First Name: Fengfei (Andy)
Department Dept of Accounting and Corporate Governance
Supervisor(s): Assoc Prof Maria Dyball , Dr. Savanid (Nui) Vatanasakdakul
Management control systems and relational performance in inter-organizational relationships: the role of justice and trust
This study investigates the relationships among organization justice, inter-firm trust and management control systems (MCS) in Australian inter-organizational relationships (IORs).
The focus on organizational justice and inter-firm trust highlights the human, social and equity aspects in the design of MCS in inter-organizational settings.
Key literature/theoretical perspective
Multiple theories and literatures were mobilised: organization justice theory, trust, MCS and relationship performance.
Survey method was used to collect data from 232 Australian inter-organizational relationships.
The results reveal that only informational fairness has significant direct effects on the use of social controls and relational performance. Goodwill trust has no mediation effects on the relations between justice and the use of MCS, but goodwill and competence trust each mediates the associations between distributive fairness and informational fairness, on one hand and relational performance, on the other. Competence trust also presents significant mediation effects on the relationships between distributive and informational fairness and the use of social controls. Finally, competence trust moderates the relationship between interpersonal fairness and relational performance.
Perceptions of fairness influences trust-building, the use of social controls and relational performance. Further research is required to validate and extend the model.
Practical and Social implications
The study takes an equity perspective, considers human interactions and information sharing, which could provide useful insights for the design of MCS in IORs that help minimise risks from partners’ opportunistic behaviours and appropriation.
management control systems, inter-organizational relationship, organization justice, inter-firm trust, performance