MASTER THESIS
The role of trust and control in the
development of positive expectations
by
ZORANA VOS
University of Groningen
Faculty of Economics and Business
Msc BA Organizational & Management Control
23 June 2014
Heymanslaan 8a
9714 GK Groningen
Student number: s1868292
Phone: +31642934344
E-mail:
zorana.vos@gmail.com
Supervisor: Drs. R.A. Minnaar
2
ABSTRACT
It is widely recognized in theory that trust and control are in some way related to each other. In practice, trust and control are important elements within a relationship between two parties, if between equal parties or unequal parties. In this thesis the connection between trust and control is examined in a relationship between superiors and subordinates within an organization. The findings of the case study imply that the trust/control relationship can take on several forms, depending on the situation. It is argued that the most convenient way to look at the trust/control connection in an intra-firm relationship is by viewing it as a dualism, in which the two elements are parallel and their relationship is open ended. The dualism perspective allows for a clear understanding of how trust and control behave independently, but also how they relate to each other.
3
1. INTRODUCTION
In the field of management accounting and sociology, there has been a growing debate about the relationship between trust and control. It seems that both concepts are related to each other, but it is unclear how trust and control coexist and what the relevant elements are in this relationship. A reason for this may be that there is no universally accepted definition of each individual concept (Rousseau et al., 1998). On the one hand, some authors define trust as “ the willingness to be vulnerable to the actions of another party” (Mayer, Davis & Schoorman (1995); Rousseau et al., 1998), while others describe it as having positive expectations about another’s motives (Das & Teng, 1998; Emsley & Kidon, 2007). On the other hand, control has also been described as an “elusive” concept (Möllering, 2005). For instance, Tomkins (2001) explains control as a tool to reduce the uncertainty of a partner’s behavior, whereas Leifer and Mills (1996) characterize control as a process to achieve desired objectives. Viewing these distinctive definitions, it may come as no surprise that several perspectives have also been taken on the connection between trust and control.
Up until now, there are some known perceptions that characterize the relationship between the two concepts. Namely, 1) trust is a form of control, 2) trust and control are complements, and 3) trust and control are substitutes. The first connection implies that when there is trust, there is no loss of control (Ring & Van de Ven, 1992), whereas the second connection means that both concepts add up to each other (Tomkins, 2001). The third perspective on the trust/control nexus includes that trust and control are somewhat interchangeable (Leifer & Mills, 1996; Inkpen & Currall, 2004; Rousseau et al., 1998). Nevertheless, a wider interpretation of the trust/control connection could be made, where trust and control act as supplements to each other, which leaves the relationship between the two concepts open ended (Das & Teng, 1998). This means that trust and control can be complements, substitutes, one being a form of another, or even something different.
However, more recent studies suggest that, instead of complementing or substituting, trust and control interact with each other (Vosselman & Van der Meer-Kooistra, 2009). This perspective goes beyond the static image of the trust/control connection and takes on a dynamic
interrelatedness; trust needs and produces control and control needs and produces trust
(Vosselman, Van der Meer-Kooistra, 2009). This view is supported and extended by Möllering (2005), who labeled this interactive relationship between trust and control as ‘the trust/control duality’. This duality perspective implies that trust and control should not be regarded as two distinct entities that have a connection, the so-called ‘dualism’ perspective (Möllering, 2005). Rather, the author
recognizes that control cannot exist without trust and trust cannot exist without control when forming the basis of positive expectations (Möllering, 2005).
4
universally accepted definition of the relationship between the two concepts that can be applied in both theory and practice. Therefore, the purpose of this thesis is to further investigate the
connection between trust and control in order to gain more insight in the matter. A theory
development research approach is used of which the aim is to empirically examine the relationship between trust and control within an intra-firm case study. For this thesis the following research question is posed: “How does the connection between trust and control play a role in the formation of positive expectations within an intra-firm relationship?”
5
2. LITERATURE REVIEW
In this section, the existing definitions of trust and control as well as the relationship between the two concepts are outlined. In addition, comparisons between the different views on the trust/control connection are made.
2.1 Trust
As explained in the introduction, trust is a rather ambiguous concept of which the definition is not evident yet. It seems that it can be interpreted from various research fields (Volery & Mensik, 1998). For instance, the economists believe that trust should be explained in calculative terms as “the probability that trust is betrayed by self-interested individuals” (Emsley & Kidon, 2007).
Psychologists, on the other hand, view trust in terms of the individual attributes of two or more actors, and sociologists explain trust as a social property that is embedded in an individual (Rousseau et al., 1998). Building further on the sociologists’ approach, Moorman et al. (1993) describe that trust is an expectation about the trustworthiness of the trustee, where expectation can be linked to positive intention (Das & Teng, 1998). This view is supported by other authors, who describe trust as the “willingness to accept vulnerability” (Vosselman & Van der Meer-Kooistra, 2009; Mayer et al., 1995; Rousseau et al., 1998), for which positive expectations serve as the input (Vosselman & Van der Meer-Kooistra, 2009). Specifically, trust indicates the “the willingness of the trustor to be vulnerable to the actions of the trustee based on the (positive) expectation that the trustee will perform a particular action important to the trustor” (Mayer, Davis & Schoorman, 1995). The concept of trust thus includes multiple aspects: positive intentions, expectations, and vulnerability, but also risk. Risk is implicitly present within the definition of trust, since trust is associated with expectations that lie in the future (Das & Teng, 2004). Future states are undoubtedly uncertain and therefore consistently entail a risk factor. Furthermore, the willingness to be vulnerable also implies that there is risk involved (Mayer et al., 1995). That is, if an individual shows vulnerability, there is a risk that this person could be harmed (Nooteboom, 2002; Inkpen & Currall, 2004) by the
opportunistic behavior of the partner (Ring & Van de Ven, 1992). However, Tomkins (2001) claims that trust enables individuals “to act as if the uncertainty is reduced, although the actual uncertainty is not reduced”. Hence, when we trust someone we believe that we can reduce risk by making the situation more clear and certain for ourselves, while in reality the amount of risk is just as much as before we decided to trust the other.
6
intentional trust, also called goodwill trust (Langfield-Smith & Smith, 2003) indicates the trust that an individual has in the intentions of another individual towards the relationship (Dekker, 2004;
Woolthuis et al., 2005). It is associated with the integrity, responsibility, and dependability of the trustor and trustee (Das & Teng, 2001; Langfield-Smith & Smith, 2003) that express the value of another person’s interests next to one’s own interests (Das & Teng, 2001). A necessary condition for goodwill trust is personal embeddedness (Ring & van de Ven, 1992). Next to competence trust and intentional trust, Langfield-Smith & Smith (2003) add contractual trust, which they refer to as the assumption that one party will uphold the written or verbal agreement with the other party (Langfield-Smith & Smith, 2003).
