’s rough notes from the requirements sessions. He
and emotional elements of John and Niall’s personalities.
wanted these to ensure that the Indians understood
The ‘bite-sized chunks’ approach, for example, was a very
NetTrade’s needs around the new system. This was new
rational and sensible strategy for risk management. By
to IndiaSoft – they had never received such a request from a
contrast, however, both John and Niall spoke often about
client and they were reluctant to comply, preferring instead
the (much less tangible) ‘good vibes’ that they constantly
to complete a draft of the requirements document that
got from IndiaSoft and the important role that this played might then be reviewed by John:13
in their decision making. In this regard, we are reminded of
Giddens’ assertion that trust is always blind and that it
involves an emotional, as opposed to a cognitive, commit- y sometimes we wanted things that were not planned
for as a deliverable and I don’t think their processes allow
ment to a given set of outcomes. Dealing with risk in this
for ityand this was frustrating because they did not tell
case, then, involved both trust (an emotional commitment)
and calculation (more of a cognitive sense of assurance11). us this explicitlyywe were not getting a straight answer.
(John, personal journal)

Stage 2: Cohabitation – constructing a stable collaborative At later stages, further frustrations were evident around
order the directness of communication:
Despite the excellent and reassuring early impressions as to
the ability, benevolence, and integrity of the IndiaSoft I remember I got into a very bitter discussion around the
representatives, and the reliability of their software delivery issue of volume testing. (y) We asked what they planned
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
241

to do around volume testing (y) he would not answer the We provided this for them – they could not read ityso
question (y) even if the answer was ‘‘we don’t know’’ – we had to go back to the provider and figure it out yit
that would have been an honest answer – but getting the was very difficult dealing with the provider. For us (i.e.
other response was annoying. (John, Joint CEO, NetTrade) Deborah), being in the middle was actually the most
frustrating part of it allyand I could see the guys getting
These communication deficits were even acknowledged on frustratedy but it was a shared problem. (John, joint
the Indian side as one informant confided how sometimes CEO, NetTrade)
‘things tend to go from green to red with no amber light!’
Despite weekly status meetings and ongoing contact, John It resulted in significant upheaval and delays in the
felt that ‘there are big silences in the process,’ and these project and a demand was made by IndiaSoft for an
silences made him very uncomfortable.14 A good example of additional payment of h80,000.15 NetTrade were very
this was seen toward the end of 2006 when a dispute ensued aggrieved about the manner in which this communication
about the acquisition of the data feed to test the software. was managed and, on this occasion, responded angrily and
After an initial delay around selecting and reaching an forcefully:
agreement with a data provider that would feed the live data
into Dublin, NetTrade were surprised to learn that IndiaSoft I was lividy. (John, joint CEO, NetTrade)
also needed a live feed link into the development site in India:
It was extremely disappointing from a project manage-
There was one deliverable from the NetTrade site – the live
ment point of view. We were very genuinely angry, and
data feed. There was a delay on NetTrade’s side as to the
justifiably angry with Stephen. The fact that it was totally
providery For us to proceed with our work, we needed
out of the blue was just crazy and we communicated it to
this basic information. The delay had an impact. This was
them hundreds of times. It was bad project management
discussed at status meetings. ‘The dash board/status report
on their side and this should not have got through their
went to Dublin and there was a traffic light on the report in
controls. (Niall, joint CEO, NetTrade)
terms of the effort, costs, schedule etc. We communicated it
explicitly enough but John thought we did not commu-
nicate it correctly. He realised that this would have a This invoice was delivered at a particularly anxious and
schedule impact but said that we were not explicit on the tense time in the project and served to further strain inter-
cost impact. This reflected the lack of project experience on firm relations. However, neither firm was tempted to resort
NetTrade’s side’. (Suresh, Project Sponsor, IndiaSoft) to the terms of the contract, or to refer to minutes of
meetings or status reports in support of their position.
