Re-examining the role of accounting, contracts and trust in inter-organisational networks

Suresh Cuganesan

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Abstract

In contrast to the popularity of network organisational forms as a means of conducting business, there is growing evidence of failure amongst these arrangements. Despite a significant amount of research on the topic, a number of gaps exist in relation to the trust-formal control relationship and the mechanisms by which trust is produced. This paper theoretically examines the trust-formal control nexus, considering both contracts and accounting control mechanisms equally and how these interact with trust mechanisms. In contrast to prior literature which posits a substitutive relationship, the means by which formal controls can both complement and substitute for trust are outlined, with the implications for law, accounting and organisational practitioners identified.
Original languageEnglish
Pages (from-to)24-30
Number of pages7
JournalJournal of law and financial management
Volume4
Issue number1
Publication statusPublished - 2005

Bibliographical note

Publisher version archived with the permission of the publisher Macquarie Graduate School of Management, Macquarie University, NSW, Australia. This archived copy is available for individual, non-commercial use. Permission to use this version for other uses must be obtained from the publisher.

Keywords

  • accounting
  • contracts
  • trust
  • networks

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