THE ROLE OF SERVICE LEVEL AGREEMENTS IN RELATIONAL2 MANAGEMENT OF INFORMATION TECHNOLOGY3 OUTSOURCING: AN EMPIRICAL STUDY14

This study extends the view that formal contracts and rela-tional governance function as complements rather than as substitutes. We investigate how specific characteristics of service level agreements (SLAs) impact relational governance in information technology outsourcing relationships. Eleven contractual elements (categorized into three SLA character-istics: foundation, change, and governance characteristics) are hypothesized to act as complements of three relational governance attributes: relational norms, harmonious conflict resolution, and mutual dependence. Data for the study were collected through a survey of South Korean IT executives. Results of the study support the fundamental proposition of complementarity between formal contracts and relational governance, and indicate that well-structured SLAs hav