This was later confirmed by Ajay (the new BRM, who Drawing attention to his emotional commitment to his
joined the project in January 2007): relationship, John later explained the precarious nature of
the situation that they found themselves in:
Ahmed must have mentioned it about five times on the
status reports and got no response and when you get no (y) the contract is useless in many respects isn’t it? If
response you tend to ignore it (y) and we should not you are a small contract up against IndiaSoftyits almost
have done this. (Ajay, BRM, IndiaSoft(Irl.)) unimaginable that we will really go down the legal
pathysomehow the contract is not what it’s about. (y)
John notes how this came as a big surprise to NetTrade:
Ajay joined the project and insisted that the issue be
yit wasn’t there earlier in the summer when we were pushed to one side so that full attention could be devoted to
setting up. I kept saying ye are the experts, tell us what the critical task at hand. John was happy with this
you want, tell us how it worksyyou are supposed to have arrangement:
done this many times in many different ways – so guide
us. (John, joint CEO, NetTrade)
Nobody is trying to screw anybody. We are all honour-
able and we will come to an agreement. (John, joint CEO,
John claimed that IndiaSoft had casually alluded to this in
NetTrade)
August 2006, but the issue was hardly raised again. They sent
the Application Programmer Interfaces of potential data
providers assuming that this would enable IndiaSoft to This indicates the important role of the social capital,
proceed with development. It took a few weeks for NetTrade which had been so painstakingly created, and contributed
to sign a contract with a provider and once this was secured, to an extraordinary resilience in inter-firm relations. How-
an additional problem arose – IndiaSoft could not read the ever, despite this resolution, the project was beset by
live data at their development site and considering it out of further problems throughout the month of January:
scope, were reluctant to engage directly with the provider to
find a solution. John notes that this caused a lot of anguish There was an awful lot of tension around the installation.
for NetTrade’s IT manager (Deborah): It has gone from the one day that they predicted to the
three days that we allowed fory.then it was 5 days and
They were always reluctant to do this, which is very now its ten days and we are still not finished. There was a
frustrating because we have no expertise. (John, joint big blame game going ony. (John, Joint CEO, NetTrade)
CEO, NetTrade) Suresh claimed that his people (though our opinion is
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
242

that this was his opinion) were saying that installation requirements gathering process in India, he tactfully
and issues like this was outside scope for themy the decided against raising these issues directly with IndiaSoft
tone was really wrongythe suggestion was that there was at the outset, for fear of being seen to question their
no solutiony. Or at least that he could be part of the professionalism.
solutionyI got angryythat kinda stuff can make you These subtle and very careful forms of signaling were
really annoyedy and I’m goin. ‘your kidding me! We also helpfully used in other contexts. On the advice of
need to get this thing solved, we need to come together. friends, John made it very clear to IndiaSoft at the outset
(John, Joint CEO, NetTrade) that he was keen to inspect the résumés of all staff assigned
to the project. He later confessed that, despite the fact that
John noted how Ajay seemed to be visibly perturbed by he found it difficult to make sense of them, his main
this conversation and he felt that even Suresh realized that intention was to signal to IndiaSoft that he was being very
this was not the correct approach. After this meeting vigilant and watching things closely:
another conference call took place between Stephen,
Suresh, and Ajay, following which the project was judged They sent us CVs. I glanced through them yit was hard
to be back on track: to decipher themy Indian colleges etc. I asked for them
and there was a bit of posturing around wanting to get
We have all hands on deck. And the team in India is good guys etc. We couldn’t really read them, but they
delighted. They want to stop with the politics and get in looked grand. (John, Joint CEO NetTrade)
there and solve problems and they are great. (John, Joint
CEO, NetTrade)
The symbolism associated with making regular trips to
India was also seen as important:
Throughout this Cohabitation phase, we see ongoing
negotiation of appropriate communicative practices, which
proved to be most challenging as it involved difficult We went back over in Decemberyit was really to show
processes of finding mutual accommodations between Irish them that we were taking things seriously and even just to
and Indian cultural norms. This process was complicated enhance the relationshipyto reaffirm it. (Paul, Head of
by the temporal/geographical separation. Moreover, the Finance, NetTrade)
deeply embedded nature of such practices meant that
attempts to alter them required significant skill, as well as ‘Brokering’ was another vital means of facilitating