Other forms of trust are identified by Rousseau et al. (1998) and Maguire et al. (2001). The first form, deterrence-based trust, holds that costly sanctions are placed upon the breach of trust (Rousseau et al., 1998). This means that a partner will be less inclined to show opportunistic behavior and thereby harm the other (Ring & Van de Ven, 1992; Rousseau et al., 1998). Second, calculus-based trust involves an “ongoing calculation of the predictability of others’ behavior” where actors are treated as rational beings (Maguire et al., 2001). This implies that actors can calculate and predict each other’s behavior by having all the costs and benefits associated with behavioral options in mind (Maguire et al., 2001). Trust develops when the trustor predicts positive behavior of the trustee, which is based on deterrence and “credible information regarding the intentions or competence of another”, such as documents that prove one’s knowledge and capabilities (Rousseau et al., 1998). Third, knowledge-based trust includes an “ongoing confirmation of the predictability of others’ behavior” (Maguire et al., 2001). This type of trust develops when an individual observes a consistent pattern in the behavior of another individual and expects it to progress in a similar fashion (Maguire et al., 2001). Last, identity-based trust, also called relational trust, involves the “internalization of actors’ desires and intentions” (Maguire et al., 2001), which is achieved by repeated interactions between trustor and trustee (Rousseau et al., 1998). Moreover, dependability and reliability in these repeated interactions may result in the evolvement of positive expectations between the two actors (Rousseau et al, 1998). Regarding the features of this type of control, it is evident that relational trust is closely related to goodwill trust. The elements of personal embeddedness, dependability, and reliability appear in both trust forms.
To continue, Woolthuis, Hillebrand and Nooteboom (2005) and Vosselman and van der Meer-Kooistra (2009) explain the notions of thin trust and thick trust. Thin trust is based on “compensation for negative behavioral expectations without producing positive behavioral
Meer-7
Kooistra, 2009). On the other hand, thick trust refers to the creation of positive behavioral
expectations (Vosselman & van der Meer-Kooistra, 2009) within personal relations (Woolthuis et al, 2005). An example of thick trust is goodwill trust (Vosselman & van der Meer-Kooistra, 2009), which is mentioned earlier in this section. Hence, thick trust is a sort of extension of thin trust with an orientation toward the characteristics and future behavior of the trustee (Vosselman & van der Meer-Kooistra, 2009).
Besides forms of trust, early research has also recognized factors or antecedents that lead to trust and these are the characteristics that the trustee should possess. For instance, Mayer et al. (1995) claim that there are three major characteristics of a trustee that contribute to the
development of trust between two parties. Ability, the skills, competencies and knowledge of an individual, may influence his trustworthiness in a specific area (Mayer et al., 1995), such as a job in ICT. This trust factor could be related in the previously mentioned competency trust, in which the trustor lays its trust in the abilities or competencies of the trustee (Woolthuis et al., 2005). Another factor that supports trustworthiness is benevolence (Mayer et al., 1995), which means: the belief that one party acts in the best interest of the other party. It is a “perception of a positive orientation of the trustee toward the trustor” (Mayer et al., 1995). The third condition of trustworthiness is integrity. Integrity implies that the trustor regards the trustee to comply with the rules and values that are important to the trustor (Mayer et al., 1995).
2.2 Control
As well as trust, control is another concept that induces multiple interpretations. It can be described as an “arrangement to determine and influence what (organizational) members do” (Fryxell et al., 2002). Another theory treats control as a tool to reduce uncertainty of an actor’s behavior (Tomkins, 2001; Emsley & Kidon, 2007). Moreover, the concept could be interpreted as a process in which the elements of a system (or relationship) are made more predictable (Das & Teng, 1998; Leifer & Mills, 1996). This process includes interaction between two or more individuals, for example superiors and subordinates, and may change over time (Jordan & Messner, 2012) When combining these two views, it can be stressed that by exercising control, one is able to influence another’s behavior and thereby reducing the uncertainty of this behavior by making it more predictable.
8
influences the other in a way that results in the satisfactory achievement of the individual’s objectives (Inkpen & Currall, 2004). Behavioral control relates to the reduction of uncertainty by implementing behavior boundaries (Das & Teng, 2001; Emsley & Kidon, 2007), which are constantly monitored (Dekker, 2004). On the other hand, informal control, also called social control or
normative control (Leifer & Mills, 1996; Maguire, Philips & Hardy, 2001), is associated with informal cultures (Dekker, 2004), including shared values and beliefs that influence individuals (Emsley & Kidon, 2007; Langfield-Smith & Smith, 2003) through structured personal interaction (Fryxell et al., 2002).
Ouchi (1979) subdivided formal and informal control in so called ‘organizational control mechanisms’: market mechanisms, bureaucratic mechanisms, and clan mechanisms. In a market form of control, information that is needed for efficient decision making is contained in prices (Ouchi, 1979). Here employees are rewarded in direct proportion to their performance (Ouchi, 1979). A bureaucratic mechanism involves “close personal surveillance and direction of subordinates by superiors” (Ouchi, 1979). Information is enclosed in rules within the company and performance of employees is determined by performance standards which are closely monitored by superiors (Ouchi, 1979). In this situation, employees must permit this close monitoring, otherwise they may perceive the superiors as being too controlling and thereby productivity may suffer. These two organizational control mechanisms could be related to formal control. The third control mechanism, clan control, could be related to informal control. Whereas the information for decision making of market and bureaucratic mechanisms is enclosed in prices and rules, in a clan mechanism
information is included in values, beliefs and traditions (Ouchi, 1979). A clan mechanism relies upon “a deep level of common agreement between members on what constitutes proper behavior, and it requires a high level of commitment” (Ouchi, 1979). Here, socialization processes and social
agreements are important bases of control since task-related behaviors and outputs are not predetermined (Das & Teng, 2001).
9
standardized operation procedures, and routines (Ahrens & Chapman, 2004). Coercive,
remunerative, and cybernetic control are all formal types of control (Maguire., 2001). On the other hand, enabling control implies that employees generally perceive control as positive because it enables them to perform their jobs more effectively (Adler & Borys, 1996; Wouters & Wilderom, 2008). It designs organizational rules that add up to the intelligence of the employees (Ahrens & Chapman, 2004) and thereby it reinforces employees’ commitment (Adler & Borys, 1996).
