Trust, control and the role of interorganizational systems in electronic partnerships

ABSTRACT

Abstract. To survive and thrive in today's competitive marketplace, organizations are increasingly migrating to new organizational structures in which partnerships and interorganizational systems (IOSs) are becoming more important. The success of these partnerships depends on both trust and control – complex constructs that act on and shape each other over time. Many organizations assume that high levels of trust are necessary for net-enabled electronic partnerships. We examine this assumption from two perspectives: the initial decision to enter into a partnership or alliance, and its ongoing operation. Our findings suggest that researchers have treated trust simplistically, failing to distinguish the need for trust (which is inversely related to the organization's ability to control its partners) and the level of trust (which is an actual quantity that may change during the lifetime of the partnership). In many organizations, there is a gap between these two trust dimensions, which management attempts to close by changing the level of control. In this process, the IOS is key. To understand the relationship of IOS use to trust and control, we applied structured content analysis and analytic induction to 16 published case studies and used the results to create a framework for relating trust and control. At the heart of the framework is the recognition that trust and control are not simple substitutes for each other. Rather, they form a dialectic, where it makes sense to consider each construct only in relationship to the other. Using the framework, we identify areas for follow-up research and suggestions for practitioners.