Corporate Culture and Trust in a Strategic Alliance

Corporate Culture and Trust in a Strategic Alliance

“In what way does culture as a control system influence trust in a strategic alliance?”

University of Groningen

Faculty of Economics and Business

Master Business Administration

Organization & Management Control

Master’s Thesis 2016-2017

Abstract:

Author info

Name: Vriese, L. Study: MSc BA O&MC Student Nr.: S2764008

Email: l.vriese@student.rug.nl Supervisor: Rehman Abbasi, A. Date: 23 January 17

Article info

Keywords:

Trust, Corporate Culture, Organizational Culture, Management Control Systems, Inter-organizational relationships, IOR, Inter-organizational Control

1. Introduction

“Relationships between trust and control may be key to promoting organizational effectiveness within the organization” (Long & Sitkin, 2006, p. 88). Recently, inter-organizational scenarios have gained more attention as a result of mushroom growth of new forms of business collaborations (Long & Sitkin, 2006). Due to the growth in inter-organizational relationships (IOR), trust and control have gained attention in promoting success of the collaborations. Dekker (2004) underwrites this statement by explaining that there are high failure rates of IORs, because it seems difficult to manage those collaborations. Moreover, the importance of management accounting and controlling those relations is essential for good performances of IORs. Besides management accounting and controlling in IORs, Smith (1998) underwrites the importance of trust in IORs by stating: “The extent to which collaborative relationships are effective depends on the extent to which the partners trust each other. If the partners do not trust each other, any minor disagreement or misunderstanding can destroy their relationship” (p. 133). Whereas trust is defined by Tomkins (2001) as: “simply having confidence that one's expectations will be realised” (p. 165). These statements show the importance between trust and control. Therefore, the connection between them is critical for success and effectiveness of IORs.

One of the main reasons for organizations to cooperate is to combine resources in unique ways and in order to develop a competitive advantage over rival organizations who are not able to do so (Dyer & Singh, 1998). Langfield-Smith (2003) agreed with Dyer & Singh (1998) by stating “Various forms of cooperative ventures and strategic alliances provide ways of gaining access to the specialised skills and competencies that are needed to compete effectively in a globalised market place” (Langfield-Smith, 2003, p. 281). To specify the cooperative structures that have developed, and as the title of this paper describes, this research focuses on a specific type of IOR; a strategic alliance. This relationship is described as: “An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved” (Barringer & Harrison, 2000, p. 383). Based on earlier studies, there are different motives for an organization to embark a strategic alliance. According to Goerzen (2007) this includes “the improvement of market access, the reduction of innovation time span, and the matching of complementary technological capabilities” (p. 489), which is in line with the earlier statement of Dyer & Singh (1998) and Langfield-Smith (2003).

and clan controls. Until today, MCSs are solely used within organizations. According to the research of Malmi & Brown (2008), very little is known on how these control systems configure across organizations. Vélez et al. (2008) highlight the relationship and complexity between trust and MCSs, through there is need for more research on the transmission between inter-organizational trust by cultural processes. This increase the effectiveness between IORs in practice and this case study will demonstrate how culture as a control system can optimize trust in IORs. After defining the gap in the literature, the aim of this study is to contribute to the existing literature by studying the influence of culture as a MCS on trust in IORs. The goal of this research is to investigate and explain how corporate culture has effect on trust in a strategic alliance. The following research question encompasses these concepts:

In what way does culture as a control system influence trust in a strategic alliance?

In practice, this research should entail a deeper understanding of how the cultural part of the control system from Malmi & Brown (2008) has influence on the trust in a strategic alliance. This understanding can help managers control different parts of culture in an effective way, which will positively influences trust. From a theoretical perspective, this research contributes to the existing literature, because there is need to fulfil the research gap by investigating cultural control systems in an inter-organizational relationship and contribute to the effect on trust.

This paper is structured as follows: first, in the theoretical framework existing literature will be discussed and elaborate on the topics strategic alliance, trust, and corporate culture as a control system. Second, the research methods will be explained in the methodology part. Third, the results will show how corporate culture differences influence trust in IORs. The last chapter will show and discuss these results, followed by the conclusion, the limitations and suggestions for further research.

2. Theoretical Framework

In this chapter the theoretical concepts “strategic alliance”, “corporate culture” and “trust” will be explained by using existing literature. These concepts are the basis for the rest of the research. At the end of this chapter the three concepts are connected to one another and their relationship is described.

2.1 - Strategic Alliance

605). The relation between the two is that in both definitions different parties work together on the same problem or tangible outcome what can result in a competitive advantage. For clarification, this research uses the previously mentioned definition given by Smith (1998). Barringer & Harrison (2000) describe two different forms of structures IORs can be organized; tightly coupled forms and loosely coupled forms. Tightly coupled forms are those where the IORs are primarily linked by formal structures and may involve ownership, for example, joint ventures and network structures. Loosely coupled forms involve less structure and ownership, such as trade associations and research consortia. This paper focuses on the loose-coupled relationships; alliance. This, because an alliance is often governed by informal norms and is not based on boundaries that create more formal or tight relationships (Barringer & Harrison, 2000). According to Barringer & Harrison (2000) an alliance provides flexibility and the opportunity to collaborate in different activities, though it takes more risk because it increases the change for misunderstanding and disagreement. Langfield-Smith (2003) argues that trust is only important in situations where there is risk involved, as in an alliance. Because this research is focused on trust in a strategic alliance, the researcher has chosen for this type of collaboration.

