Author and affilication

Business organisations are facing increasing competition both locally and globally. One of the strategies that is being used to meet this competition is the formation of strategic alliances with suppliers. This paper addresses the control approaches needed to sustain and control the reciprocal, mutually supportive relationships in these supply chains. Transaction cost theory is used to examine the changes in the understanding of transactions which have resulted in supply chains being formed. The paper goes on to identify the conditions and factors which are relevant to control. Simons’ (1995) levers of control in an empowered organisation are then used to discuss the direct and indirect control approaches in a supply chain. The direct controls combine the processes of monitoring and constraining performance and developing trust through interaction. The indirect controls impact on the commitment engendered by both parties' perceptions of the reciprocal benefits gained. Finally, the implications of these control approaches on the measurement of performance are discussed.