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Accounting, contracts and trust in supply relationships

Suresh Cuganesan (Macquarie Graduate School of Management, Macquarie University, Australia)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 12 June 2007

1166

Abstract

Purpose

The paper investigates the operation of the trust‐formal control dynamic in collaborative supply relationships.

Design/methodology/approach

A case study of an Australian metal manufacturer (IronBiz) and its collaborative supply relationships is conducted.

Findings

Relationships between formal controls (comprising accounting controls and contracts) and trust are developed based on the empirical observations from the case study conducted and prior literature.

Research limitations/implications

The main limitations of the paper include: an empirical examination of the buyer organisation only in dyadic supply relationships; the limited generalisability associated with the methodology and field site chosen.

Originality/value

In contrast to the continued popularity of collaborative arrangements as a form of organisation, gaps in the literature still exist as to the dynamics of trust creation and the relationship between trust and formal controls. This paper focuses on the trust‐formal control dynamic, with an emphasis on how trust is generated and sustained in supply relationships and the role of formal controls in this process.

Keywords

Citation

Cuganesan, S. (2007), "Accounting, contracts and trust in supply relationships", Journal of Accounting & Organizational Change, Vol. 3 No. 2, pp. 104-125. https://doi.org/10.1108/18325910710756131

Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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