Other research has shown that, depending on the industry conditions, firms often form a strategic alliance because strategic capabilities can form a block against the competition. In this composition the organizations share resources and complex skills to reduce uncertainty and exploit power to organizations (Goerzen, 2007). These alliances involve a lot of risk, and one of the main reasons a strategic alliance fails is because of the incompatibility of their partner (Büyüközkan, Feyzioğlu, & Nebol, 2008). According to Büyüközkan, Feyzioğlu, & Nebol (2008) the partnership can lead to large benefits for the organizations, though when failure occurs it can lead to extreme problems. “The selection of a suitable partner for strategic alliance is an important factor affecting alliance performance in logistics value chain. However, many alliances are formed by chance meetings or through previous experience with the partner” (Büyüközkan et al., 2008, p. 149). This statement underlines the importance of selecting the right and trustful partner to increase the success of the alliance.

2.2 - Corporate Culture

cybernetic controls, rewards and compensation and administrative controls. Cultural control is placed at the top of Malmi and Brown’s (2008) framework because these controls are broad and change will go slow (Das & Teng, 1998; Malmi & Brown, 2008). The cultural control system provides a contextual framework for the other control systems (Malmi and Brown, 2008). The cultural control system consists of three different components of culture. These three components are primarily used in this research: clans, values and symbols.

“In a survey of 200 firms involved in alliances, 75 percent felt that alliance failure was caused largely by an incompatibility of corporate culture or personality” (Barringer & Harrison, 2000, p. 392). This argument underlines the importance of a comprehensive cultural control system in an IOR. Corporate culture, organizational culture is used as well, is defined by Hewett, Money, & Sharma (2002) as: “The pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them with norms for behaviour in the organization” (p. 231). Das and Teng (1998) define organizational culture as social control, where social control is defined as: “Normative considerations to influence others' behaviour. Social control is about encouraging desirable behaviour through "soft" measures, therefore it is associated more with such terms as "informal control," "normative control," and "clan control"” (p. 502). Often social control takes place in forms of socialization, interaction and training in alliances (Das & Teng, 1998). Another definition of corporate culture by Malmi and Brown (2008) is: “The set of values, beliefs and social norms which tend to be shared by its members and, in turn, influence their thoughts and actions” (p. 294). For clarification, the definition of Malmi and Brown (2008) is used and will be referred to throughout this research.

2.2.1 – Clan control

foreman only that subset of workers who display a high internal commitment to the firm’s objectives, and he can maintain in them a deep commitment to these objectives, then his need for explicit surveillance and evaluation is reduced” (Ouchi, 1979, p. 837). To summarize, where the foreman will act in favour of the organizations’ goals and attempts to achieve the objectives, the manager has fewer costs on inspecting and observation. These processes are called socialization processes that characterize groups with similar values. If this refers to a specific unit in an organization, it is called a clan. Ouchi (1997) states: “In organizational studies, the socialization mechanisms have been found to be unique to a particular organization, to an industry, or they may characterize most of the firms in an economy” (p. 837). Clan control refers to the common social agreement between employees that constitutes proper behaviour. According to Ouchi (1979) this is a prerequisite to the success of the operation. Clan control place greater emphasis on informal control mechanisms, the relationship in a strategic alliance should be more based on trust than on formal contracts (Cardinal, Sitkin, & Long, 2010). When the outcome of an alliance is measurable, it is more favourable to use a bureaucratic control or a market control system. According to Malmi & Brown (2008) it is interesting to test this control system on an IOR, whereas the question is how this control system is related to trust. Therefore, the first sub-question of this paper is: How does clan control influence trust in a strategic alliance?

2.2.2 – Value control

because of the complexity of organizations, decentralization, downsizing and realignment, employees do not know whom to trust. This statement focusses on the core values of the organization. Just like clan control, the value control is not tested in an IOR. This results in the second sub-question: How does value control influence trust in a strategic alliance?

2.2.3 – Symbol control

Finally, corporate culture focuses on symbol control, what is described by Schein (1997) as: “Symbol-based controls are when organisations create visible expressions, such as building/workspace design and dress codes, to develop a particular type of culture” (Malmi & Brown, 2008, p. 294). For example, the police is wearing a uniform to create a certain culture and demonstrate professionalism. Schein (1997) describes three levels of culture, which range from tangible to deeply embedded. The first one is artefacts, which are visible and the structures and processes are sensible. For example in language, technology, style, clothing, emotional display, rituals and ceremonies, and in myths or stories about the organization. “Observed behaviour is also an artefact as are the organizational processes by which such behaviour is made. Structural elements such as charters, formal descriptions of how the organization works, and organizational charts also fall in the artefact level” (Schein, 1997, p. 24). According to Schein (1997), the difficult part about artefacts is that, usually, deep assumptions of the culture are reflected in symbols. Observers can describe what they see or feel, though the meaning behind this is not observable. An example is an informal organization structure that can be seen as “inefficient” because it creates certain assumptions. However, the significance of this becomes clear when the observer stays in the group for a longer period and the meaning behind it becomes understandable. Schein (1997) adds two levels to the cultural analysis to create a deeper understanding of certain behaviour. Next to artefacts, the second is called espoused beliefs and values, which entails ideas, goals and rationalization behind observed behaviour. For example, an individual accepts certain assumption because the rest of the group relies on these assumptions. The last level is called basic underlying behaviour, which are the taken for granted beliefs and values of the organization (Schein, 1997). Even though, the last two levels are covered in the clan control of Ouchi (1979) and the value control of Simons (1995), it is not described in further detail. Also, symbol control has not been researched in an IOR before. This leads to the next sub-question for this research which reads: How does symbol control influence trust in a strategic alliance?