Another perspective on control is posed by Simons (1995). This researcher relates to formal control and has introduced four control systems which he calls ‘levers of control’. These are beliefs systems, interactive control systems, boundary systems, and diagnostic control systems (Simons, 1995). The first two levers relate to enabling control. That is, they create positive and stimulating influences. Beliefs systems are used to stimulate the search for new opportunities, whereas interactive control systems are used to stimulate organizational learning and the development of new -innovative- ideas (Simons, 1995). The other two levers of control, boundary systems and diagnostic systems, can be assigned to coercive control. Boundary systems are used to set limits on the search for new opportunities, whilst diagnostic control systems are used to “motivate, monitor, and reward achievement of specified goals” (Simons, 1995). Both levers generate constraints and imposes compliance with organizational rules (Simons, 1995).
In their turn, Woolthuis et al. (2005) distinguish strong and weak control, where weak control represents “any instrument or condition that may mitigate relational risk”, and strong control is based on power. Other forms of control, objective control and self-management, are presented by Leifer and Mills (1996). They explain objective control as “an external mechanism that is observable and which serves to assure that actions conform to measurable standards” which is based on rules, hierarchical surveillance, and evaluation (Leifer & Mills, 1996). Workers’ behavior is constrained by these rules and evaluations. (Leifer & Mills, 1996). This type of control is related to Ouchi’s (1979) bureaucratic mechanism. Self-management or self-control refers to the personal value system and personal preferences of the environment (Leifer & Mills, 1996). Self-management “attempts to induce a value or belief change” and it emerges when the individual’s behavior is consistent with organizational goals (Leifer & Mills, 1996).
10
2.3 The relationship between trust and control
While there are many inconsistencies in the literature concerning the individual concepts of trust and control, it is evident that the relationship between the two is also subject to differing views. For example, Ring and Van de Ven (1992) argue that trust is a form of control. They explain that when trust, which is built over time, is present in a relationship between two parties, there is no loss of control. Other notions about the trust/control relationship are trust and control as complements and trust and control as substitutes. As complementary, the relationship between the two concepts indicates that more control leads to more trust and vice versa (Tomkins, 2001), but also that formal control can positively affect trust (Dekker, 2004; Emsley & Kidon, 2007). In this case, people who trust each other are more willing to provide accurate information and this facilitates control (Zand, 1972). Mouritsen and Thrane (2006) support the complementary connection by proving that trust is created when management control practices are appropriate. They consider control and trust as constructive forces in a relationship or network (Mouritsen & Thrane, 2006). Regarding trust and control as substitutes, on the other hand, researchers believe that when there is more trust, there is less control and conversely (Zaheer & Venkatraman, 1995; Das & Teng, 1998; Inkpen & Currall, 2004). Rather, trust replaces certain types of control; when trust is present, there is less need for a control mechanism (Leifer & Mills, 1996; Inkpen & Currall, 2004; Rousseau et al., 1998). This is because an increase in trust leads to a decrease in opportunism, which in turn decreases the need for control and vice versa (Edelenbos & Eshuis, 2011). For example, detailed contracts are less necessary when there is trust between two parties (Rousseau et al., 1998).
Das and Teng (2001) states that formal control may undermine trust, because the
implementation of rules and objectives may result in less autonomy of organizational members. This statement is supported by Dekker (2004), who indicates that when formal controls are used
extensively, relational trust may be harmed as a result. In addition, active use of formal control may cause conflict, opportunism, and defensive behavior, which in turn may require more coercive control in order to restrict this behavior (Woolthuis et al., 2005). The previous statements are
11
It appears that there is a certain interplay between trust and control, where the amount of trust between actors depends on the type and amount of control that is exercised. Dekker (2004) explains the existence of a threshold of control. Below the threshold “formal controls may be complementary and enhancing to trust” and above the threshold formal controls may damage trust (Dekker, 2004). In their research, Langfield-Smith and Smith (2003) describe trust based patterns of control, which are outcome and social controls that are achieved over time by means of trust. They found that control is achieved “through the development of outcome and social controls and through the development of goodwill trust” (Langfield-Smith & Smith, 2003).
In one of their early research, Das and Teng (1998) proposed a more open ended perspective on trust and control. The authors indicated that trust and control are parallel concepts, but they are “not completely independent in the sense of being isolated from each other” (Das & Teng, 1998). They describe the relationship between trust and control as flexible and supplementary, implying that it can take on any form, if complementary, substitutable, trust being a form of control, or any other form that may have not been identified yet (Das & Teng, 1998).
12
13
3. METHODOLOGY
In this section, the methods that were used to conduct this study are described and explained. This thesis contains a theory development process of which the aim is to generate knowledge (Van Aken et al., 2012). This particular research process follows the steps that are illustrated in figure 3.1 below.
Figure 3.1 The theory-development process (Eisenhardt, 1989)
As shown in the first step, the basis for theory development is the identification of a business phenomenon that is generally recognized, but “has not been addressed in academic literature or when the literature related to the business phenomenon is exploratory in nature” (Van Aken et al., 2012). In this thesis, the business phenomenon includes the unclear definition and application of the relationship between trust and control. The second step requires the observation of the business phenomenon in practice, which are then analyzed and evaluated in order to gain deeper insights of the matter (Van Aken et al., 2012). Next, the insights gained in the second step are compared with the existing theory in order identify for differences between the findings (Van Aken et al., 2012). Finally, distinctive insights are used to formulate propositions and implications for further research (Van Aken et al., 2012).
3.1 Literature review
Regarding the first step of the theory development process, this thesis starts with a description of what has already been written about the main topics in order to gain more knowledge of the different concepts, as well as to discover what phenomena have not yet been investigated in literature. Previous research and theories concerning the topics trust and control were acquired by accessing data bases such as Business Source Premier and Science Direct, but also Google Books. Preceding the literature review, the required information was roughly determined. Both the
definitions and types of trust and control needed to be clarified, as well as the relationship between the two concepts. Hence, the aim was to search for theories that covered this information. In order to find relevant literature, the following search terms were used: “control”, “trust”, “trust and control”, and “the relationship between trust and control”. During the search, it appeared that a some articles were frequently cited. Authors such as Ouchi (1979), Das & Teng (1998, 2004), Tomkins
Propositions that are changes or additions to existing theories Develop explanations while comparing findings with existing theories Observation of phenomenon in one or more case studies
Business
14
(2001), and Dekker (2004) recurred in several articles, indicating that their contribution to the trust and control literature is important. These and literature from other authors were used in the
literature section of this thesis to provide an overview of several different insights regarding the main topics.
