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

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

Accounting, Organizations and Society, 2008, vol. 33, issue 7-8, 968-994

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.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:33:y:2008:i:7-8:p:968-994

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