IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i5p1873-d327302.html
   My bibliography  Save this article

Trust, Control, and Value Creation in Strategic Networks of SMEs

Author

Listed:
  • Fabio Antoldi

    (Department of Economic and Social Sciences, Università Cattolica del Sacro Cuore, Via Emilia Parmense 84, 29122 Piacenza, Italy)

  • Daniele Cerrato

    (Department of Economic and Social Sciences, Università Cattolica del Sacro Cuore, Via Emilia Parmense 84, 29122 Piacenza, Italy)

Abstract

This paper investigates the role of trust and control in networks of small and medium-sized enterprises (SMEs), with a focus on both their direct and interaction effects on value creation. To delve into the interplay between trust and control, we unpack control mechanisms into three different forms: output, process, and social control. Our hypotheses are tested on a sample of 58 Italian SME networks based on formal agreements. Results show that the competitiveness and sustainability of inter-firm networks require trust-based relationships among entrepreneurs. Additionally, the adoption of output control mechanisms reinforces the positive link between trust and value creation, whereas a substitution effect exists between trust and process control and, with limited significance, between trust and social control.

Suggested Citation

  • Fabio Antoldi & Daniele Cerrato, 2020. "Trust, Control, and Value Creation in Strategic Networks of SMEs," Sustainability, MDPI, vol. 12(5), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:5:p:1873-:d:327302
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/5/1873/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/5/1873/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Constantine S Katsikeas & Dionysis Skarmeas & Daniel C Bello, 2009. "Developing successful trust-based international exchange relationships," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(1), pages 132-155, January.
    2. Joanna Cygler & Włodzimierz Sroka & Marina Solesvik & Katarzyna Dębkowska, 2018. "Benefits and Drawbacks of Coopetition: The Roles of Scope and Durability in Coopetitive Relationships," Sustainability, MDPI, vol. 10(8), pages 1-24, August.
    3. Rosenfeld, Stuart A., 1996. "Does cooperation enhance competitiveness? Assessing the impacts of inter-firm collaboration," Research Policy, Elsevier, vol. 25(2), pages 247-263, March.
    4. Charles Dhanaraj & Marjorie A Lyles & H Kevin Steensma & Laszlo Tihanyi, 2004. "Managing tacit and explicit knowledge transfer in IJVs: the role of relational embeddedness and the impact on performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 428-442, September.
    5. Jay B. Barney & Mark H. Hansen, 1994. "Trustworthiness as a Source of Competitive Advantage," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 175-190, December.
    6. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 1005-1032, December.
    7. Karl Widerquist, 2018. "The Bottom Line," Exploring the Basic Income Guarantee, in: A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, chapter 0, pages 93-98, Palgrave Macmillan.
    8. Lee, Yikuan & Cavusgil, S. Tamer, 2006. "Enhancing alliance performance: The effects of contractual-based versus relational-based governance," Journal of Business Research, Elsevier, vol. 59(8), pages 896-905, August.
    9. Abosag, Ibrahim & Lee, Joong-Woo, 2013. "The formation of trust and commitment in business relationships in the Middle East: Understanding Et-Moone relationships," International Business Review, Elsevier, vol. 22(3), pages 602-614.
    10. Akbar Zaheer & Bill McEvily & Vincenzo Perrone, 1998. "Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance," Organization Science, INFORMS, vol. 9(2), pages 141-159, April.
    11. Fabio Antoldi & Daniele Cerrato & Donatella Depperu, 2011. "Export Consortia in Developing Countries," Springer Books, Springer, number 978-3-642-24879-5, October.
    12. Pedro Soto-Acosta & Diana-Maria Cismaru & Elena-Mădălina Vătămănescu & Raluca Silvia Ciochină, 2016. "Sustainable Entrepreneurship in SMEs: A Business Performance Perspective," Sustainability, MDPI, vol. 8(4), pages 1-12, April.
    13. Włodzimierz Sroka & Štefan Hittmár, 2013. "Management of Alliance Networks," SpringerBriefs in Business, Springer, edition 127, number 978-3-642-34246-2, July.
    14. Dong Chen & Seung Ho Park & William Newburry, 2009. "Parent contribution and organizational control in international joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 30(11), pages 1133-1156, November.
