ABSTRACT
Abstract: In this chapter, we build on the extant research on sourcing of information technology (IT) by exploring the question: Why do similar IT activities in firms become subject to different sourcing arrangements? This question also has a bearing on empirical observations that selective sourcing is a more certain recipe for success. We seek to explain the observed variation in sourcing arrangements by exploring institutional forces that channel organizations to alternative and/or selective sourcing arrangements. We draw on institutional theories based on macro-level explanations, and examine the role of IT managers as boundary spanners at the micro level. Cost and service centers are proposed as diametrically opposite structural contexts that lead to divergent sourcing arrangements, which are a result of both institutional forces and the behavior of managers. The institutional and individual antecedents are key elements in the success of selective sourcing and other novel arrangements. Alternative relationships with IT vendors follow under cost and service center strategies.
