To ensure cooperation, parties in inter-organizational relationships (IORs) draw upon both control and trust. However, the relationship between control and trust is not straightforward and is likely to change throughout the IOR. Furthermore, decisions to trust will always depend on how control is perceived, and decisions on how to control depend on trust in the other party. The study’s results build on a longitudinal study of a client-contractor relationship in the Norwegian infrastructure industry.

The temporal nature of the controlling and trusting domain

Our study, published in the Journal of Management Studies, unpacks the interplay between control–trust dynamics and IOR dynamics and demonstrates the continuous adjustments of the relationship between control and trust as the IOR evolves. Critical incidents e.g., external events distorting the relationship, performance failures by one of the parties, or different understandings of the contract in relation to specific events, change the characteristics of IORs. However, such incidents are often perceived differently by the parties leading to one party asking for more control while the other party is focusing on maintaining trust. These asymmetries, in turn, create tensions regarding how and when the parties rely on control and trust. This study unpacks how the parties cope with these tensions through what we term action-reaction cycles. One key concept in the action-reaction cycle is coping practices. The coping practices redefine the controlling and trusting domain and mediate between the multiple and temporal domains to ensure that control and trust again refer to and create one another to enable the (re)forming of positive expectations in the IOR.

Coping practices – the mechanism ensuring productive cooperation

Successful coping with tensions caused by critical incidents in IORs ensures that control and trust refer to and create one another to fit the new situation. We identify three coping practices in this study – routinizing, re-organizing, and joint problem-solving. The routinizing coping practice concerns redefining the controlling and trusting domain by adjusting and clarifying the joint routines and procedures supporting the cooperation. The re-organizing coping practice concerns changes in the structural context of the relationship such as replacing people, developing new meeting arenas, and changing the project end date to enable improved cooperation between the parties. The joint problem-solving practice encompasses developing solutions to critical events as an integrated team despite belonging to independent organizations with divergent interests. We find that initiating joint problem-solving requires a certain level of trust between the parties, creating the belief that, together, they are competent to solve the challenge.

Managerial implications

This implies that in managing IORs, the parties are better able to cope with tensions in the relationship if they acknowledge that control and trust cannot be seen in isolation and recognize the presence of temporal controlling and trusting domains. Managerial awareness is key when critical incidents occur in the IOR as they may incur conflicting risk assessments between the parties and create tensions in the relationship. Coping practices help redefine the controlling and trusting domain as they mediate between the multiple and temporal domains in the IORs. As such, coping practices represent key tools for managers to ensure that control and trust refer to and create one another to form positive expectations and, thus, ensure cooperation.