the balancing of ‘trust, tact and power’ (Giddens, 1990: 82). productive communication while minimizing damage to
In what follows, we explore these micro-political processes the integrity of important relationships. The importance
in more detail, by illustrating how agents attempted to of brokers (or boundary spanners) has been highlighted in
balance trust, tact, and power in the course of their strategic the knowledge management literature. Typically, these are
actions. In so doing, we introduce three concepts that described as individuals who facilitate the sharing of
emerged from our grounded analysis of the data: namely, expertise between groups of people who are separated by
‘tactical signaling,’ ‘brokering,’ and ‘the third man.’ location, hierarchy, or function (Allen and Cohen, 1969;
Ironically, while NetTrade bemoaned the fact that IndiaSoft Tushman, 1977; Wenger, 1998; Pawlowski and Robey, 2004;
were less than direct in some of their modes of commu- Levina, 2005). Much of the emphasis is placed on the
nication, the former often made use of similarly indirect importance of translating/decoding idiosyncratic domain
modes themselves as they tried to shape the project by knowledge. The theoretical perspective that we developed
appropriately balancing trust, tact, and power. earlier would suggest that a broker’s role might extend
The first example of tactical signaling was seen during beyond translating/communicating, embracing an enlarged
the first visit to the delivery center. John recalls how less remit of reassurance and anxiety reduction.
than impressed he was by the project manager (Sumeet) Stephen, who had cultivated very strong relationships
who had been assigned to the project. In contrast, he was with people at NetTrade (especially John) and at the
very impressed and enthusiastic about Sunil, the younger IndiaCity delivery center, was a particularly good example
functional requirements person. This played heavily on of a broker. John described Stephen as someone who
John’s mind throughout his stay but he found it difficult to ‘appeared to have a foot in both camps’ and was very
raise the point directly with IndiaSoft. In an effort to subtly receptive to, and understanding of, any issues raised by
deliver this unpalatable message, he opted for a different NetTrade. The fact that Stephen was Irish and of a similar
strategy: age and background to John meant that both parties found
it very easy to communicate with one another. As the
The other guy was the yes, yes, yes, he hadn’t a clue. I project progressed, Stephen was replaced by Ajay, John
made a point of praising Sunil and did not say anything found himself not only increasingly using Stephen (and
about the other guy so he disappeared from the team, then Ajay) to broker important issues that needed to be
which was a good thing. (John, Joint CEO, NetTrade) communicated to India but also as a vehicle through
which frustrations could be vented. For example, John
The message was understood, it seems, as Sumeet was talked about ‘regularly thrashing Suresh to Stephen (and
promptly moved from the project. On the other hand, even Ajay)yand I (he) had a sympathetic audience.’
though John privately admitted to being a little concerned Stephen appeared to align with NetTrade’s perspective on
about the extent to which he seemed to be driving the initial various issues. This was nicely articulated by Niall when he
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
243

reflected on a meeting that was held to iron out the penalty time together discussing the system and broader business
fee imposed on the firm in December 2006: and cultural issues.
The formation of these kinds of strong relationships,
(y) it was very interesting from a cultural perspective however, did not come without a cost. Sunil sometimes
watching Stephen and Ajay – both representing the same found that his relationship with John put him in a difficult
company but they were not singing from the same position with respect to his loyalties within the project. For
hymn sheet (y) Stephen ended up being a little more on instance, while Sunil was onsite in Dublin during the
our side and Ajay was very much protecting IndiaSoft – deployment phase in January 2007, he was inadvertently
his heart and mind were back in IndiaCity whereas caught in a minor dispute over the release of source code to
Stephen was looking at it from our perspective (y) NetTrade. John was keen to have access to the code so that
Stephen ended up agreeing with us on almost everything his technical staff could inspect it and familiarize them-
and he probably should not have. (Niall, joint CEO, selves with it. Unbeknown to him, however, Suresh (the
NetTrade) project sponsor in India) had explicitly instructed Sunil not
to release the code, without publicly making this known. At
one particular tense project meeting in Dublin when John
This perception of having like-minded allies on the kept asking Sunil for the code, Sunil had to ask John for a
Indian side served to allay concerns and anxieties and private word outside of the meeting, whereupon he
uphold NetTrade’s position on various issues that arose. disclosed that Suresh had vetoed this.