2.3 - Trust

because Das & Teng (1998) describe that there should be a minimum availability of trust for any form of cooperation. A level of basic trust can reduce the opportunity of unlikely behaviour and it can reduce the costs of cooperation because there is less need for formal contracts. Trust between organizations is also called inter-organizational trust. This is described by Vélez et al. (2008) as, members of organization A who have collectively trusted in organization B whereas they describe trust as: “The willingness of a party to be vulnerable to the actions of another party on the expectation that the other party will perform a particular action which is important to the trustor” (Vélez et al., 2008, p. 970). Tomkins (2001) explains that trust does not improve without the growth of the inter-organizational trust. In addition, Das & Teng (1998) state that if partners do not trust each other, there is more need for equity-based alliance structures. Another finding of Das & Teng (1998) is, if there is less trust involved in cooperation, an adequate control system can cause a high level of confidence, where trust is a contributor to confidence. As described before, it has been argued by Langfield-Smith (2003) that trust is only important in situations where there is risk involved. The reason for this is that risk is a critical aspect of these relationships and trust is the degree in which to behave in a reliable and responsive manner. When organizations previously worked together, they tend to look for these organizations when they are looking for a partner. This is explained by Goerzen (2007) “Yet prior research has observed that organizations often enter into alliances repeatedly with partners from previous ventures since the trust that develops between them may reduce transaction costs” (p. 488). This statement underlines that organizations have more trust in alliances with former partners then entering an alliance with a new partner.

The definition of trust by Dyer & Chu (2011) is based on three components: reliability, fairness and goodwill. Seppänen et al. (2007) combines transactions costs economics with the social exchange theory, which reflects their definition of trust based on three components as well: “Dependability (expectation that the partner will act in the alliance’s best interests), predictability (consistency of actions), and faith (partner will not act opportunistically)” (Seppänen et al., 2007, p. 253). According to Seppänen et al. (2007), the combination of social and economic approaches gives the best view of inter-organizational relationships. Therefore, the definition of Seppänen et al. (2007) will be used for the rest of this research for clarification.

2.4 - Culture-Trust nexus in an inter-organizational relationship

According to prior research, a relationship exists between trust and cultural control. The following paragraph will describe this relationship by using existing literature.

Teng (1998) illustrate that there a positive relationship exist between level of trust and corporate culture, also called social control in their article, in spite of this there is no explicit explanation how different control mechanisms can optimize trust and where social control behaves in an organization. The relationship between the two is underlined by Larson (1992) who states: “Social control is manifested in a certain level of confidence in members' judgment and competence, which lays the foundation for trust” (p. 78). The fit between the organizational cultures is important for the success of the alliance (Beugelsdijk, Koen, & Noorderhaven, 2006), which confirms the importance of the organizational culture in an alliance. What not has been stated yet is how culture influences trust, because a neccesary amount of trust is needed to have in succesful strategic alliance (Langfield-Smith, 2003). Hence, there are different possibilities why a strategic alliance does not succeed and conflicts occur. Some of the complaints a firm in a failing strategic alliance may have are when differences in strategic orientations, technological systems, corporate cultures or in risk perceptions and managerial practices are insurmountable. This diversity in the relationship between firms may create problems, which can lead to an incompatible alliance (Das & Teng, 2003).

At this point the three main subjects of this chapter have been clarified. It became clear that it is not yet researched the how corporate culture has influence on trust in strategic. The conceptual

model above explains the previously discussed concepts, which explains the relationships and concepts of this research. Through this is explained how the cultural control systems of one organization have influence on trust in a strategic alliance. The subsequent chapter will explain the methodology, after this the results, conclusions and discussion will be given.

3. Methodology

Since the field of existing literature does not describe the effect of corporate culture as a control system on trust in a strategic alliance and the field deals with unsolved issues, the researcher has to come up with other techniques to collect data to contribute to the existing literature (van Aken, Berends, & Van der Bij, 2012). This paper will make use of qualitative data to provide more in-depth information about the phenomena and to back up the theory. According to this type of data, this research utilizes the empirical cycle of van Aken et al. (2012) because theory development fits best with this type of research. In this chapter the data collection and data analysis will be given.

3.2 - Data Collection

different interviews were taken regarding the strategic alliance, because for qualitative research interviews are a suitable research method to gain information. In addition, open interviews are required to gain as much in-depth information as possible. During qualitative research, semi-structured interviews are used (Saunders, 2011). “In semi-structured interviews the researcher will have a list of themes and questions to be covered, although these may vary from interview to interview” (Saunders, 2011, p. 320). Answers from the semi-structured interviews are used to come up with answers for the research question and the sub-questions that are formulated in the previous chapter. The interview started with an introduction to the respondent; thereafter questions were asked about the cooperation between the organizations, the level of trust and different types of control were formulated. There was asked for secondary data during the interviews. This, because documents could give additional information besides the interviews that were collected. The secondary data can be found in appendix C.

