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Introducing the Sustainability Framework of ‘External Control’ in Interfirm Control

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  • Terhi Chakhovich
  • Tuija Virtanen

Abstract

This study addresses the phenomenon of interfirm control in the context of sustainability. The research question is how is it possible to develop interfirm control in the field of sustainability and with the associated stakeholder focus needed so that stakeholder views are taken as explicit goals. The study is connected to theories on interfirm control, control package and sustainability. The research uses an intensive case methodology and semi-structured interviews focusing on a case company in the building industry and its stakeholders. The major theme of control in the company studied is sustainability. The article shows how the company establishes interfirm control and even attempts to control its customers, which may be perceived as a relatively rare practice. However, it is shown that the control approach to sustainability can result in the theme being defined on the basis of the perspective of the industry, the company and control itself, not on the basis of stakeholder needs. Alternative ideas, such as wider societal and planet-related needs, contradictions within sustainability and the risk of simplification to economic concerns, are considered less. The study then presents a novel framework, ‘external control’, that considers stakeholder expectations as explicit goals. This framework of external control contributes to the interfirm control literature and ties missing perspectives to controls, thereby also contributing to the sustainability and control package literature.

Suggested Citation

  • Terhi Chakhovich & Tuija Virtanen, 2022. "Introducing the Sustainability Framework of ‘External Control’ in Interfirm Control," South Asian Journal of Business and Management Cases, , vol. 11(1), pages 64-73, April.
    • Handle: RePEc:sae:sajbmc:v:11:y:2022:i:1:p:64-73
    DOI: 10.1177/22779779221081486
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    References listed on IDEAS

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