Trust and control in cooperations

To ensure cooperation, parties in inter-organizational relationships draw upon both control and trust. However, the relation between these two is not straightforward and is likely to change throughout the cooperation. Decisions to trust will always depend on how control is perceived, and decisions on how to control depend on trust in the other party.

The temporal nature of controlling and trusting

We have conducted a longitudinal study of a client-contractor relationship in the Norwegian infrastructure industry. Our study unpacks the interplay between control–trust dynamics and demonstrates the continuous adjustments of the relationship between control and trust as the inter-organizational relationship evolves.

Critical incidents such as external events distorting the relationship, performance failures by one of the parties, or different understandings of the contract in relation to specific events, change the characteristics of the relationship. However, such incidents are often perceived differently by the parties leading to one party asking for more control while the other party is focusing on maintaining trust. These asymmetries, in turn, create tensions regarding how and when the parties rely on control and trust.

Cycles of action and reaction

How do the parties cope with these tensions through what we call action-reaction cycles?

One key in this cycle is coping practices. The coping practices redefine the controlling and trusting domain (the combination of control and trust that are seen to be appropriate for the actors in a given situation) and mediate between the multiple and temporal domains to ensure that control and trust again refer to and create one another to enable the (re)forming of positive expectations in the relationship.

Three practices to ensure productive cooperation

Successful coping with tensions ensures that control and trust refer to and create one another to fit the new situation. In our study, we identified three coping practices:

1. The routinizing coping practice is about redefining the controlling and trusting domain by adjusting and clarifying the joint routines and procedures supporting the cooperation.
2. The re-organizing coping practice concerns changes in the structural context of the relationship such as replacing people, developing new meeting arenas, and changing the project end date to enable improved cooperation between the parties.
3. The joint problem-solving practice involves developing solutions to critical events as an integrated team despite belonging to independent organizations with different interests. We find that initiating joint problem-solving requires a certain level of trust between the parties, creating the belief that, they are competent to solve the challenge together.

How should managers cope with control and trust?

When managing cooperation between organizations, the parties are better able to cope with tensions in the relationship if they acknowledge that control and trust cannot be seen in isolation and recognize the presence of temporal controlling and trusting domains.

Managerial awareness is key when critical incidents occur as they may incur conflicting risk assessments between the parties and create tensions in the relationship. Coping practices help redefine the controlling and trusting domain as they mediate between the multiple and temporal domains in the relationship.

As such, coping practices represent key tools for managers to ensure that control and trust refer to and create one another to form positive expectations and, thus, ensure cooperation.

Reference:

Swärd, A.R., Kvålshaugen, R. and Bygballe, L.E. (2022), Unpacking the Duality of Control and Trust in Inter-Organizational Relationships through Action-Reaction Cycles. Journal of Management Studies. https://doi.org/10.1111/joms.12864