Master

Accounting, Organizations and Society 29 (2004) 27–49 www.elsevier.com/locate/aos

Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements

Henri C. Dekker*

Vrije Universiteit Amsterdam, Amsterdam Research Center in Accounting (ARCA), De Boelelaan 1105, 1081 HV Amsterdam, the Netherlands

Abstract This paper presents a framework of the control of inter-organizational relationships. Building on transaction cost economics and organizational theory, two control problems are identified that arise when firms engage in interorganizational relationships: the management of appropriation concerns and the coordination of tasks. The control mechanisms used to manage these control problems and their interrelationships with informal (trust-based) mechanisms are discussed. The explanatory power of the framework is assessed by a case study of a strategic alliance between a buyer and a supplier of railway safety equipment. # 2003 Elsevier Ltd. All rights reserved.

Introduction Following its widespread dispersion in practice, research into the inter-organizational relationship (IOR) is proliferating. In several social science disciplines, such as economics, strategy, organizational and management research, the IOR has become a research topic of substantial importance. Accounting researchers, however, have been slow to incorporate the concept of the IOR into their research. It has been for some years that more attention to this issue is called for (e.g. Hopwood, 1996; Otley, 1994). Since then, a few accounting studies have explored accounting and control issues in IORs, for instance in the context of international joint-ventures (Groot & Merchant, 2000), outsourcing relationships (Anderson, Glenn, & Sedatole, 2000; Gietzman, 1996; Van der

* Corresponding author. Tel.: +31-20-444-6066; fax: +3120-444-6005. E-mail address: hdekker@feweb.vu.nl (H.C. Dekker).

Meer-Kooistra & Vosselman, 2000) and integrative buyer–supplier...