For example, as noted earlier, John was concerned about John seemed very sensitive to the difficulties that Sunil
the silences in the process at various junctures – at a later faced and even described an incident where he used a
stage, he was very frustrated at how NetTrade were being combination of signaling and brokering to deliver a
blamed for delays in the project. Stephen’s appreciation of message to India. In the course of the dispute over the
NetTrade’s viewpoint and position seemed to reassure John implications of the data feed delay, John had complained
that his anxieties and frustrations with the Indian firm were that Suresh was not adequately communicating problems in
well founded. In turn, this seemed to instill confidence advance of them escalating. Following this criticism, John
around his judgment: received an email from Suresh that went into great detail
about ongoing issues. In full knowledge that Sunil was
Even Stephen would say that they need to do more to seated close by, John loudly and angrily complained about
speak up. the fact that Suresh had suddenly ‘gone from giving no
information about what’s going on to giving way too much’
If you think about, what they are saying here is that their in the hope that his annoyance would be relayed back to
development environment is dependent on the successful India by Sunil.
setting up of the UAT and production environment in A further tactic that was used by NetTrade, often
order for them to finish the developmentyand I’m inadvertently, might be termed the ‘third man.’ This
goingythat’s just daft! y and Stephen agreed. involved introducing a third party who did not have a
close relationship with IndiaSoft, and who could conse-
quently be more ruthless in their dealings with them. Two
As noted earlier, Ajay’s introduction to the project in brief examples can be cited to illustrate this. First, during
January 2007 immediately served to diffuse tensions and re- the contract negotiations between John and IndiaSoft in
instill a sense of security about relations going forward. April 2006, John made regular reference to the importance
John recalled how Ajay told them that Stephen would sort of reaching an agreement that would be acceptable to
the dispute out at a later stage. He told them that he would NetTrade’s board. Indeed, in the end, one of the major
not ‘get into that 80,000 thing’ but that he would ‘make it reasons IndiaSoft reduced their price substantially was on
his business to flag things well in advance going forward.’ the basis that if it exceeded a certain critical amount the
Niall recalled: ‘When Ajay came, he said he would tell us board had decreed that the contract should be submitted to
everything (y) and (our meetings) are very frank.’ public tender:
Consequently, John spoke about a renewed sense of
optimism around the project. We went back to IndiaSoft that the non executive board
The other key broker between NetTrade and IndiaSoft was a weight upon which everything hungywhat would
was Sunil (an Indian). From the very early stages of the board think?y it was a useful entityy we probably over
project Sunil and John began to form a very good played ity. (John, joint CEO, NetTrade)
relationship. As noted above, John was initially very
impressed by Sunil’s ability and by the extent of his
domain knowledge. Moreover, he appreciated Sunil’s style Second, NetTrade hired a specialist software firm
of interaction, which was much less diffident than some of (TestCo) in September 2006 to help them develop their
the other IndiaSoft team members: ‘Sunil was like a dog user acceptance testing plan. One of the TestCo consultants
with a bone; he was constantly pursuing problems and issues sat in on a user acceptance testing meeting at which
and in the end he knows much more about our systems than we were present in January 2007 and proceeded to
we do ourselves!’ The two months that Sunil spent in Dublin aggressively question Sunil about the way IndiaSoft were
during the onsite requirements gathering phase facilitated prioritizing problem reports in a manner that John or his
the blossoming of this relationship with John. The two colleagues would have found difficult. At the conclusion
found that they had a lot in common and spent significant of this meeting (which was attended by one of the
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
244

researchers), Sunil looked visibly upset at the tenor and device’) and of its importance in the context of interpretive
tone of the questioning, despite the fact that he appeared to studies in the IS field. Specifically, we have drawn on the
handle the substantive issues raised very competently. work of a diverse range of scholars on trust (in particular
Without a ‘third man’ this kind of robust interaction Anthony Giddens, Lynne Zucker, and Barbara Misztal) to
would have been almost impossible at this stage of the synthesize a rich and novel conceptual lens, with a view to
project. The imperatives of trust and tact would simply not making sense of our experiences in the field.