3.3 - Data Analysis

The analysis is conducted through within case analysis described by Eisenhardt (1989). As explained before, multiple interviews were taken from different perspectives of the organization in the alliance. To increase reliability, different respondents were interviewed at different moments in time and took place at the office of the employee. The Dutch transcripts were processed using the software ExpressScribe and turned into data that could be used after the interviews. After making the transcripts they were coded by using the software Atlas ti. and a within case analysis took place. The list of coding is included in appendix D. All codes are reviewed and after the within analysis they are combined to see if there are patterns between the interviews in the different layers of the organization. By using this coding method the relevant information was extracted, which could be linked to the concepts of the theoretical framework and assisted in answering the research question. Different quotes were used in the results to show the results of the analysis. During the interviews, full records notes were taken about, for example, place and time. Eisenhardt (1989) underlines this by stating, “Different perspectives increase the likelihood of capitalizing on any novel insights which may be in the data” (p. 538). Results of the analysis are given in the following section.

4. Results

4.1 – Corporate culture

The concept of corporate culture will be reviewed at different levels. These analyses will help answering the three sub-questions that are described in the theoretical framework. In the purchasing policy is confirmed that the case company has a minimum level of trust in their partner and later is confirmed that trust in the alliance is crucial if there is risks involved. The purchase manager underlines this by stating:

“In our organization it is crucial that you can trust each other in the processes where risk is involved”

By looking at the corporate culture the clan control, value control, and symbol control are reviewed and statements from the field are used in the analysis.

4.2.1 - Clan control

According to Ouchi (1979) clan control is a socialization process. It is the common agreement between specific members or units of the organization and a prerequisite for success of the organization. This paragraph assists in answering the sub-question: “How does clan control influence trust in a strategic alliance?”

To start, the case company uses a lot of rules and procedures to minimize the risks that are involved in the organization. The partner should also act in line with these procedures what makes it increasingly difficult to reach common agreements about activities that are not measureable. However, there are situations where the employees seem to be controlled by a clan, because the alliance has been in place for years and people have got to know each other. Some interviewees said that, because of their history, people care more about each other. The following two quotes show how the shift leaders had a different view on this:

(1) “The mechanics working for the partner organization work there as long as me”

(2) “You get to know each other during the years and we do our best for them. That works the other way around as well”

company. Another shift leader who has worked at different locations and with different people of the partner organization, states that he created a strong relationship with those people and that worked in favour of the case company. He really sees the employees of the partner organization as their own colleagues. If the regional manager north has a problem with one of the mechanics he will discuss this in person with the mechanic instead of contacting their head office. The following quotes underwrite this:

“I can report it to their head office, but I know that they will lose their job. So I say it to them in person.”

This statement underlines that the regional manager north is satisfied with the mechanics, though he knows that when he says this to the manager of the partner organization, the mechanics will be fired. This is a result of control based on the clan because of unwritten rules that are in favour of the cooperation. Next to this, the manager gaming service & analysis, who has his office next to the office of the partner organization, states:

“It is a very close cooperation and companies are intertwined with each other”

He even states that if there is an issue that should be discussed between the two organizations, this can be done by digital mail or telephone. Sometimes one of the partner employees comes by for a chat, which underlines the informal contact between the two organizations.

Another interesting point is that some interviewees state that the communication varies at different levels within the case company. The senior contract manager states that this can be the case because of different expectations between the operational and the strategic part of the organization. An expectation for the operational level in the organization is that their machines are fixed as soon as possible. Hence, they want to uphold the trustful relation with their mechanics and that this will be done in a short amount of time. However, the strategic part of the organization should have formal contact with the partner organization because they have the responsibility to take care of the deals regarding, for example, prices and contracts. Lastly, people seem to work together based on the position of the employee. The case company aligns positions to the employees and they act according to their position.

4.1.2 - Value control

Besides clan control, value control is analysed as well. Value controls are the basic values, purpose and direction for the organization, which is described by Simons (1995). This paragraph will help answering in the sub-question: “How does value control influence trust in a strategic alliance?”

A striking point that shows value control in the cooperation is the difference in norms and values between the organizations. The manager gaming service & analysis and a shift leader from Leeuwarden state that hospitality is one of the most important values for the case company. The manager gaming service & analysis state that this value is present in all locations of the case company. He argues:

“In the application procedures you look for someone who is in line with your organisation. What is important for such a person? I think we, maybe unconsciously, look for someone who has the same norms and values”

The manager gaming service & analysis gave, at a certain point in his career, hospitality training at the case company. He explains that one should have a minimum level of hospitality in one’s blood; otherwise one would not fit in the culture of the case company. The purchase manager states that hospitality is in the genes of the employees that work for the case company. People always want to help each other and do not blame people on final results. It was also asked if these norms and values differ between the case company and the partner organization. A shift leader from Groningen stated:

“Norms and values... No difference”

These results show all three stages of the value control described by Simons (1995). First, the organization recruits people that have the same feeling for hospitality as they are looking for. Second, the socialization process takes care of the adoption of this basic value and, lastly, all employees that work in the organization adopt this value, even they are the employees of the partner company. This value adds commitment to the organizational goals and takes care of the behaviour of the employees throughout the organization.

competitive tendering. By using competitive tendering, an organization subscribes for a project. The case company communicates transparent and all parties are equally treated so they do not raise one organization above another. Before they enter a cooperation, the case company makes a profile of the important values that the partner organization should have. For example, 70% quality and 30% price importance. The quality value is divided in different components that differ per project and partner. The senior contract manager states:

“You describe quality components and the supplier can agree on that. The better they support our components the more points they deserve.”

