In recent years, there has been a significant increase in inter-organisational collaboration resulting in the emergence of hybrid organisational forms. This has led to recognition that management control can no longer be confined to the boundaries of a single organisation. Management control systems (MCS) must encompass networks of organisations. Inter-organisational relationships require both formal and informal controls. The latter are essentially mechanisms for encouraging self regulation. Significant among these mechanisms is trust. In inter-organisational collaborations high levels of trust can impact on the nature and the role of MCS. This paper elaborates a model of the link between the constituents of trust (trust factors) and the design of the MCS. We show how different trust factors (ability, benevolence, integrity) impact on different MCS’ approaches (belief, boundary, diagnostic and interactive systems) using Simon’s (1995) levers of control framework. The model demonstrates that an understanding of these relationships, especially in the innovation networks, can help managers employ the most suitable approach to management control in organisational network.
Keywords: Management Control, Networks, Fiducia