3.2 Data collection
In order to collect useful data, the second step of the theory development process was conducted. This study used an interpretive, qualitative research approach. Qualitative research is particularly suitable to provide insights in the subjectivity and authenticity of human experience (Silverman, 2009), including opinions, beliefs, emotions, and relationships between individuals (Mack et al., 2005). This type of research cannot be programmed, nor can all problems be anticipated: there is always some uncertainty and unexpectedness involved (Hammersley & Atkinson, 2007). An interpretive approach of research “emphasizes the essentially subjective nature of the social world and attempts to understand it primarily from the frame of reference of those being studied” (Hopper & Powell, 1985). Reality is seen in terms of individual consciousness and every realization of the world is unique, although this realization is to some extent also experienced by others (Hopper & Powell, 1985). Individuals “constantly create their own social reality in interaction with others” (Hopper & Powell, 1985). In addition, The understanding of the behavior of others is attained through a process of interpretation. Hence, the aim of an interpretive research approach is to analyze social realities and how they emerge (Hopper & Powell, 1985). In order to generate theory, Eisenhardt (1989) suggests that case studies should be used. A case study is “a research strategy which focuses on understanding the dynamics present within single settings” (Eisenhardt, 1989). Hence, it explains the causal relationships in real-life interventions and it clarifies situations in which the evaluated intervention has no clear outcomes (Yin, 2009).
15
minutes. Two different interview schemes with open-ended questions were used to interview the two respondent levels. Open-ended questions and the use of probing enables the participants to express their opinion and views and to respond in more detail (Van Aken et al., 2012). This provides answers of a more exploratory nature (Mack et al., 2005). Both interview guides consisted of five different categories. The first category included general questions about the activities of the respondent and the work pressure that he or she experiences. The second category focused on the specific targets of the company and the way in which they are reached and communicated. The third category covered the existing control systems, their function, and how they are viewed by managers and employees. The fourth category concentrated on the performance of the employee and the meetings between manager and employee. The last category entailed the expectation of managers towards the employees and vice versa. The complete interview scheme that has been used can be found in the Appendix.
3.3 Data Analysis
Concerning the third step of the research process, the transcribed interviews were analyzed by using Dedoose (version 4.12.4), an online cross-platform application for analyzing qualitative research. A mix of inductive and deductive coding was employed to make use of the available literature, but also to allow research findings to emerge from the frequent, dominant or significant themes inherent in the data (Thomas, 2003). First, the data was thoroughly read to identify specific segments of
information regarding trust and control. Subsequently, these segments were coded in order to create categories (Creswell, 2002). Overlapping categories were merged to create a representative amount of categories, which ensure both completeness and comprehensibility (Creswell, 2002).
Consequently, the data was divided into two root codes, managers and employees, to create a clear distinction between the respondent groups. Next, elements from important quotes were highlighted and linked to a suitable child code. As the process of analyzing went on and new corresponding information was selected, the child codes were adjusted and extended. Then, by repeatedly reading over and interpreting the responses of each group, the codes were altered until coherent
connections between the data could be determined. Ultimately, five child codes were added to each root code: control, control systems, characteristics of the manager, characteristics of the employee, and the relationship between manager and employee. To some of the child codes a few sub codes were added to clarify the information derived from the interviews. When the coding process was finished, the results were outlined in a separate section. The results section consists of the main subjects trust, control, and the trust/control relationship. Within each subsection, the most recurring elements that were mentioned by the interview participant are described.
16
17
4. RESULTS
In this part, the observations and outcomes of the case study are described and clarified. First, some background information about the case company is given as well as an illustration of the extant control systems. The remainder of this section is divided into three parts, in accordance with the key concept of this thesis: control, trust, and the relationship between trust and control. Within each section, the most relevant findings of both respondent groups are outlined and clarified. In the last part, connections and potential interpretations between the ideas and opinions of managers and employees are described.
4.1 Case description
18
the systems that enable malicious employees to misuse them and to thereby manipulate their performance. This misusage can only be noted by colleagues or by the manager. Namely, next to computer-based monitoring, managers use human observation and monitoring to determine how the employees perform their jobs. Furthermore, they have the opportunity to sit next to the employee and tap into the conversation in order to determine the quality of the service that is provided by the employee. In addition, every month a BILAT (in full: bilateral) is planned. This is an informal one hour meeting between manager and employee and serves to get an insight into the wellbeing of the employee and the interests of the manager.
4.2 Control
From the viewpoint of both managers and employees, control is necessary to get an objective view of the performance of the employees. The control systems provide an insight into the work conduct by making performance measureable. As one manager explained:
“The control systems serve to measure effectiveness. They are more of a guideline to identify how the average person performs and what the outliers are”
Thus, the control systems administer the performance of all team members and this allows managers to compare the achievements of every individual in the team and to see which person outperforms or underperforms. Besides that, the managers are able to view the general performance of the team, which they can compare with the performance of other teams. Although the employees are
frequently monitored, the respondents stated that the control systems are not used to simply control them. Instead, the control systems must be regarded as part of the job, since they enable the managers to make the team manageable. No control means no insight and no insight means no possibility to guide. Yet, one of the employees pointed out that the degree of control that is
acceptable depends on the size of the company. This case concerns a large sized company with many hierarchical layers and different branches. Within a large company, one cannot know every
colleague, whereas in a small company, it is easier to get in contact with the members of the organization. Subsequently, control systems are much more necessary for the former than for the latter, according to some of the respondents.
However, the whole employee respondent group also indicated that too much control is not desirable and creates an uncomfortable atmosphere. They claim that excessive use of control on performance is constraining them in doing their job. Instead, they require attention on their
19
achievement of targets. It varies per person which KPIs are reached easily and which require more effort. The respondents believe that managers should take those strengths and weaknesses into account when monitoring their performance. This is supported by the following interview fragment:
“Everyone has his own thing, own strengths. […] One colleague is better at things than the other. It differs per person. I think that that could be taken into account more.”
Thus, although there is an understanding regarding the existence of control systems and their function, the way that the actual control is exercised by managers requires a different approach. Several employees stated that the objective data that control systems generate is not enough to get a clear picture of the employees’ work. Therefore, personal involvement from the managers is needed to be able to interpret the data correctly and to find the underlying meaning of the
performance numbers. Nonetheless, to allow managers to be personally involved, another element is required, namely trust.