    15. Xuedong Liang & Xianli Zhao & Min Wang & Zhi Li, 2018. "Small and Medium-Sized Enterprises Sustainable Supply Chain Financing Decision Based on Triple Bottom Line Theory," Sustainability, MDPI, vol. 10(11), pages 1-17, November.
    16. J. Carlos Jarillo, 1988. "On strategic networks," Strategic Management Journal, Wiley Blackwell, vol. 9(1), pages 31-41, January.
    17. Mike Simpson & Nick Taylor & Karen Barker, 2004. "Environmental responsibility in SMEs: does it deliver competitive advantage?," Business Strategy and the Environment, Wiley Blackwell, vol. 13(3), pages 156-171, May.
    18. Costa e Silva, Susana & Bradley, Frank & Sousa, Carlos M.P., 2012. "Empirical test of the trust–performance link in an international alliances context," International Business Review, Elsevier, vol. 21(2), pages 293-306.
    19. Maurizio Zollo & Jeffrey J. Reuer & Harbir Singh, 2002. "Interorganizational Routines and Performance in Strategic Alliances," Organization Science, INFORMS, vol. 13(6), pages 701-713, December.
    20. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    21. Holger Patzelt & Dean A. Shepherd, 2008. "The Decision to Persist with Underperforming Alliances: The Role of Trust and Control," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1217-1243, November.
    22. Bernheim, B Douglas & Whinston, Michael D, 1998. "Incomplete Contracts and Strategic Ambiguity," American Economic Review, American Economic Association, vol. 88(4), pages 902-932, September.
    23. Gerald E. Fryxell & Robert S. Dooley & Maria Vryza, 2002. "After The Ink Dries: The Interaction Of Trust And Control In Us‐Based International Joint Ventures," Journal of Management Studies, Wiley Blackwell, vol. 39(6), pages 865-886, September.
    24. Andrea Revell & Robert Rutherfoord, 2003. "UK environmental policy and the small firm: broadening the focus," Business Strategy and the Environment, Wiley Blackwell, vol. 12(1), pages 26-35, January.
    25. J Michael Geringer & Louis Hebert, 1991. "Measuring Performance of International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(2), pages 249-263, June.
    26. Piotr Trąpczyński & Łukasz Puślecki & Michał Staszków, 2018. "Determinants of Innovation Cooperation Performance: What Do We Know and What Should We Know?," Sustainability, MDPI, vol. 10(12), pages 1-32, November.
    27. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(4), pages 1005-1032, December.
    28. B Elango & Chinmay Pattnaik, 2007. "Building capabilities for international operations through networks: a study of Indian firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 541-555, July.
    29. Das, T. K. & Teng, Bing-Sheng, 2001. "A risk perception model of alliance structuring," Journal of International Management, Elsevier, vol. 7(1), pages 1-29.
    30. Das, T. K. & Teng, Bing-Sheng, 2003. "Partner analysis and alliance performance," Scandinavian Journal of Management, Elsevier, vol. 19(3), pages 279-308, September.
    31. Chenhall, Robert H., 2003. "Management control systems design within its organizational context: findings from contingency-based research and directions for the future," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 127-168.
    32. Ren Ze & Zhan Kun & Francis Boadu & Liu Yu, 2018. "The Effects of Boundary-Spanning Search, Network Ties, and Absorptive Capacity for Innovation: A Moderated Mediation Examination," Sustainability, MDPI, vol. 10(11), pages 1-18, October.
    33. Jung Hoon Derick Sohn, 1994. "Social Knowledge as a Control System: A Proposition and Evidence from the Japanese FDI behavior," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 295-324, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Telma Mendes & Carina Silva & Alexandra Braga, 2023. "Dancing with Giants: A Unified Framework for Cooperation Networks, Speed of Internationalisation, and Performance," Sustainability, MDPI, vol. 15(3), pages 1-32, January.
    2. Ilir Hajdini, 2024. "Multiple control strategies and franchisor performance: Performance effects of authoritative, contractual, and relational control mechanisms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(3), pages 875-904, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Chia-Ling (Eunice) & Ghauri, Pervez N. & Sinkovics, Rudolf R., 2010. "Understanding the impact of relational capital and organizational learning on alliance outcomes," Journal of World Business, Elsevier, vol. 45(3), pages 237-249, July.
