An information processing view on joint vendor performance in multi-sourcing: The role of the guardian

Abstract

This paper examines joint vendor performance in multi-sourcing arrangements. Using an Information Processing View, we argue that managing interdependencies between multiple vendors imposes substantial information processing (IP) requirements on clients. To achieve high joint performance, clients therefore need to possess sufficient IP capacity. We examine how three sources of IP capacity, two internal (i.e., the client’s inter-vendor governance and the client’s architectural knowledge) and one external (i.e., the guardian vendor), work together in realizing joint performance. Our results show that formal governance and architectural knowledge contribute to joint performance. The guardian vendor contributes to joint performance in settings where the client deploys strong governance but lacks architectural knowledge. This suggests that, contrary to common views in the literature, guardian vendors should not be understood as mediators (or single points of contact) who relieve clients from governance efforts. Instead, guardian vendors are more fruitfully understood as architects, who complement the client’s governance efforts by compensating for knowledge gaps. Put simply, client firms should consider using a guardian vendor to compensate for weak architectural knowledge while still maintaining strong formal and informal governance of all vendors