4.3 Trust
Throughout the interviews, the idea that it is important how control data is interpreted and communicated to the employees was frequently mentioned. Personal subjectivity next to data objectivity is essential in determining the specific performance of employees and in identifying what the antecedents of the performance are. All respondents agreed that every manager should be personally involved with his workers. This feature implies that managers take or should take into account the characteristics, personal situation, and performance of each individual worker to which they can adjust their management style. As a manager revealed:
“I also look at what the employee needs personally. For example, if things do not go well at home, then we can talk about it and possibly change the schedule/tasks/work hours”
Hence, managers should be involved with the members of the team, both personally and
businesslike. The respondents indicated that, on the one hand, managers should know what is going on in the minds of the personnel by constantly staying in contact with them. On the other hand, they should know the strengths and weaknesses of the employees so they can take those into account in interpreting the performance of the workers. It is important for the managers to constantly keep in mind that every employee is different. Based on that information, they can develop a customized approach in guiding the employees towards good performance. In the process, clear communication, feedback, and appreciation from the manager’s side are necessary, according to most of the
20
Nevertheless, in order for managers to be personally involved, some effort from the
employee side is needed as well. The managers indicated that they value openness and honesty from their workers. They believe that personal life and work life cannot be fully separated, which is also recognized by the employees. If things do not go well in one’s personal life, it will most probably have an influence on work and this should be handled. When the employee is honest and open in his communication towards the manager, the manager is able to help the employee in order to maintain or improve performance. Yet, openness and honesty call for trust. This is supported by the following response:
“The foundation is obviously that you have a good trust relationship with someone. When the foundation is not good, I think you miss many sides of a person. You have to give someone the possibility to dare to show vulnerability. […] I recognize trust when people tell stories about private situation and then I notice that they dare to open up. You need a trust relationship for that.”
This quote shows an important idea: personal information is only shared when there is a trust relationship present. An employee is willing to open up to the manager when he or she trusts the manager. Hence, openness and honesty is a signal of trust. This idea was also implicitly present within the responses of other interview participants. Next to openness and honesty, the superiors indicated that an important characteristic of the employee is responsibility. They believe that employees should take responsibility for their own work. This implies knowing one’s own
performance, but also taking action when the efforts are not enough to reach the targets. Taking responsibility also involves proactivity in the sense of working hard and taking initiative in improving one’s own work. If the employee does not have the right tools to improve, the managers expect them to point this out.
Thus, when performance has been measured, both managers and employees are required to behave in a certain way in order to find the underlying meaning and cause for certain performance. The role of the superiors is to be personally involved with their workers by knowing their wellbeing at both the workplace and home. The role of the employees is to be responsible for their work by, among other things, being open and honest about their wellbeing. A manager cannot be personally involved when the employee does not share his or her thoughts and opinions, hence there should be a degree of trust present within this relationship. When the employee trusts his manager, he is more willing to share personal information. In turn, the manager may guide the employee towards
21
4.4 The relationship between trust and control
As mentioned in the previous sections, all respondents acknowledged that control and control systems are necessary to manage the company. Specifically, control systems provide an insight into the performance of employee and enables managers to compare performance, measured in numbers, within their own team and between their team and other teams. However, it is important how the performance is interpreted and communicated to the employees. The way in which
managers exercise control is essential for the occurrence of trust. Hereby the expression of personal involvement is required. According to a manager:
“The original pattern is very much focused only on the numbers, core values and agreements. However, I find it important: how is someone doing? How is someone doing at work?”
As explained earlier and as mentioned in the preceding citation, personal involvement is associated with the wellbeing of the employee, both at work and at home. Since the respondents indicated that work life and private life cannot be separated, there must be a way to balance the two in order to maintain good performance. Personal involvement might be both an informal control tool and an expression of trust to find that balance. Informal control, and personal consideration in particular, involves trust. Namely, for the manager to be personally involved with the worker, openness from the worker, which is a sign of trust, is required. Hence, it appears that trust and control are important elements that are present within the manager/employee relationship. Nevertheless, trust continues to exist along with the presence of formal control. One of the workers pointed out the following:
“It [the control system] measures what the employee does. It is not a measurement to determine if you do your work well, it is a measurement of what you do. From that, you can construe a lot, but it is in the first instance not a control system to see if the employees do what they are instructed. That is a matter of trust.”
22
Trust is then necessary to fill the control ‘gap’. Nevertheless, some respondents indicated that there has been fraud in the past and that employees were fired because of it. Therefore, control is
necessary to make sure that bad performance or misleading performance is monitored and improved or punished. It seems like a tool to exclude the risk that an employee acts inappropriately.
However, as specified earlier, too much control is undesirable. Employees do not like to be constantly monitored and evaluated, because they will then get the feeling that they are not being trusted. As another worker stated:
“I have the feeling that I have to continuously explain, every second, what I am doing and why. […] There should be more freedom and eye for the employee; what they do well instead of only focusing on numbers”
Too much control will lead to a distressing atmosphere in which employees feel controlled and constrained. This negative association with control may decrease motivation as well as influence performance unfavorably, according to the employees. Thus, in order for the employees not to feel controlled, the managers need to provide freedom and consideration to the employee. Room must be made for employees to perform their working tasks in a way that best suits them. Put differently, the employees need space to show the responsibility that is required of them. When performance is bad at a certain point, the subordinates should get the opportunity, or freedom, to come up with a proper solution to improve performance. This is also what the managers indicated to be an essential characteristic of the worker.
23
5. DISCUSSION
In this section, the findings from the case study are compared with the existing literature to develop possible linkages and to provide insightful information about the trust/control nexus. The first subsection includes the relationship between trust and control as found in the case study. In the second section the findings from the case study are compared with the interactive or duality perspective as proposed by Vosselman and Van der Meer-Kooistra (2009) and Möllering (2005).
5.1 The relationship between trust and control
Following from the previous sections, there are some links between the case findings and literature findings that can be identified. The respondents illustrated certain circumstances in which trust and control seemed to behave in a particular way. It seems as if the relationship between trust and control is dependent on the situation in which it occurs; the state of the relationship changes when another situation presents itself. The first situation includes the way that control is viewed in general and how it is applied at the workplace. Respondents claimed that control is necessary to get an insight into the employees’ performance and that it is simply impossible to manage the company when control is absent. The control systems that are used by team managers are designed and implemented by higher management, without influence from lower hierarchical levels. Thus, these control systems may be regarded as formal control that, according to Dekker (2004) and Fryxell et al. (2002), includes formal mechanisms. Managers use these systems to monitor performance and to guide the employees based on this performance. This way of controlling gives the impression of a bureaucratic mechanism. Namely, the bureaucratic mechanism involves “close personal surveillance and direction of subordinates by superiors” (Ouchi, 1979). The specific type of formal control can be addressed as outcome control. This involves influencing behavior by specifying desired outputs and accurately monitoring members’ performance in the achievement of those outputs (Das & Teng, 2001; Emsley & Kidon, 2007). The specified outputs are the KPIs, which are the same for the entire department and are determined by higher management.
