A relational perspective on the contract-control-trust nexus in an interfirm relationship

Abstract

This paper makes sense of the contract-control-trust nexus in interfirm relationships by exposing the performativity of a contract and its incorporated control structures in generating trust. In our study of an outsourcing relationship between Semorg (an international manufacturer of semi-conductors) and Fasorg (the provider of facility management services), we find that trust is interactively related to control in complex and often unpredictable ways rather than in linear ways that result from managerial decision-making. In the network of associations that constitutes the interfirm relationship, trust is not a stable solution that generates predictability, but a quasi-actor that is made to act by the contract and the incorporated control structures. As a quasi-actor, trust is fluent and performative. Once in existence, it mobilises human actors and shapes the relationship. Thus, from a relational perspective trust is a possible and to a large extent unpredictable network effect. This differs from the rational perspective in which trust is an expectation that (in multiple categories) straightforwardly emerges and develops from managerial decisions.

A study of the operationalization of management controls in United Kingdom Private Finance Initiative contracts

“…I think mutual understanding is a kind of key point and trust is the next step on from that. (Contract Manager‐HA)The notion that mutual understanding could enable the development of a trust‐based relationship in contractual inter‐organizational settings is consistent with Minnaar et al (). Thus, an interactive review of the contract designed to develop a mutual understanding of each partner's needs could be constitutive of trust practices and contribute to the development of a trusting and collaborative relationship.…”

“…(Contract Manager‐HA)If MCS do not provide opportunities for positive feedback to the contractors and/or they perceive procedural un fairness in their deployment, this may negatively impact on performance and relationships. In these instances, the partners can rely on trust practices to agree collectively acceptable controls (Minnaar et al ). Accordingly, the next section considers how trust practices between the Highways Agency and the SPV are developed and utilized to address MCS‐related tensions.…”

An Examination of Trust as a Strategical Factor of Success in Logistical Firms

“…Anderson et al (2017) find that higher initial trust is associated with reduced expenditures for management controls and increased investments in the collaboration. Minnaar et al (2017) find that trust is interactively related to control in complex and often unpredictable ways rather than in linear ways that result from managerial decision-making. In the network of associations that constitutes the interfirm relationship, trust is not a stable solution that generates predictability, but a quasi-actor that is made to act by the contract and the incorporated control structures.…”

De performativiteit van accounting in de gezondheidszorg

“…Het relationele perspectief op MAC staat haaks op het functionele perspectief (Minnaar et al 2016). Vanuit een functioneel perspectief zijn accounting-toepassingen vooraf ingeregelde instrumenten met voorspelbare effecten en processen die eenduidige informatie opleveren en control-problemen volgens een vastomlijnde procedure ondervangen.…”

“…Hij veronderstelt een instrumentele toepassing van MAC-informatie die de uitkomsten van activiteiten eenduidig in beeld brengt en die het management in staat stelt processen bij te sturen overeenkomstig het vastgestelde beleid. Dat deze voorstelling op z'n minst een beperkte weergave is van wat MAC bewerkstelligt, wordt duidelijk als we de literatuur in ogenschouw nemen die geschreven is vanuit een relationeel perspectief op MAC, waarbij MAC gezien wordt als 'actor' die vorm geeft aan netwerkverbanden en andersom ook in het netwerk vorm krijgt (Mahama et al 2016;Minnaar et al 2016; Vosselman 2014). In deze studies wordt de performatieve werking van MAC belicht.…”