Achieving offshore software development success: An empirical analysis of risk mitigation through relational norms

• Analysed 40 US firms engaged in offshore software development.
• Tested differential impact of relational norms on outsourcing success.
• Found solidarity and flexibility significantly moderate shirking risk.

Behavioral risks such as shirking and misappropriation of information assets are more prominent in offshore software development context and could adversely affect offshore outsourcing success. This paper studies the moderating effects of different relational norms on the link between behavioral risks and offshore software development success. We focused on three major modes of relational norms: norm of flexibility, norm of solidarity and norm of information exchange. Using PLS path modeling to test a sample of 40 US corporations engaged in offshore software development, we found that the norms of solidarity and flexibility reduced the negative effects shirking risk on offshore software development success. Our results suggest that client firms shall benefit by forming the right mode of relational norms to achieve offshore success.