Article review of “Collaborative inter-organisational relationships and management control change”
How to present
this article in Harvard reference format?
Biswas, S.
& Akroyd, C., 2022. Collaborative inter-organisational relationships and
management control change. Accounting & Finance,
62, pp.4569–4586. Available at: https://doi.org/10.1111/acfi.12955
[Accessed 21 Sep. 2026].
What are the key
research issues the article wants to address?
The key research
issues addressed in the article are:
1.
Understanding how
management controls are used and change to govern an ongoing
inter-organisational collaborative relationship, particularly in an open
innovation context.
2.
Examining the
development of a collaborative inter-organisational relationship (IOR) through
management control changes using theoretical concepts from neo-old
institutional economics and Simons’ levers of control framework.
3.
Investigating how
trust evolves in such collaborations and how changes in the style of management
control—from diagnostic to interactive—impact trust and governance over time.
4.
Differentiating
the use and role of management controls in collaborative ongoing IORs as
opposed to fixed-term transactional IORs, an area less explored in management
accounting literature.
5.
Exploring how
relational specificity investments influence the adjustments in management
control practices and promote effective collaboration between partners.
In summary, the
article seeks to understand the dynamic interplay between management control
systems, trust development, and governance in collaborative open innovation
partnerships across organisational boundaries.
Describe two main
theories employed in this article.
The two main theories employed in this article are:
1.
Neo-old institutional economics
(neo-OIE): This theory, developed by Burns and Scapens (2000) and
others, integrates ideas from old institutional economics, evolutionary
economics, Giddens’ structuration theory, and new institutional sociology. It
provides a framework to study how management accounting and control practices
evolve as sets of rules and routines that shape organisational behaviour.
Neo-OIE emphasizes that change in management control is an evolutionary and
path-dependent process influenced by taken-for-granted assumptions
(institutions), circuits of power, trust, and existing organisational routines.
The article uses neo-OIE to understand how collaborative inter-organisational
relationships develop through changes in institutionalised rules and routines
manifest in management control practices.
2.
Simons’ Levers of Control (LoC)
Framework: Simons (1995) proposed that management control systems
operate through four levers: belief systems, boundary systems, diagnostic control
systems, and interactive control systems. Belief systems communicate core
values and inspire motivated search within acceptable limits, while boundary
systems set limits on behaviour to control risks. Diagnostic controls are used
to monitor outcomes and correct deviations, whereas interactive controls are
used to foster dialogue and learning about uncertainties and strategic
uncertainties. The article adopts Simons’ framework to conceptualise how these
controls are deployed and evolve in the context of managing collaborative
ongoing inter-organisational relationships, particularly how the shift from
diagnostic to interactive use of controls affects trust and governance.
Thus, the study combines neo-OIE to analyse the
evolutionary institutional change and Simons’ LoC to frame the operational use
and transformation of management control mechanisms in collaborative
inter-organisational settings.
Highlight 2 main primary findings reported in this article.
Two main primary findings reported in the article are:
1.
Initial Use of Diagnostic
Controls and Low Trust: At the beginning of the
collaborative inter-organisational relationship between FruitCo and ResearchCo,
the firms primarily applied governance structures and formal safeguards in a
diagnostic manner. This diagnostic style of control focused on monitoring outputs
against preset standards to protect firm interests and mitigate risks, such as
concerns about cost control and information leakage. However, this approach
contributed to low levels of trust between the organisations, which created
tension and hindered collaborative efforts in the initial phases of the
relationship.
2.
Evolution to Interactive Controls
and Increased Trust: Over time, the collaborative relationship
developed through investments in relational specificity, meaning increasing
commitment via managerial time, energy, and adjustments to rules and routines.
This development facilitated a shift from a primarily diagnostic to a more
interactive style of management control. Interactive controls involved more
frequent communication, joint problem-solving, and engagement with strategic
uncertainties, which helped to build trust and strengthen the collaborative
relationship, enabling more effective open innovation governance.
In summary, the study finds that the style of management
control evolves from formal, protective diagnostic controls with low trust to
more collaborative, interactive controls that foster higher trust and enable an
ongoing innovative partnership.
Describe 3 main claims of the article in
terms of Toulmin's model of argument.
Using Toulmin's
model of argument—which includes Claim, Grounds (Evidence), and Warrant
(the reasoning that connects grounds to claim)—three main claims of the article
can be described as follows:
Claim 1:
Initial reliance
on diagnostic management controls leads to low trust in collaborative
inter-organisational relationships (IORs).
- Grounds
(Evidence): The case study of FruitCo and ResearchCo
showed that early in the relationship, diagnostic controls such as strict
monitoring, operational rules, and preset milestones were applied to
safeguard against risks like appropriation and information leakage. These
controls resulted in partner resistance and limited willingness to
collaborate due to low trust.
- Warrant: Diagnostic controls focus on formal performance measurement and
controlling behaviors to avoid opportunism but do not foster relational
closeness or normative cooperation necessary to build trust. Therefore,
extensive use of diagnostic controls in early IOR phases constrains trust
development.
Claim 2:
Investments in
relational specificity by top management enable a shift in control style from
diagnostic to interactive, which elevates trust and collaboration.
- Grounds
(Evidence): The intervention of the CEOs of FruitCo and
ResearchCo, involving encouraging direct communication, structural
changes, and managerial efforts (time, energy, and effort), helped improve
the relationship. This relational investment led to more interaction,
consultation before decisions, and reduced resistance from project
members.
- Warrant: Relational specificity—building tailored, ongoing interactions—provides
the social foundation and motivation for partners to engage
collaboratively and share strategic uncertainties. Hence, increased
managerial relational investments allow control systems to be used
interactively, fostering trust.
Claim 3:
The evolving use
of interactive control systems supports ongoing collaboration by aligning
objectives and routines, allowing trust to function as an effective governance
mechanism.
- Grounds
(Evidence): Over seven years, both organizations aligned
their strategic objectives and adapted routines, with less need for strict
monitoring. Communication improved, information flows more freely, and the
parties viewed each other as working toward common goals. Trust emerged as
a result, which reduced perceived risks and changed the role of management
controls from safeguards to governance enablers.
- Warrant: Interactive control systems, by involving managers regularly in
decision-making and focusing attention on strategic uncertainties,
facilitate alignment and cooperation. This alignment reduces risks and
allows trust to operate as a control mechanism, making governance more
efficient and collaborative.
These claims
together articulate the article's core argument that management control use and
trust in inter-organisational collaboration are dynamic and interdependent,
requiring shifts in managerial approach and relational investments over time.
Describe 2 main research limitations of the study.
The article identifies two main research limitations:
1.
Single Case Study Limitation:
The study is based on a single retrospective longitudinal case study of one
collaborative inter-organisational relationship between FruitCo and ResearchCo.
As such, the findings cannot be generalized broadly without caution. The
authors note that the insights provide a basis for further empirical studies
but acknowledge the limitation posed by focusing on only one case.
2.
Retrospective Data Collection:
The data collection relied on retrospective interviews and documents, which might
be subject to recall bias or incomplete recollections. The authors suggest that
a real-time, longitudinal case study following a company as it enters a
collaborative relationship could provide deeper or additional insights about
the changes in management controls and relational development processes.
These limitations highlight the need for further research
with multiple cases and real-time data to expand understanding of management
controls in collaborative ongoing IORs.
No comments:
Post a Comment