The points that the senior contract manager describes mean that the more points a supplier scores, the more chance they have to become a partner. The statement above suggests that it is important to keep a good status for the organization, because the organization is not only focussed on price. This value is communicated though different levels in the organization. The (1) purchase manager and the (2) region manager north underline the argument of the senior contract manager by stating:

(1) “We do not only look at the cheapest supplier. We are a hospitality organization and a company that has a certain status. If we go for the cheapest supplier, we are not certain of a clean organization.”

(2) “The partner should have the same integrity as we have. If this is not the case you can damage your own image”

In the first statement, the hospitality value that is described before comes to light. It suggests that hospitality can be linked to the image of the case company, because the hospitality value seems to be the most important value throughout the case company and the partner organizations are chosen based on the integrity and image that is in line with the hospitality of the case company.

A last value is equality in the partnership. The purchase manager stated before that this was important for potential supplier organizations. However, it seems to be important in the rest of the organization as well. He said that the ultimate collaboration is when the relationship is not based on hierarchies and when you and your partner are in a so-called ‘collaboration-mode’. The manager gaming service & analysis agrees with this statement of the purchase manager by saying:

These two arguments explain the core values of the partnership and the direction for the collaboration. A shift leader from Utrecht stated that the partner organization has the same goals as he has in the operational part of the collaboration. He explained that if you reach the point of both having the same goal, things go faster and more efficient. However, not all employees of the case company see this value in the same way. As earlier described, all employees are satisfied with the mechanics that are working for the case company. But for example a shift leader from Leeuwarden (2) stated:

“My perfect situation would be: I decide and they perform”

In which “they” stands for the employees of the partner organization. Such a statement does not seem to be in line with the argument of the purchase manager about equality, thus maybe some improvements can be made here. In the statement above the interviewee does not seem to expect that the organization is thinking in line with them. The regional manager north argues that he has the feeling that he is only useful for paying the bills and when he wants something extra from his partner, it is always a problem. This feeling can be a result of distrust and this will not lead to an equal relationship with the partner. The feeling of distrust will not increase the involvement of employees. A shift leader from Groningen agrees that, in some instances, difficulties with the fact that the partner organization thinks too much in line the case company. He states that the partner organization is their supplier and do not have to decide what the case company should do. Another point of view by the shift leader from Utrecht on this, is that the mechanics just do what you ask from them. He has the feeling that they do not think along with him and he just gives them a command and they carry it out. Those expressions give different views of the collaboration.

The values that seem to be most important for the case company are hospitality, image and equality. Different statements described above underline this. The hospitality value became clear during the recruitment of new employees in the case company. These were in line with the different stages of Simons (1995). It seems to be the case that the hospitality value became important in the image value as well. This, because the recruited partners were reviewed based on quality components and integrity, therefore, they should behave in the advantage of the case company’s values and directions. These values show the importance of value control of Malmi & Brown (2008) in the cooperation.

4.1.3 - Symbol control

These results will help answering the last sub-question: “How does symbol control influence trust in a strategic alliance?” Symbol controls are visible expressions as, for example, clothing or deeper expressions like rituals and ceremonies (Schein, 1997).

“On operational level you do not see the difference between an employee of our organization or an employee of the partner organization. They feel like our own people. They sit in the restaurant, have lunch with us, walking around”

It seems that employees of the partner organization feel comfortable in the working area of the case company. It can give the feeling that employees of the partner organization are appreciated and people like them, what can result in the feeling of trust. Some employees of the case company think employees of the partner organization does not feel it as 100% colleagues, though they see it as an extension of the organisation. A shift leader from Leeuwarden states that this feeling comes from the fact that the mechanics of the partner organization wear different clothing, like overalls and t-shirts instead of a suit. This is a clear form of symbol control that influences the strategic alliance. However, the same shift leader said that this expression is only visible in clothing. He explained that there was no difference in the behaviour between employees. Besides the clothing, there is a difference in hierarchies between the organizations. To come up with data on this subject the researcher asked, for example, the question: “How is the relation between different layers or divisions in the organization?” It seems that employees interpret the hierarchy different at the case company. For example the purchase manager state:

“The history of the hierarchy in our organisation confirms the Austria model. This model is very hierarchic. This is still visible in the organization. For example, the CEO has his own parking place”

This statement clarifies the hierarchy at the headquarter of the case company. This feeling of the purchase manager seems to differ from the feeling in locations. For example, a shift leader from Utrecht states that he does not feel the hierarchy at his location and he feels free to take his own decisions. However, he explains as well that this is not the case for everyone at his location. The regional manager north is not feeling the hierarchy at all. He has the feeling that he can take any decision he wants as long as he can justify them. The feeling that you can take decisions by your own can result in a certain feeling of trust. In the case company people are responsible for tasks and actions. Four of the eight respondents had the feeling that the case company is more formal in their communication than the partner organization. The partner organization is smaller, though the respondents had the feeling that less people had the authority to make decisions there. The shift leader from Utrecht expressed one example of this by saying:

This visualizes the authority that mechanics at the partner organization have. The expression of authority can give the mechanics a distrustful feeling, because they cannot make all decisions. For the case company, every member of the organization has the feeling clear task and authorities are formulated. A shift leader from Groningen has the feeling that managers of the case company could be a bit authoritarian against employees, while a shift leader from Leeuwarden had the feeling that they all do it together and feels no authority at all. Besides hierarchy and authority, the case company uses a lot of processes and procedures. These procedures are leading throughout the organization. The senior contract manager (1) and the purchase manager (2) underline this by saying:

(1)“We have the contract about rates etc. But for maintenance there are specific procedures and processes”

(2) “There are a lot of process appointments. There is defined how we work and how we’d like to see it from our partner in the locations”

The case company uses a lot of procedures and processes to minimize the risks that are involved in the corporation. The partner organization is forced to use those procedures as well, otherwise they cannot perform their tasks. A shift leader from Leeuwarden states that the number one priorities are procedures and all other comes at place two. The value to use the restrictions is very clear communicated throughout the case company. This became visible when one of the employees told that an external organization was observing all captured procedures. When the employees did not follow the right procedures the external organization was forced to communicate this to managers of the case company. The procedures are leading in the organization and can have consequences for the organization. At some point all shift leaders from different locations explained that, even the observing organization, sometimes they did not use the procedures. They have some appointments with the mechanics that is based on trust. An example of this is the software that is used to show machines that are broken. Officially, the case company should use this software to locate these machines. However, when the mechanics are working at the location, the shift leader walks by or calls the mechanics to ask if they could perform it immediately. All shift leaders think this is more easy and faster than using the software, though trust can be damaged when it injures. An example of this comes from the shift leader Leeuwarden. He states:

“Trust can be damaged caused by different things. If this is the case, I realize that both organizations work by the rules and procedures again. We have to rebuilt that trust”

if the relationship is harmed, employees from both organizations will step back and work against the procedures again. This is a clear example of symbol control that strikes formal descriptions and procedures.

By analysing the symbol control it becomes clear that different components have influence on trust. First, the formal descriptions and procedures that are described by Malmi & Brown (2008) seems to have a major influence on trust level within the cooperation. Second, the visible expressions of clothing seem to have an influence as well. This can give the feeling that the organizations were not intertwined. These symbolic examples show the importance of symbol control that Malmi & Brown (2008) describe in their framework.

To summarize this paragraph of corporate culture, the most important cultural aspects are given in table 1 below. This table divides the cultural aspects and shows the concepts including their major results.

Clan control Value control Symbol control

History of cooperation Recruiting Clothing

Informal contact Core values Procedures/processes

Unwritten rules Image partner organization Hierarchy

Feeling same organization Equality Authority

Table 1

4.2 – Trust

After analysing the cultural control, analysis of how this has influence on trust will be described. In the purchasing policy of the case company, some relevant information is given on the fact that the case company will only cooperate with a profession in which individuals and the general society has confidence. This initiates that a minimum level of trust is needed from the society and individuals to start with a cooperation. Tomkins (2001) defined trust as acting in the interest of the relationship and not against his or her own interest. The alliance between the case company and their partner is going on for years. According to the purchase manager (1) and the senior contract manager (2) of the case company, trust was really important.

(1) “It is an organization where it is crucial that you can trust each other and are confidential in t process”

(2) “You do not expect things happen behind your back where you don’t know about”

(2003) stated that trust is only important in situations where there is risk involved. This argument of Langfield-Smith (2003) is in line with the argument of the shift leader. Unfortunately, sometimes trust the case company built with their partner is harmed. In this case, the partner organization step back to their procedures and does not act in favour of trust anymore. The researcher asked questions like: “how much risks are their involved with the cooperation?” and “how much do you depend up on the cooperation?” to come up with data regarding this subject. Another feeling of different respondents is that, because the strategic alliance had been for a long time, they build up trust. First they had to know each other, see what their specialties were, and if their performance was good. Now, for example, the shift leaders know the mechanics of the partner organization and where they can depend on. Different statements underline this argument.

“Because of that trust, we actually know that they are so specialized that they know what they are doing. However, if a new guy will repair a machine, I take more care of the control after the repair.”

“Because of the long-time of the cooperation we know how to work with each other. The trust.”

The statements above seem to initiate that trust built over time if the experiences are positive. During the cooperation, they received confidence in the actions of the partner organization and developments over time. Two of the eight respondents had the feeling the partner organization was not acting in favour of the case company. They had the feeling that, even there are rules and procedures are very strict, they had to check the partner of the organization. The senior contract manager (1) and the regional manager north (2) are stating:

(1) “Cases are in doubt because you do not know if they send you the right bill”

(2) “I would like if we have such a partner as this, no need to check the bills. I have the feeling I should do now because they do not match.”

5. Discussion

Malmi & Brown (2008) place corporate culture at the top of their framework to regulate the organization, because corporate culture is broad and change will go slow. However, until now, it was never tested in a strategic alliance combined with the effect on trust. This research contributes to the existing literature and in this chapter the existing literature will be combined with gathered data from this case study. Chapter four gave results that could help answering the sub-questions, now these and the main research question will be answered. Starting with the three different cultural control systems and ending at how these control systems influence trust, the existing literature of the theoretical framework will be compared with the insights of this case study. There can be some overlap between the different culture aspects. A clear example of this comes from symbol control, like procedures and processes, that employees of both organizations should follow to minimize the risk. These are visible expressions. However, this symbol control could be value control as well. Core values of the organization are based on procedures, which minimizes risks and employees are forced to use these. Nevertheless, the researcher placed them at the control aspect which had the most influence.