have allowed it. This synthesized perspective provided us with the means
to explore the process by which psychological security was
produced within the context of, what was for NetTrade, a
Discussion and conclusions very risky and anxiety provoking journey into the
In this paper we have explored the notion of anxiety and its unknown. The distinctiveness of the conceptual lens
management in the context of a model of offshore software developed here offers the possibility of opening up a
development that is becoming increasingly common in the number of novel theoretical directions for research on
contemporary world. In particular, we have focused on the software offshoring. In particular, the emphasis on anxiety
important question of how psychological security is and its management offers fresh perspective on the
produced in circumstances that may involve high risk challenges associated with managing such global work
and a very opaque development process that is inherently arrangements. Not only does it draw attention to important
difficult to monitor, not least because of issues associated mechanisms by which trust as psychological security is
with geographical and cultural separation. By so doing, we produced and anxiety contained, but it illustrates how these
draw attention to the, often invisible, ‘relationship work’ processes become especially problematic in an offshore
that is required to develop and sustain the crucial social model where interaction routinely spans temporal–geo-
infrastructure that underpins project relationships, lending graphical and cultural distance. We argued that the
them an important robustness. development of confidence involves both cognitive/calcu-
The paper makes empirical and conceptual contribu- lative (i.e. the adoption of rational strategies for reducing
tions. With respect to the former, the case study presented risk exposure) and emotional (trust) components that
is particularly interesting for a number of reasons. First, the enabled a (partial) bracketing of risk and associated
existence of strong personal relationships between mem- anxiety, thus facilitating productive engagement with the
bers of the research team and some of the key players project at hand. Our emphasis on the emotional dimension
involved in the project facilitated an unusually high level of of organizational life, inspired by Anthony Giddens’
access to the research site. This provided a rare window on distinctive approach to understanding trust and its role in
the intimate workings of key social processes as they the contemporary world, constitutes a significant departure
unfolded over time, allowing us to explore the ‘y ebbs and from much of the mainstream literature in the manage-
flows of the evolution of relationships’ (Lacity and ment/organization studies area, thus opening up new
Willcocks, 2001: 290). In the context of an accepted dearth research vistas. Specifically, it provides an enlarged, non-
of published in-depth, idiographic accounts of the devel- cognitivist, perspective on the supposed role of, inter alia,
opment and dynamics of offshoring relationships (Sahay inter-organizational routines (Zollo et al., 2002) and
et al., 2003), then, the study provides a basis for a relatively brokers/boundary spanners (Levina, 2005), which indicates
nuanced and granular understanding of such activities. A that these are more than mere mechanisms for facilitating
further interesting feature of the study is the Ireland–India information exchange/sharing or communication; their
connection. Whereas other studies have focused on global importance might also be due to the manner in which they
software alliances spanning such locations as USA–India offer reassurance and help produce a sense of psychological
(Kumar and Willcocks, 1996), USA–Caribbean (Abbott, security. Furthermore, the perspective on trust developed
2004), Canada–India (Sahay, 2003), UK–India (Nicholson here broadens the scope of much of the extant literature on
and Sahay, 2001, 2004), Norway–Russia (Imsland and the subject by explicitly considering impersonal forms of
Sahay, 2005), etc., we know of no study that has specifically trust (system trust), while linking these with forms of
explored cultural aspects of an Ireland–India relationship. personal trust.
