Communication is the key : A two-dimensional case study of relationship quality in offshore outsourcing

Abstract: This thesis aims to describe and analyse how companies establish and maintain relationship quality when outsourcing offshore. In literature we have identified that companies who outsource offshore encounter difficulties with quality and costs. However most of the contracts are renewed even though they encounter these issues. The reason is because relationships are valued higher. In order to create a long-term successful offshore outsourcing, it is of essence for companies to have guidance in how to establish and maintain an effective and fruitful client-vendor relationship.   The identified research research gap we will address in this thesis is the is a lack of research on how to establish and maintain relationship quality in an offshore outsourcing relationship, in terms of exploring the topic from both the client and the vendor perspective.   In the literature review theories and previous research on offshore outsourcing overall is presented, as well as explains what successful and unsuccessful is. The literature review elaborates on relationship quality and social exchange theory in relation to offshore outsourcing. Furthermore, it goes into detail of the variables that are of the utmost interest to create relationship quality. These variables are trust, commitment and satisfaction.   In this study both the client’s and the vendor's perspective is illustrated and compared. This was possible by conducting qualitative interviews with both client and vendor. The interviewees all had several years experience of working with outsourcing to or from India. The empirical finding from these interviews were analysed with help from the theoretical framework. However during the interviews we identified that communication is significantly important when establishing and maintaining relationship. To achieve success in an offshore outsourcing project the communication between the client and the vendor should be trustworthy, transparent, honest and clear, also conflicts should be solved through this type of communication.