Starting with clan control, Cardinal, Sitkin, & Long (2010) describe that the relationship will be based more on trust than on formal contracts. Ouchi (1979) describes that this is a prerequisite to the success of the operation that work by the values and beliefs of the clan. The clan can be a department in an organization or a group of members. In this case study it is confirmed that, because of the long relationship and the positive experience with the partner organization at operational level, a trust relation is built over time. Since these experience and long relationship with the partner organization, employees of the case company know how to maintain this relationship. In this case, trust is more caused by the socialization process than by the formal contract, which underlines the statement of Cardinal, Sitkin, & Long (2010). Consequently, contact between employees of both organizations is informal and some employees have the feeling that they work for the same organization. Unfortunately, there are a lot of rules and procedures at the case company and an external organization is hired to observe if these are followed. According to Ouchi (1979), another form of control is bureaucratic control, which is more focussed on rules and authority. Since the rules and procedures of the case company are so important, it is harder to make common agreements about proper behaviour and the control systems seems to be more organized as a bureaucratic control system that minimizes the risks of the case company. Although, the history between the organizations they are interwined in each other and we can say that the history of the cooperation has a positive effect on trust. Employees of the partner organization will act in favour of the case company and vice versa, what can be seen as a common agreement about proper behaviour (Ouchi, 1979).

four and analyze how this has influence on trust in the strategic alliance, we can conclude that the recruitment procedures are in line with the theory of Simons (1995). Simons (1995) describes a process that contains three stages where value control comes from. The case company is interested in people with the same core values as them, in this case, hospitality. After employees are hired, they adopt values of the organization through a socialization process, even if these values are not their own. This control system is not only used to hire employees, though for recruiting new partners as well. Potential partners should be able to meet the quality standards of the case company and should not damage their image. According to Beugelsdijk, Koen, & Noorderhaven (2006) the fit between the organizations is important for the success of the alliance and a necessary amount of trust is needed to succeed (Langfield-Smith, 2003). By looking at the case company, they only recruit suppliers with suitable perspectives that can result in a decent fit and, according to Beugelsdijk, Koen, & Noorderhaven (2006), increase the success of the alliance. According to Simons (1997), it is difficult for employees to understand the direction and vision of the organization. When we compare this statement with the case company, we can say that improvements can be made here. For example, some employees do not see the value that is added by the cooperation, which is necessary to promote commitment to the core values of the organization. However, the current recruitement policy the case company uses causes a good fit with employees and suppliers that increase the involvement and commitment to organizations objectives.

again. In some cases the safety of employees or guests is decreased. If this is the case, they will hear it from their managers.

The main question of this research was: “In what way does culture as a control system influence trust in a strategic alliance?” The argument of Langfield-Smith (2003) that trust is important in situations where risk is involved is in line with the case company. Since this risk, procedures and rules are implemented and observed by an external organization to minimize the uncertain situations. The case company described the importance of the relationship and state that, because the experience and time they are working together, the trust is increased in the IOR. This means that the length and positive experience has a positive influence on trust on the cooperation. In the lower levels of the organization trust becomes natural and employees are willing to take risks by bending some procedures. However, in the higher level of the case company, where fewer procedures are involved, employees have less trust the partner organization. They act strict to the appointments in the contract.

6. Conclusion

This case study provides insight in the trust and control in an inter-organizational relationship. Although a lot of research is done on these concepts, there was nothing written in existing literature on how cultural control systems could have influence on trust. This case study provided insight in the three cultural aspects of Malmi & Brown (2008) that seems to have influence on trust in an IOR. This research adds information that can be used to extend existing literature. In the theoretical framework, Barringer & Harrison (2000) described that most alliances failed because they did not have the right fit between the different components of culture. Looking at these components, Malmi & Brown (2008) specify three cultural aspects that influence an organization. According to Barringer & Harrison (2000), these three aspects of the organization should fit with the partner organization to make the alliance to a success. In practice, results show that some aspects of culture have less influence on the strategic alliance than others. In this case study it seems that risks that are minimized by procedures and processes had a major influence on the culture of the cooperation. This example of symbol control causes fewer probabilities of common agreements or appointments that are based on trust. However, results showed that positive experiences and the length of the cooperation had a positive influence on trust within the cooperation. Besides the fit that takes care of the organizations success, the length of the cooperation seems to have a major influence as well. Because of the history between the organizations, contact is informal and people act in favour of the organizations to make the cooperation a success. These implications for practice can be helpful to coordinate an organization and make the cooperation to a success.

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Appendixes

Introduction

1. What is your position in the organization? Former study and career? 2. How many years are you in this function?

3. How many employees are you coordinating? 4. What is your function in the alliance?

Cooperation

5. How often do you collaborate with other organizations? 6. How do you choose the organization where you work with?

7. Does it make a difference if you worked with the organization before? Does this make a difference?

8. What did you expect from this collaboration beforehand? Does organizations meet the expectations?

Trust

9. How important is trust in your organization and how would you define this? 10. What are the risks of this cooperation?

