Joint Vendor Performance in Multi-Sourcing Arrangements: The Role of the Guardian

This paper examines joint vendor performance of 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 (informal/formal governance and the client’s architectural knowledge) and one external (the use of a guardian vendor) affect joint performance. In the case of internal sources of IP capacity, we find that formal governance and architectural knowledge contribute to joint performance, while informal governance is beneficial only in concert with architectural knowledge. Interestingly, the use of a guardian vendor as an external source of IP capacity does not necessarily increase the joint performance of the multi-sourcing arrangement. The guardian vendor contributes to joint performance in settings where the client deploys strong governance but lacks architectural knowledge. Against common views in the outsourcing literature, the guardian model does not relieve clients from governance efforts but it helps them compensate for knowledge gaps. We conclude by offering theoretical and practical implications.