DOES DOMBERGER’S THEORY OF THE CONTRACTING ORGANIZATION EXPLAIN SATISFACTION WITH IT OUTSOURCING?

Abstract

The paper tests whether what appears to be a strong general theory of why organizations choose to acquire goods and services through contracting rather than in-house service provision, namely Domberger’s theory of the Contracting Organization, applies in an IT context. The validity of that theory is tested using data from a survey of 235 senior IT managers. The paper concludes that, in a field still searching for appropriate theory, Domberger’s work does indeed provide a very useful lens for understanding IT outsourcing. His four types of benefit of contracting—specialization, market discipline, flexibility, and cost saving—emerge as a concise summary of senior IT managers’ explanations of w..