11. Do you place every appointment in the formal contracts or can you trust other corporations based on verbal appointments?

12. How much do you depend on the collaboration? Control

Clan control

13. With what people do you have the most contact in the collaboration? Why?

14. Do you think the collaboration is fine now or could something be improved? How? 15. How much differences are there between how often people work together?

16. Why do specific people work together or not?

17. In which way does employees work together with employees of organization B? Value control

18. How important are norms and values in your organization? 19. How does employees take this over? And how can you see that?

21. Does these norms and values influence trust between the collaboration? How? Symbol control

22. How is the relation between different layers or divisions in the organization? 23. How important is authority in the organization? How can you see this?

24. How do you experience commands you get from people you work with? Where does this feeling come from?

Appendix B – Interviews

Date Function Time

19-12-2016 Manager Purchases Headquarter 50 minutes

19-12-2016 Senior contract manager Headquarter 40 minutes

21-12-2016 Shift leader Groningen 40 minutes

22-12-2016 Shift leader Utrecht 50 minutes

22-12-2016 Shift leader Leeuwarden 40 minutes

23-12-2016 Manager Gaming Service & Analysis Rotterdam 70 minutes

26-12-2016 Shift leader Leeuwarden 60 minutes

Appendix C – Secondary data

BIJLAGE 4 - INTEGRITEIT

De afdeling Inkoop sluit zich maximaal mogelijk aan bij de beroepscode van de Nederlandse Vereniging van Inkopers.

Alleen een beroepsgroep waarin betrokkenen zelf en de samenleving in het algemeen vertrouwen hebben, zal haar maatschappelijke bijdrage kunnen rechtvaardigen.

Dit betekent dat een Contractmanager alleen met een voldoende basis van vertrouwen en integriteit de inkoopfunctie op een professionele wijze kan uitvoeren. Contractmanagers binnen de afdeling inkoop rouleren minimaal om de 2 jaar van commodity en categorieën.

De beroepscode is uitgewerkt in de volgende paragraaf. De richtlijnen gelden binnen X voor eenieder die een rol heeft in het inkoopproces.

De beroepscode

Voor een verantwoorde uitoefening van de inkoopfunctie zijn de volgende vier uitgangspunten (I t/m IV) onmisbaar. Deze uitgangspunten hangen uiteraard in bepaalde gevallen sterk samen.

Ieder van de vier uitgangspunten wordt uitgewerkt in enkele richtlijnen die als toets kunnen dienen voor het doen en laten van vertegenwoordigers van X.

I. Loyaal zijn ten opzichte van X

De X medewerker dient het ondernemingsbelang (in plaats van persoonlijke

belangen of gevoelens) als uitgangspunt te nemen bij de uitoefening van de inkoopfunctie.

Daarmee dient hij tevens het belang van de afnemers van producten en diensten van de onderneming. a. Persoonlijke belangen, die mogelijk strijdig zijn met ondernemingsbelangen, dienen door de X

medewerker uit eigen beweging te worden gemeld aan zijn leidinggevende.

c. Alle middelen en bronnen van informatie die de X medewerker ter beschikking staan vanwege het dienstverband met de onderneming dienen enkel in het ondernemingsbelang te worden gebruikt.

d. Betrokkenheid van de X medewerker bij het accepteren of bedingen van gereduceerde prijzen bij leveranciers voor producten of diensten voor persoonlijk niet zakelijk gebruik door de medewerkers is alleen toelaatbaar met instemming van de onderneming.

II. Leveranciers rechtvaardig behandelen

De X medewerker dient een positieve relatie met leveranciers te onderhouden, waarbij ook de belangen van de leverancier in het oog moeten worden gehouden.

a. De X medewerker dient alle leveranciers van correcte en niet-misleidende informatie te voorzien.

b. De X medewerker mag leveranciers niet onder druk zetten om informatie over concurrenten te verstrekken.

c. De X medewerker dient de leverancier duidelijk te wijzen op de mogelijke consequenties wanneer hij voor een onverantwoord groot deel van zijn omzet afhankelijk wordt van de inkopende onderneming.

III. Eerlijke concurrentie ondersteunen

Relevante leveranciers moet een gelijke mogelijkheid worden geboden om mee te dingen naar opdrachten.

a. Prijs-, product- en proces technische informatie die tijdens het uitoefenen van de inkoopfunctie verkregen is van leveranciers dient vertrouwelijk te worden behandeld.

b. De X medewerker dient alle potentiële leveranciers van gelijke informatie te voorzien.

c. Leveranciersselectie dient primair te geschieden op basis van objectieve criteria en dus niet op grond van persoonlijke voorkeuren.

IV. Reputatie van de professie hoog houden

Een reputatie van betrouwbaarheid is noodzakelijk voor het functioneren van de Contractmanager. a. De X medewerker dient te allen tijde het hoogst mogelijke niveau van deskundigheid na te

streven.

c. De X medewerker dient, waar mogelijk, een bijdrage te leveren aan de bevordering van de kwaliteit en het aanzien van de inkoopfunctie.

Tot slot:

Iedere X medewerker draagt de verantwoordelijkheid om al zijn handelingen in

Appendix D – List of coding

Type of code Sub-code

Culture Risk

Clan control Length of cooperation

Informal contact Intertwined Other

Value control Recruiting

Hospitality Image Other

Symbol control Hierarchies