Trust, distrust, and control in strategic alliances

While the association between trust and inter-organizational control has received significant attention, few efforts have been made to investigate trust/control in relationships involving multiple arenas of interaction. By more critically studying where trust is built, who is involved in trusting and what is actually trusted in a relationship, we seek to further conceptualize the link between trust and control. Our framework explores goodwill and competence trust as an organizational phenomenon and considers the complex interplay between trust and distrust. For empirical input, we perform a longitudinal case study of a retail buyer’s attempts to introduce open book accounting in three supplier relationships. Our findings lead us to suggest that, in complex relationships, the association between trust, distrust and control should be analyzed in relation to specific control domains, i.e. circumscribed arenas of organizational interaction where control is exercised. Trust and distrust, however, also spill over between control domains. Whereas competence trust spillover seems largely determined by task similarity, goodwill trust spillover to a greater extent relies on staff mobility between control domains. Overall, the negative effects of distrust spillover for the implementation of control appear greater than the positive effects of trust spillover. We conclude that trust building is not only a cumulative process but also resembles a diffusion process as locally formed trust and distrust spill over between control domains.