Mum Effect as an Offshore Outsourcing Risk: A Study of Differences in Perceptions

Abstract

Mum effect is the risk arising from project members' reluctance to report negative information. We investigate the cultural factors contributing to this risk in offshore outsourcing. The study was conducted in Thailand with participation from both students and IT professionals. In order to understand the influence of the IT work environment on the risks, we used the student data as a control sample since students and professionals share the same cultural background but only the professionals have the work experience in the IT industry. We use three of Hofstede's cultural characteristics (power distance (PD), long-term orientation and individualism) and three mum effect factors (fear of consequences, communication gap and team solidarity). Our findings show that PD (i.e. inequality based on seniority and other status symbols) has a significant influence on mum effect factor. Professionals correlate it with team solidarity (Pearson's r=0.7, p<0.001) indicating that PD with supervisors is likely to influence team members to be protective of each other. There were also significant differences between students' and professionals' mean response to PD (t(75)=-2.97, p=0.004), fear of consequences (t(75)=-3.67, p<0.001) and communication gap (t(75)=-3.5, p=0.001), with professionals producing lower mean values, indicating that the work environment within the IT companies is possibly less risky than the general culture.