Finally, the study offers an unusual example of offshoring We drew on the synthesized theoretical lens to explore
practice, in that it involves a very small and young firm that two distinctive kinds of trust production that appeared
has entered into a sourcing relationship with a large and especially important in the NetTrade–IndiaSoft case.
well-established vendor of IT development services (see First, there was the establishment of trust by NetTrade in
Nicholson and Carmel, 2003). IndiaSoft as a suitable offshoring partner and, second, there
From a conceptual point of view the paper attempts to was trust as ‘habitus’ – the struggle to establish a stable,
introduce a language that enables us to problematize and predictable, and productive collaborative order (consisting
shed light on some crucial, yet intangible and often of a set of well-understood and mutually acceptable social
overlooked, aspects of offshoring practice. As such, the practices, especially communicative practices).
emphasis has not been on ‘theory generation,’ where this In the course of our analysis of the case, we attempted to
enterprise is conceived of as the development or refinement illustrate how these different modes of trust production
of a set of testable propositions. Rather, our aim here has operated and complemented one another. In so doing, we
been to synthesize, in a grounded manner, a sophisticated considered two distinctive phases of the relationship to date
theoretical lens that illuminates important features of the (Courtship and Cohabitation), where one mode appeared to
dynamics of offshoring relationships (see Walsham (1995) take precedence over the other. While these kinds of
for a discussion of this notion of theory as a ‘sensitizing distinctive phases have been used as analytical devices
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
245

elsewhere in the outsourcing literature (e.g. Cartwright and This last quotation indicates the extent of the social
Cooper, 1993; Klepper, 1995; McFarlan and Nolan, 1995; capital that had been developed between these two firms in
Lacity and Willcocks, 2001), the work presented here such a short period of time; John felt obligated to act
attempts to go beyond mere categorization to provide a honorably in relation to IndiaSoft and, perhaps more
more in-depth analysis of the key functions of each stage importantly, he was confident that IndiaSoft would behave
and the practices required to support them (cf. Ring and honorably toward him.
Van de Ven, 1994; Kern, 1997; Willcocks and Kern, 1998). Finally, and to extend this theme, there is evidence to
Furthermore, we were careful to point out that these were suggest that this NetTrade–IndiaSoft relationship may run
not strictly linear sequential stages. The trust generating for some time yet. The current plans to extend and deepen
practices that predominated in each stage were not absent the relationship might suggest the transition to a new more
in the other; it was merely a question of emphasis; both sets stable phase (Marriage) marked by an explicit mutual
of concerns endure throughout the lifetime of a project and, commitment to a longer term, ongoing strategic relation-
indeed, are mutually constitutive, but at different points the ship (thus leveraging the social capital and mutual under-
emphasis tends to be on one over the other. standing that had been so painstakingly built). Should this
In the Courtship phase, in the early part of the come to pass, it will be interesting to compare and contrast
relationship, the emphasis was primarily on ‘manifest the challenges associated with this phase to subsequent
displays of trustworthiness’ at key meetings/interactions ones, and to explore the practices required to sustain and
(i.e. access points), on reputational effects (i.e. indirect enhance the relationship for mutual benefit.
forms of process-based trust), and on apparent We hope that practitioners may find value in the depth
value congruence between Indian and Irish graduates and richness of the case material presented. By addressing
(characteristic-based trust). Of critical importance was the the dearth of detailed accounts of the dynamics of such
establishment of trust in the reliability of the expert relationships in the IS literature to date (Sahay et al., 2003),
system of knowledge/practices employed by IndiaSoft, we aim to contribute to the formation of enhanced levels of
which was grounded in personal interactions with IndiaSoft practitioner expertise in the area of software offshoring
representatives at access points to the system. With a (Flyvbjerg, 2001; Dreyfus and Dreyfus, 2005). In keeping
view to enlarging Giddens’ perspective, we focused on with our philosophy of the distinctive strengths of
perceptions of ability, integrity, and benevolence as interpretive, idiographic case study research (see Flyvbjerg,
constitutive features of personal trust. With respect to the 2006), we have resisted the temptation to attempt to
latter quality specifically, a key feature appeared to be distill the richness of the empirical material presented to a
the extraordinary care and attentiveness lavished upon small number of highly generalized prescriptions for
NetTrade by IndiaSoft. practice. Furthermore, we hope that the theoretical perspec-
In the Cohabitation phase, the emphasis shifted to other tive that has guided our analysis will provide managers with a
kinds of strategic action that involved the balancing of trust, productive way of seeing, and engaging with, the world of
tact, and power in the construction of a stable collaborative practice.
