Constraining Opportunism in Information Systems Consulting: A Three Nation Examination
Study: Constraining Opportunism in Information Systems Consulting: A Three Nation Examination
Opportunism, devious self-interest behavior, is a persistent social problem. Attempts to restrict opportunism, such as legal and ethical codes, have shaped societies for millennia. Opportunism differs from mere profit maximizing because it takes advantage of a trusting relationship to advance self-interest. According to a previous study by three of the authors, a majority of IS consultants and their clients have observed opportunism. Such practices might include breaking promises, being untruthful, or not acting in the other party’s best interests. Information asymmetry, when one party knows more about a situation than another, is the root cause of opportunism.
When information asymmetry is high, clients should use one or more social constraints. When information asymmetry is low, clients should use a legal constraint. For complex engagements, clients should use an advisor firm to constrain opportunism. Clients should develop project relevant tacit knowledge prior to a consulting engagement to lower information asymmetry. Consultants should recognize that national differences can impact how clients select and deploy constraint options
How it was studied:
This article examines the relative effectiveness of eight different constraint mechanisms on IS consultants in China, Saudi Arabia, and the United States, for seven types of projects with different levels of information asymmetry, tacit knowledge, and explicit knowledge. Generally, consulting clients in the United States believe that social constraints are more effective, while those in China and Saudi Arabia favor legal constraints. The research suggests that these findings are a result of differences in legal systems and the foundations of social norm formation.