24
for personal involvement, which is, from the respondents’ point of view, essential for the managers in guiding the employees to achieve the targets. When the managers are informed about the wellbeing of their workers and are able to adjust their management style accordingly, the workers develop trust. The corresponding type of trust is goodwill trust, which is the trust that an individual has in the intentions of another individual towards the relationship (Dekker, 2004; Woolthuis et al., 2005). The subordinates believe that their superiors express good intentions when they show interest in them and when they are concerned with the wellbeing of the team members. In turn, a necessary condition for personal involvement is openness and honesty from the side of the workers, as stated by the managers. As noted earlier, it is a sign of trust from the employee to the manager when the employee shares his or her thoughts and opinions within the relationship. This is also related to goodwill trust, because the employee believes that the manager will positively receive the personal matters, which is a reason to share them.
From the above situation, it seems that formal control must be supported by informal control, of which the latter is the cause for trust building. This is also what Das and Teng (2001) as well as Fryxell et al. (2002) showed in their research. They pointed out that it is informal control that may breed trust by creating shared norms and objectives (Das & Teng, 2001; Fryxell et al., 2002). The informal interactions between manager and employee and the personal involvement from manager to employee results in both trust and control. Hence, it can be stressed that trust and control have a complementary relationship. Consistent with the findings of Tomkins (2001), the complementary relationship indicates that more control leads to more trust and vice versa. Hence, more personal involvement results in more trust from the employee and in more control for the manager.
Another situation includes the absence of control. As some respondents pointed out, the managers cannot always be present at the workplace. This may have to do with differing working hours, but also with holidays, illness, or other circumstances that cause the manager to be absent. The control systems continue to measure performance in the absence of managers, but as
mentioned in the case description, the systems have certain flaws which may enable employees to manipulate their performance in their favor. Manipulation is not possible when the managers are present, since they observe and monitor the tasks of the workers and pay attention to possible fraud. Hence, although the control systems constantly function, managers do not have the ability to
25
Smith, 2003; Woolthuis et al., 2005). Here, managers have trust in the capabilities of the employees to appropriately perform their tasks. Additionally, goodwill trust occurs because the managers deem the employees to be responsible for their work even when there is no supervisor present to monitor them. According to Das and Teng (2001) and Langfield-Smith and Smith (2003), responsibility and dependability are elements that are associated with goodwill trust. This implies that the
responsibility of the trustee, in this case the employee, is related to the dependability of the trustor, in this case the manager, who is dependent on the responsibility of the employee.
Regarding the relationship between trust and control in this situation, it seems that trust can be considered a form of control. As Ring and Van de Ven (1992) described, there is no loss of control when trust is present in a relationship between two parties. In other words, trust acts as control when actual control is absent. In this case the actual control is the manager who monitors employee performance and makes sure that the employee does not commit fraud.
A third situation involves the excessive use of control, as mentioned by the employee respondent group. They indicated that too much control, specifically formal control, creates a constraining and uncomfortable atmosphere that may negatively influence motivation and performance. This is also predicted by Dekker (2004), who claimed that when formal controls are used extensively, relational trust (along with goodwill trust) may be harmed as a result. When employees do not get the space that they need to successfully finish their work tasks and to maintain or improve their performance, they feel constrained. Managers need to provide a degree of freedom to the workers to give them a chance to be responsible. This is exactly what the manager respondent group pointed out in the interviews: employees are required to be responsible for their job. This implies knowing one’s own performance in numbers, but also taking action when efforts are not enough to reach the targets and performing tasks in an acceptable way. Hence, it seems to work on both sides: employees are required to be responsible for their work and manager should provide the opportunity to let them be responsible. Superiors develop trust when the employees show
responsibility and subordinates develop trust when the superiors provide the imperative freedom. Two different forms of trust can be identified here. The trust that superiors have is competency trust, because they trust in the ability and competences of the subordinates. It can also be addressed as goodwill trust, since it involves responsibility of the trustee, in this case the employee. The trust that subordinates have is also goodwill trust. Das and Teng (2001) clarified that in goodwill trust, the value of another person’s interests next to one’s own interests is expressed. In this case the superior acknowledges the interest of the subordinates, which is freedom.
Concerning the trust/control relationship in this situation, it is notable that trust and control exist in a different connection than in the previous situation. Namely, the trust and control
26
when there is more trust, there is less control and conversely (Zaheer & Venkatraman, 1995; Das & Teng, 1998; Inkpen & Currall, 2004). Here, more control involves less freedom, which results in less trust. The other way around, more freedom results in more trust, but involves less control.
From the preceding situations it can be concluded that every circumstance within the case company contains a different connection between trust and control in the development of positive expectations. Trust may be a form of control, or it may have a substitutable or complementary relationship with control. It seems that the perspective of Das and Teng (1998) on the trust/control nexus is useful to apply in an intra-firm relationship between managers and employees. They argue that trust and control are parallel, not completely independent, concepts and that their relationship is of a “supplementary character –flexible and open ended” (Das & Teng, 1998). This indicates that the relationship between trust and control can take on several forms, such as the forms mentioned earlier. The authors also state that trust facilitates the deployment of control mechanisms, although some of these mechanisms imply a lack of trust (Das & Teng, 1998). In the case results, this was illustrated by the formal control that is supported by informal control, of which informal control is related to trust.
However, this view of a supplementary relationship, or ‘dualism’, between trust and control is different from the interactive, or ‘duality’, perspective on the trust/control connection that
Vosselman and Van der Meer-Kooistra (2009) and Möllering suggest. In the following subsection this difference is discussed.
5.2 The interactive perspective on trust and control
As Möllering and Vosselman and Van der Meer-Kooistra (2009) stated in their research, trust and control should not be regarded as independent entities. Rather, the concepts assume each other’s existence, implying that one cannot occur without the other (Möllering, 2005) and that they have a constant influence on each other (Vosselman & Van der Meer-Kooistra, 2009). In his research, Möllering (2005) illustrates a case about the relationship between a publisher and an author. Since both parties were closely related in both business and personal life, the author decided that the publisher could also publish his new book. They made deal in which the publisher agreed to publish the book. However, at the last moment, the author decided to publish the book by another publisher that offered a better contract.
27
uses the remaining agency, or freedom, in a favorable way, positive expectations from the side of the trustor emerge (Möllering, 2005). In this thesis, the agency is the freedom or responsibility of the employees, whereas the structure is the control systems plus the control from the manager.
When comparing the duality perspective with the findings of this thesis, an important difference can be identified. First, in the author’s case, an equal relationship between two parties is presented. This is also true in the research of Vosselman and Van der Meer-Kooistra (2009), who raise an inter-firm transactional relationship in which both parties are of an equal level. This thesis contains an intra-firm relationship in which the parties are not of an equal level. The case company consists of multiple hierarchical layers with different roles and responsibility, and each layer must report to its superior layer. The second layer, the managers, controls and monitors the first layer, the employees. The role of the manager is specifically defined as monitoring and guiding the employees in reaching the targets. These managers are controlled and monitored by the third layer, which includes higher level management.