order (trust as ‘habitus’). Here, we identified a number of
micro-political tactics that were employed in attempts to
establish mutually acceptable working practices, especially Notes
communicative practices. These were essentially indirect and 1 For examples of other interesting work that places issues of
tactful ways of dealing with important issues so as not to anxiety and insecurity center stage, see Miller and O’Leary
cause offence, and they included ‘signaling,’ ‘brokering,’ and (1987), Knights (1990, 1992), Bloomfield and Coombs (1992),
‘the third man.’ The aim here was to draw attention to the Knights and Murray (1994), Sturdy (1997), and Knights and
complex micro-politics of trust, in the context of the Willmott (1999).
development of secure, stable, and predictable practices that 2 Of course Giddens was himself deeply influenced by the
would keep anxiety at bay. psychoanalytic tradition, in particular by the work of Sigmund
A striking feature of this analysis is the amount of effort, Freud, Erik Erikson (1950), and RD Laing (1971).
care, and attentiveness that was required to establish 3 By highlighting the importance of trust, however, we do not
productive social relations, notwithstanding the apparent wish to downplay that of more conventional means of control as
value congruity of the two firms involved. These efforts, a risk management strategy. Following Das and Teng (1998), we
however, contributed to the creation of important social see trust and control as playing mutually supplementary roles in
capital that gave the project a new robustness that sustained the production of an overall sense of confidence. As Hart (1988)
it during difficult periods. The dispute concerning the data felicitously puts it, trust exists ‘at the interstices of control’.
feed was perhaps the most significant problem that beset 4 Giddens uses the term ‘abstract systems’ to collectively refer to two
project relations in the process to date, but what was distinct types of disembedding mechanism that allow social
remarkable was the manner in which the potential damage interactions/relations to be ‘lifted out’ of the particularities of specific
was managed and repaired. Neither parties referred back to locales and restructured across indefinite spans of time–space:
contracts or written records but, rather, decided to push the
issue to one side, to proceed with the project, and to revisit K Symbolic tokens: These refer to media of exchange that have
the issue at some future point. standard value, and thus are interchangeable across a
plurality of contexts. Money is an important example. It
Nobody is trying to screw anybody. We are all honour- can be passed around regardless of the specific characteristic
able and we will come to an agreement. (John, joint CEO, of the individuals or groups that handle it at any particular
NetTrade) juncture.
Anxiety and psychological security in offshoring relationships S Kelly and C Noonan
246

K Expert systems: These bracket time and space by deploying 10 Whether this was an ‘accurate’ impression of IndiaSoft or not
modes of technical knowledge that have validity indepen- is, perhaps, beside the point. While we are conscious of the
dent of the practitioners and clients who make use of them danger of resorting to cultural stereotypes here, the key issue is
(e.g. the system of Western medical knowledge). Thus, like that John formed and sustained this impression of them, and
symbolic tokens, they provide ‘guarantees’ of expectations acted on that basis. One point worth considering in this respect
across distanciated time–space. is the extent to which IndiaSoft staff were ‘mirroring’ (perhaps
unconsciously) particular traits of their client. It would be
5 These conventional approaches implicitly adopt a ‘cognitivist’ interesting, for instance, to observe how their ‘presentation of
perspective (Chaiklin and Lave, 1996; Dreyfus and Dreyfus, self’ (Goffman, 1956) would differ with a very different kind of
2005; Kelly, 2005) that has been roundly criticized by those who client. On the evidence of our interaction with IndiaSoft staff,
would advocate a more holistic approach to understanding the however, both in Ireland and in India, we could also clearly
human subject – that is, one that avoids a dualism between the recognize the kind of traits to which John drew attention, and
cognitive and the emotional (cf. Ciborra, 2006; McGrath, 2006). broader social values appear to be a very important feature of
Indeed, a key shortcoming of the notion of ‘calculative trust’ is life in the firm. Furthermore, there are some good bases for
that it fails to adequately discriminate between trusting making cultural comparisons between Ireland and India. Not
behavior and calculated risk taking. only do both countries share a similar British colonial history
6 Zollo et al. (2002) have also drawn attention to the importance (indeed India adopted a modified version of the Irish
of stable routines in facilitating productive inter-organizational constitution post-independence and even a modified version
relations. Specifically, they draw on evolutionary economics to of the Irish national flag!) and an emphasis on familial and
argue that such routines facilitate ‘y information gathering, community ties, but comparisons might also be drawn between
communication, decision-making, conflict resolution, and the recent modes of economic development based on engineering
overall governance of the collaborative process’ (p. 709). and high technology (see, for example, Foley and O’Connor,
Moreover, they draw an explicit distinction between the 2004). Indeed, as John Stuart Mill once pointed out, ‘[t]hose
development of inter-organizational routines and trust, because Englishmen who know something about India, are even now
they view trust rather narrowly as an ‘interpersonal’ (p. 709) those who understand Ireland best’ (Cook, 1993: 53).
