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Management control systems as inter-organizational trust builders in evolving relationships: Evidence from a longitudinal case study

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  • Vélez, Maria L.
  • Sánchez, José M.
  • Álvarez-Dardet, Concha

Abstract

Research on inter-organizational relationships argues that at mature stages, when trust has reached a high level, it will be damaged by new management control systems (MCSs). This longitudinal case study provides evidence to the contrary: in an open-ended and evolving relationship, even when trust is well established, MCSs can build it. High trust provides a platform where success encourages the partners to cooperate further, demanding, in turn, more MCSs and greater levels of trust to support cooperation. By providing evidence with a greater appearance of objectivity than informal controls can yield, action and result controls improve partners' perception of each other's trustworthiness, and build competence and goodwill-based trust. MCSs are used not only to supervise but also to coordinate, and this second, more salient function avoids possible suspicions that could damage trust.

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  • Vélez, Maria L. & Sánchez, José M. & Álvarez-Dardet, Concha, 2008. "Management control systems as inter-organizational trust builders in evolving relationships: Evidence from a longitudinal case study," Accounting, Organizations and Society, Elsevier, vol. 33(7-8), pages 968-994.
    • Handle: RePEc:eee:aosoci:v:33:y:2008:i:7-8:p:968-994
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    2. Holtgrave, Maximilian & Nienaber, Ann-Marie & Ferreira, Carlos, 2017. "Untangling the trust–control nexus in international buyer–supplier exchange relationships: An investigation of the changing world regarding relationship length," European Management Journal, Elsevier, vol. 35(4), pages 523-537.
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    14. Magnus Boström, 2015. "Between Monitoring and Trust: Commitment to Extended Upstream Responsibility," Journal of Business Ethics, Springer, vol. 131(1), pages 239-255, September.
    15. Mahsa Hosseini & Hosseini Norouzi, 2017. "Investigating the impact of consumer trust on loyalty and purchase intention of food store brands: Case study: Palladium shopping mall in Tehran," International Review of Management and Marketing, Econjournals, vol. 7(4), pages 138-146.
    16. Long, Chris P., 2018. "To control and build trust: How managers use organizational controls and trust-building activities to motivate subordinate cooperation," Accounting, Organizations and Society, Elsevier, vol. 70(C), pages 69-91.
    17. Gisele de Campos Ribeiro & Carole Donada & Caroline Mothe & Gwenaëlle Nogatchewsky, 2019. "The Respective Effects of Virtues and Inter-Organizational Management Control Systems on Relationship Quality and Performance: Virtues Win," Post-Print hal-01700970, HAL.
    18. Jørgensen, Lene & Jordan, Silvia & Mitterhofer, Hermann, 2012. "Sensemaking and discourse analyses in inter-organizational research: A review and suggested advances," Scandinavian Journal of Management, Elsevier, vol. 28(2), pages 107-120.
    19. Sánchez, José M. & Vélez, María L. & Ramón-Jerónimo, María A., 2012. "Do suppliers' formal controls damage distributors' trust?," Journal of Business Research, Elsevier, vol. 65(7), pages 896-906.
    20. Carole Donada & Caroline Mothe & Gwenaëlle Nogatchewsky & Gisele Campos Ribeiro, 2019. "The Respective Effects of Virtues and Inter-organizational Management Control Systems on Relationship Quality and Performance: Virtues Win," Journal of Business Ethics, Springer, vol. 154(1), pages 211-228, January.
    21. Manzurul Alam & Arthur John Griffiths, 2016. "Management control systems in inter-agency collaboration: a case study," Public Money & Management, Taylor & Francis Journals, vol. 36(4), pages 289-296, May.
    22. Rodolfo Petter & Luis Resende & Pedro Andrade Júnior & Diogo Horst, 2014. "Systematic review: an analysis model for measuring the coopetitive performance in horizontal cooperation networks mapping the critical success factors and their variables," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 157-178, August.
    23. Eduard Gabriel Ceptureanu & Sebastian Ion Ceptureanu & Violeta Radulescu & Stefan Alexandru Ionescu, 2018. "What Makes Coopetition Successful? An Inter-Organizational Side Analysis on Coopetition Critical Success Factors in Oil and Gas Distribution Networks," Energies, MDPI, vol. 11(12), pages 1-20, December.
    24. Juan García-Álvarez de Perea & Carolina Ramírez-García & Aida Del Cubo-Molina, 2019. "Internationalization Business Models and Patterns of SMEs and MNEs: A Qualitative Multi-Case Study in the Agrifood Sector," Sustainability, MDPI, vol. 11(10), pages 1-26, May.

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