This difference between intra- and inter-firm relationships may explain the difference
between the findings of the previously mentioned authors and the findings of this thesis. Apparently, in an intra-firm relationship it is more convenient to regard trust and control as a dualism rather than a duality. The reason for this is that a dualism perspective provides a set of ‘boundaries’, although loose ones, that makes the trust/control mechanism easier to interpret. When labeling trust and control as complementary, for example, it is imaginable how trust and control behave, namely adding up to each other. In contrast, the duality perspective seems to completely erase those boundaries, regarding trust and control not as substitutes, complements, or one being a form of the other, but as intertwined. Although the elements of ‘agency’ and ‘structure’, the responsibility of the employees and the control systems, are also present in this case study, it is difficult to recognize certain trust or control mechanisms within a company when applying this perspective. Especially in an intra-firm setting it is beneficial to be able to identify trust and control independently before determining the relationship between them. This is because the relationship between managers and employees as well as the performance of both groups are influenced by both trust and control. When it is clear how the trust and control mechanism is composed, it may be more feasible to influence control or trust in order to maximize performance and to improve the manager/employee relationship.
28
29
6. CONCLUSION
The purpose of this thesis was to further investigate the relationship between trust and control in the development of positive expectations, in order to gain a deeper understanding of the trust/control connection. A set of three situations were illustrated in which trust and control existed in a
complementary or substitutable relationship, or in which trust acted as a form of control. One case situation revealed that personal involvement is the element that causes trust and control to
complement. More personal involvement leads to more trust, but it also leads to more control. This process will continue until control will be regarded as excessive.
Namely, another case situation pointed out that too much control is unfavorable and constraining towards the employees. Here, freedom is the element that relates trust in control in a particular way. Subordinates require some freedom to be able to act in a way that is most favorable to them. When this freedom is granted by the superiors, they signal a certain trust to the employees, which results in the development of trust by the employees. Similarly, when freedom is not granted and so control is inordinate, trust will not evolve, or evolve less. Thus, in this example trust and control occur in a substitutable relationship in which less control results in more trust and vice versa. Control will however never be ruled out, as control is necessary within a large sized company to prevent, improve, or punish poor performance.
The last case situation involved the responsibility of the workers when the manager is present, but also when the manager is absent from the workplace. Since the managers are not able to continuously control and monitor the employees, they need a certain trust in the employee to ensure themselves that the subordinates are responsible and capable enough to perform well. So, when control is absent, trust and positive expectations take its place. Hereby control is not lost, since trust serves as a control tool.
These situations indicate that trust and control act as independent entities, although they have a certain connection, depending on a specific setting. This dualism perspective on trust and control is said to be a confusing way of looking at trust and control (Möllering, 2005). A more interactive perspective on trust and control, the ‘duality’ perspective would make both trust and control more recognizable and understandable (Möllering, 2005). However, this thesis pointed out that a more convenient way of looking at trust and control in an intra-firm relationship is with a dualism perspective, because this perspective is of a more explanatory nature than the duality perspective, which is of a more descriptive nature.
30
supplementary way, depending on the situation. This means that the trust/control relationship can take on several forms, such as substitutes, complements, or trust as a form of control. It is important to be able to understand these mechanisms, in order to possibly influence them in a favorable way. Especially in a practical setting, as in the relationship between manager and employees at the workplace, it is useful to identify and perhaps influence the trust and control mechanisms in order to enhance performance. Thus, in order to get a clear understanding of the trust/control relationship in the emergence of positive expectations, it is useful to apply a dualism perspective.
6.1 Theoretical implications
As previous research indicated, the trust/control relationship is still a topic of debate in both
accounting and sociology sciences. This thesis provided more insight into the matter by investigating the trust/control nexus, suggesting that a more appropriate way of looking at the relationship is with a dualism or supplementary perspective. In further exploring these two concepts, researchers should take into account the difference between, on the one hand, parties within an equal relationship and, on the other hand, parties within an unequal relationship. This could be the difference between inter-firm and intra-firm connections, but also between, for example, friends and parent/child. The link between trust and control could be reconsidered in different situations.
6.2 Managerial implications
Apart from the additional insights that this thesis provides for theory, this research may also
31
7. LIMITATIONS
One of the limitations of this research is the method and scale of the case study. In this thesis, a single qualitative method, or more specifically a case study, was used. Other research techniques, such as a quantitative method or a mixture of quantitative and qualitative methods, might have generated different results than the ones presented in this thesis. In addition, the way that the interviews and the coding scheme were developed might involve a certain researcher bias, which implies that a different researcher might come up with different results.. Furthermore, the case study sample consisted of sixteen participants, of which eight were managers and eight were employees. When the size of the sample would have been larger, possibly different results would have emerged.
Also, the functional levels of the participants could have an impact on the findings. That is, when managers of the same level or higher levels were asked to describe their relationship with each other, the relationship between trust and control would perhaps be different.
32
8. FUTURE RESEARCH
As stated earlier, the literature related to trust and control as well as the relationship between the two concepts is still exploratory in nature. There is not one theory that can be applied to all situations and therefore more research needs to be done to clarify the trust/control nexus more.
Based on this thesis, the relationship between trust and control within a company with a bureaucratic structure might be further investigated. Using the same research method or other research methods could bring about different conclusions and provide different insights into the connection between trust and control. Moreover, researchers could consider different levels between the hierarchy and examine how these interpret trust and control.
Another suggestion for future research is to study the difference between intra-firm and inter-firm relationships regarding trust and control. Previous literature has investigated inter-firm relationships and this study considered intra-firm relationships, but there could be a research devoted to the exact difference between the two. This in order to prove that the trust/control connection behaves differently in each situation.
33
9. REFERENCES
Ahrens, T., & Chapman, C. S. (2004). Accounting for flexibility and efficiency: A field study of
management control systems in a restaurant chain. Contemporary Accounting Research, 21(2), 271-301.
Alder, P. S., & Borys, B. (1996). Two types of bureaucracy: Enabling and coercive. Administrative
Science Quarterly, 41(1), 61-89.
Creswell, J. (2002). Educational research: Planning, conducting, and evaluating. Upper Saddle River, NJ: Pearson Education.
Das, T. K., & Teng, B. (1998). Between trust and control: Developing confidence in partner cooperation in alliances. The Academy of Management Review, 23(3), 491-512.
Das, T. K., & Teng, B. (2001). Trust, control, and risk in strategic alliances: An integrated framework.
Organization Studies (Walter De Gruyter GmbH & Co.KG.), 22(2), 251.