phenomenon and as the result of ‘y deliberative efforts to 11 Of course, we would be sympathetic to the general idea that
assess the likelihood of opportunistic behaviour’ (p. 709). While even ostensibly rational/cognitive exercises are often enacted
we would agree with these authors’ conclusions that inter- in ritualistic ways as a means of facilitating a more emotional
organizational routines are extremely important, we would type of commitment. This illustrates the difficulties associated
argue that the view of trust synthesized here is more insightful, with making a clean separation between the ‘cognitive’ and the
in that it does not confine the importance of such routines to ‘emotional’.
mere ‘information gathering’ and ‘communication’. Rather, 12 At the same time, however, the trust also had a brittle quality.
‘trust as habitus’ also emphasizes the important anxiety In September 2006, one of the researchers met an Irish
reducing functions of such routines. software developer who had worked with IndiaSoft in India for
7 Although Zucker’s emphasis on information and deliberation a short, and unhappy, period. His experience of working with
clearly has cognitivist leanings that would sit uncomfortably IndiaSoft was not very positive, and was dramatically at odds
with the perspective synthesized here (i.e. we would view with NetTrade’s impression of them. John, on hearing this
interaction as consisting of much more than mere information story, became extremely worried about the project, and for a
exchange), we nonetheless believe that the broad mechanisms short time began to seriously question his own judgments.
that she identifies are a very helpful supplement. 13 This kind of interaction became a familiar theme in the project
8 More precisely, building on the notion that any such abstract and might be understood as involving the negotiation of the
system will be interpretively flexible and may be enacted or boundary between frontstage and backstage (Goffman, 1956).
embedded differently in different contexts, we argue that the Such was John’s anxiety that he was always trying to ‘peep
key issue at stake is the expert system-in-use (i.e. the specific backstage’. In his view, however, IndiaSoft did not want to
way in which such abstract principles are instantiated in the show him their ‘dirty laundry’. The fact that trust rests on a
practices that constitute this project). The fact that systems presentational base, where frontstage impression management
always have to be reembedded underscores the importance is vital, would suggest that IndiaSoft’s reluctance to accede to
of making the connection between forms of system trust John’s wishes was well founded.
and personal trust, between the rule and its application 14 Cramton (2001) notes how physical separation and reliance on
(Wittgenstein, 1953). It is not merely trust in ‘abstract princi- communications technologies can exacerbate uncertainty
ples’ that needs to be reestablished at access points but, also, when trying to interpret the meaning of silence.
trust in the manner in which these principles are appropriated 15 Demonstrating their irritation over the issue, the h80,000 bill
and applied. that they received was always referred to as a ‘penalty’ by
9 We could, indeed, countenance a further stage immediately prior NetTrade but as a ‘cost overrun’ by IndiaSoft.
to this Courtship one. At the Dating stage, NetTrade explored a
number of options and had some brief liaisons with a number of
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