    2. Linda H. Y. Hsieh & Suzana B. Rodrigues, 2014. "Revisiting the Trustworthiness–Performance–Governance Nexus in International Joint Ventures," Management International Review, Springer, vol. 54(5), pages 675-705, October.
    3. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, University of Münster, Institute for Cooperatives.
    4. Koen H. Heimeriks & Geert Duysters, 2007. "Alliance Capability as a Mediator Between Experience and Alliance Performance: An Empirical Investigation into the Alliance Capability Development Process," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 25-49, January.
    5. Tengjian Zou & Gokhan Ertug & Ilya R. P. Cuypers & Donald L. Ferrin, 2023. "Trust across borders: a review of the research on interorganizational trust in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1379-1401, October.
    6. Ng, Paul Wai-Kit & Lau, Chung-Ming & Nyaw, Mee-Kau, 2007. "The effect of trust on international joint venture performance in China," Journal of International Management, Elsevier, vol. 13(4), pages 430-448, December.
    7. Costa e Silva, Susana & Bradley, Frank & Sousa, Carlos M.P., 2012. "Empirical test of the trust–performance link in an international alliances context," International Business Review, Elsevier, vol. 21(2), pages 293-306.
    8. Rekha Krishnan & Inge Geyskens & Jan-Benedict E. M. Steenkamp, 2016. "The effectiveness of contractual and trust-based governance in strategic alliances under behavioral and environmental uncertainty," Strategic Management Journal, Wiley Blackwell, vol. 37(12), pages 2521-2542, December.
    9. Janowicz, M.K. & Noorderhaven, N.G., 2002. "The Role of Trust in Interorganizational Learning in Joint Ventures," Discussion Paper 2002-119, Tilburg University, Center for Economic Research.
    10. Khalid, Saba & Ali, Tahir, 2017. "An integrated perspective of social exchange theory and transaction cost approach on the antecedents of trust in international joint ventures," International Business Review, Elsevier, vol. 26(3), pages 491-501.
    11. Janowicz, M.K. & Noorderhaven, N.G., 2002. "The Role of Trust in Interorganizational Learning in Joint Ventures," Other publications TiSEM f10debea-9d7b-47c3-8d4f-b, Tilburg University, School of Economics and Management.
    12. Buckley, Peter J. & Cross, Adam & De Mattos, Claudio, 2015. "The principle of congruity in the analysis of international business cooperation," International Business Review, Elsevier, vol. 24(6), pages 1048-1060.
    13. Hsieh, Linda H.Y. & Rodrigues, Suzana B. & Child, John, 2010. "Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner," Journal of International Management, Elsevier, vol. 16(3), pages 288-303, September.
    14. Matthew J. Robson & Constantine S. Katsikeas & Daniel C. Bello, 2008. "Drivers and Performance Outcomes of Trust in International Strategic Alliances: The Role of Organizational Complexity," Organization Science, INFORMS, vol. 19(4), pages 647-665, August.
    15. Patrizia Pastore & Antonio Ricciardi & Silvia Tommaso, 2020. "Contractual networks: an organizational model to reduce the competitive disadvantage of small and medium enterprises (SMEs) in Europe’s less developed regions. A survey in southern Italy," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1503-1535, December.
    16. Laure Dikmen & Foued Cheriet, 2021. "Different is beautiful? Effects of asymmetry on international joint-ventures performance [Différents, c'est mieux ? Analyse des effets de l'asymétrie entre les partenaires sur la performance des co," Working Papers hal-03166842, HAL.
    17. Huang, Ming-Chang & Chiu, Ya-Ping, 2020. "A knowledge tension perspective on management control and performance in international joint ventures," Journal of International Management, Elsevier, vol. 26(4).
    18. Maurizio Massaro & Andrea Moro & Ewald Aschauer & Matthias Fink, 2019. "Trust, control and knowledge transfer in small business networks," Review of Managerial Science, Springer, vol. 13(2), pages 267-301, April.
    19. Cunha, P.A.M.F.V., 2005. "The value of cooperation : Studies on the performance outcomes of interorganizational alliances," Other publications TiSEM 59466e6c-1920-461e-b5e9-b, Tilburg University, School of Economics and Management.
    20. Mora-Valentin, Eva M. & Montoro-Sanchez, Angeles & Guerras-Martin, Luis A., 2004. "Determining factors in the success of R&D cooperative agreements between firms and research organizations," Research Policy, Elsevier, vol. 33(1), pages 17-40, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:5:p:1873-:d:327302. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.