Controlling Trust and Trusting Controls

Abstract

This paper seeks to explore the nature of, and relationships among, multi-levels of trust within international joint ventures (IJVs) as well as the mechanisms through which trust interacts through different control mechanisms in a longitudinal multi-case approach. Empirical evidence collected from five car-manufacturing IJVs in China shows that organizational trust between two partners of an IJV are reinforced with personal trust among managers and employees. It is also found that personal trust between senior managers can have a negative impact on the organizational trust of Boards of Directors (BOD) in senior managers assigned to IJVs. This paper complements the literature in IJV management by showing that at a mature stage, social controls are more effective and strengthen trust at different levels while formal controls can lead to increased levels of conflict and frictions between partners.