The Effect of Network Ties on Accounting Controls in a Supply Alliance : Field Study Evidence

Longer-term alliances between corporate buyers and sellers are now commonplace. Extant research predominantly models these interorganizational relationships as dyads. This field study seeks to extend current research in two ways. First, it analyses a supply alliance as nested within a larger network of interorganizational relationships. The paper demonstrates that network ties with 'significant others' influence the operation of accounting controls in the focal supply alliance. That is, ties with third and fourth parties materially impact the management control of an alliance. Second, like other social collectives such as firms and societies, networks are embedded in implicit normative and interpretive frameworks that influence and are influenced by accounting controls. Evidence is provided as to how tacit beliefs about 'fair' pricing and 'appropriate' supplier behaviour impact upon the performance management of the focal supply alliance, thus making it difficult to draw the distinction between accounting as a 'technical' control as opposed to a form of 'social' control