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Management control systems and relational performance in inter-organizational relationships: the role of justice and trust

Conference Paper


Abstract


  • This study investigates the relationships among organization justice, inter-firm trust, management control systems (MCS) and relational performance. The focus on organizational justice and inter-firm trust highlights the human, social and equity aspects in the design of MCS and relational performance in inter-organizational relationships (IORs). Findings from a survey of 232 Australian IORs reveal that informational fairness has significant direct effects on the use of social controls and relational performance. The three other forms of justice, namely, procedural, distributive and interpersonal fairness, do not have direct effects on control extent, the use of formal and social controls, and relational performance. Goodwill trust has no mediation effects on the relations between four-dimension of justice and the use of MCS, but it mediates the associations between (1) distributive fairness and relational performance and (2) informational fairness and relational performance. Competence trust presents significant mediation effects on the relationships between (1) distributive fairness and the use of social controls, (2) informational fairness and the use of social controls, (3) distributive fairness and relational performance; and (4) informational fairness and relational performance. In addition, competence trust moderates the relationship between interpersonal fairness and relational performance. These findings suggest that distributive and informational fairness can facilitate inter-organizational trust building. This study also considers the implications of the findings on the design of MCS and relational performance.

UOW Authors


  •   Wang, Andy
  •   Dyball, Maria Cadiz. (external author)

Publication Date


  • 2012

Citation


  • Wang, A. & Dyball, M. Cadiz. (2012). Management control systems and relational performance in inter-organizational relationships: the role of justice and trust. 9th GLOBAL Management Accounting Research Symposium (GMARS) (pp. 1-58).

Start Page


  • 1

End Page


  • 58

Abstract


  • This study investigates the relationships among organization justice, inter-firm trust, management control systems (MCS) and relational performance. The focus on organizational justice and inter-firm trust highlights the human, social and equity aspects in the design of MCS and relational performance in inter-organizational relationships (IORs). Findings from a survey of 232 Australian IORs reveal that informational fairness has significant direct effects on the use of social controls and relational performance. The three other forms of justice, namely, procedural, distributive and interpersonal fairness, do not have direct effects on control extent, the use of formal and social controls, and relational performance. Goodwill trust has no mediation effects on the relations between four-dimension of justice and the use of MCS, but it mediates the associations between (1) distributive fairness and relational performance and (2) informational fairness and relational performance. Competence trust presents significant mediation effects on the relationships between (1) distributive fairness and the use of social controls, (2) informational fairness and the use of social controls, (3) distributive fairness and relational performance; and (4) informational fairness and relational performance. In addition, competence trust moderates the relationship between interpersonal fairness and relational performance. These findings suggest that distributive and informational fairness can facilitate inter-organizational trust building. This study also considers the implications of the findings on the design of MCS and relational performance.

UOW Authors


  •   Wang, Andy
  •   Dyball, Maria Cadiz. (external author)

Publication Date


  • 2012

Citation


  • Wang, A. & Dyball, M. Cadiz. (2012). Management control systems and relational performance in inter-organizational relationships: the role of justice and trust. 9th GLOBAL Management Accounting Research Symposium (GMARS) (pp. 1-58).

Start Page


  • 1

End Page


  • 58