Das, T. K., & Teng, B. (2004). The risk-based view of trust: A conceptual framework. Journal of
Business and Psychology, 19(1), 85-116.
Dekker, H. C. (2004). Control of inter-organizational relationships: Evidence on appropriation concerns and coordination requirements. Accounting, Organizations and Society, 29(1), 27-49.
Edelenbos, J., & Eshuis, J. (2012). The interplay between trust and control in governance processes: A conceptual and empirical investigation. Administration & Society, 44(6), 647-674.
Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of Management
34
Emsley, D., & Kidon, F. (2007). The relationship between trust and control in international joint ventures: Evidence from the airline industry. Contemporary Accounting Research, 24(3), 829-858.
Fryxell, G. E., Dooley, R. S., & Vryza, M. (2002). After the ink dries: The interaction of trust and control in us-based international joint ventures. Journal of Management Studies, 39(6), 865-886.
Hammersley, M., & Atkinson, P. (2007). Ethnography: Principles in practice (3rd ed.). London: Routledge.
Hersey, P. and Blanchard, K. H. (1969). Life cycle theory of leadership. Training and Development Journal, 23 (5), 26–34
Hopper, T., & Powell, A. (1985). Making sense of research into the organizational and social aspects of management accounting: A review of its underlying assumptions [1]. Journal of Management
Studies, 22(5), 429-465.
Inkpen, A. C., & Currall, S. C. (2004). The coevolution of trust, control, and learning in joint ventures.
Organization Science, 15(5), 586-599.
Jordan, S., & Messner, M. (2012). Enabling control and the problem of incomplete performance indicators. Accounting, Organizations & Society, 37(8), 544-564.
Langfield-Smith, K., & Smith, D. (2003). Management control systems and trust in outsourcing relationships. Management Accounting Research, 14(3), 281-307.
35
Mack, N., Woosong, C., MacQueen, K., & Namey, E. (2005). Qualitative research methods: A data
collector's field guide. North Carolina: Family Health International.
Maguire, S., Phillips, N., & Hardy, C. (2001). When 'silence = death', keep talking: Trust, control and the discursive construction of identity in the canadian HIV/AIDS treatment domain.
Organization Studies (Walter De Gruyter GmbH & Co.KG.), 22(2), 285.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust.
Academy of Management Review, 20(3), 709-734.
Möllering, G. (2005). The Trust/Control duality: An integratve perspective on positive expectations of others. International Sociology, 20(3), 283-305.
Moorman, C., Deshpandé, R., & Zaltman, G. (1993). Factors affecting trust in market research relationships. Journal of Marketing, 57(1), 81-101.
Nooteboom, B. (2002). Trust: Forms, foundations, functions, failures and figures. Cheltenham: Edward Elgar.
Ouchi, W. G. (1979). A conceptual framework for the design of organizational control mechanisms.
Management Science, 25(9), 833-848.
Raub, W., Buskens, V., & Frey, V. (2013). The rationality of social structure: Cooperation in social dilemmas through investments in and returns on social capital. Social Networks, 35(4), 720-732.
Ring, P. S., & Ven, A. H. V. D. (1992). Structuring cooperative relationships between organizations.
Strategic Management Journal, 13(7), 483-498.
36
Silverman, D. (2009). Doing qualitative research (3rd ed.). Thousand Oaks: Sage.
Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic
renewal. Boston: Harvard Business School Press.
Thomas, D. R. (2006). A general inductive approach for analyzing qualitative evaluation data.
American Journal of Evaluation, 27(2), 237-246.
Tomkins, C. (2001). Interdependencies, trust and information in relationships, alliances and networks. Accounting, Organizations and Society, 26(2), 161-191.
Van Aken, J. E., Berends, H., & Van der Bij, H. (2012). Problem solving in organizations: A
methodological handbook for business and management students. (2nd ed.). Cambridge:
Cambridge University Press.
Volery, T., & Mensik, S. (1998). The role of trust in creating effective alliances: A managerial perspective. Journal of Business Ethics, 17(9), 987-994.
Vosselman, E., & Meer-Kooistra, J. v. d. (2009). Accounting for control and trust building in interfirm transactional relationships. Accounting, Organizations and Society, 34(2), 267-283.
Woolthuis, R. K., Hillebrand, B., & Nooteboom, B. (2005). Trust, contract and relationship development. Organization Studies, 26(6), 813-840.
Wouters, M., & Wilderom, C. (2008). Developing performance-measurement systems as enabling formalization: A longitudinal field study of a logistics department. Accounting, Organizations &
Society, 33(4), 488-516.
37
Zaheer, A., & Venkatraman, N. (1995). Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange. Strategic Management Journal, 16(5), 373-392.
38
APPENDIX: INTERVIEW SCHEME
My name is Zorana Vos and I am currently in the final phase of the master Organizational and
Management Control at the University of Groningen. For my master thesis I examine the relationship between trust and control in the development of positive expectations. The questions in this
interview will mainly encompass how you experience the relationship between you and your direct superior/subordinate in the light of the control systems within the company. I would like to request that you do not discuss this interview with your colleagues, at least until all interviews have been carried out.
This interview will be recorded and will it take between 15 and 30 minutes. The results of my research will be processed anonymously. This means that names and statements cannot be traced back from the end result and that they will not be shared with external parties. The final thesis will perhaps lead to certain insights that can assist in improving the service within the company.
I would like to thank you for your participation.
Employee General
1. What are your work activities within the company? 2. How do you experience work pressure?
Targets
3. Which targets have to be reached? 4. How are these targets achieved?
5. How are these targets communicated to you?
Control systems
6. What control systems are used to measure your performance? 7. What is your opinion on these control systems?
8. Do you think that the use of control systems is a sign of distrust? Why? 9. Do you have a say in the composition of the control systems?
10. What is done with your feedback on the control systems?
39
Performance
12. Can you describe a situation in which you did not achieve the targets? What were the consequences?
13. To what extent do meetings about performance between you and your manager take place? 14. How do you experience these meetings?
Expectations
15. What are your expectations of your manager?
Manager General
1. What are your work activities within the company?
2. How do you experience work pressure (for both you and your employees)?
Targets
3. Which targets have to be reached? 4. How are these targets achieved?
5. How are these targets communicated to the employees?
Control systems
6. What control systems are used to measure the performance of the employees? 7. What is your opinion on these control systems?
8. Are the control systems used because there is little trust in the employees? Why? 9. How much influence do the employees have on the composition of the control systems? 10. How is the feedback of employees used in improving the control systems?
11. How satisfied are you with the input of your employees?
Performance
12. Can you describe a situation in which an employee did not achieve the targets? What were the consequences?
13. To what extent do meetings about performance between you and the employees take place? 14. How do you experience these meetings?
Expectations
