Formal control and social control in domestic and international buyer–supplier relationships

Focusing on long-term buyer–supplier relationships, this article addresses two questions: (1) What are the antecedents that lead to the adoption of formal control, social control, or both? (2)What is the nature of the relationship between formal control and social control—are they substitutes or complements?We develop amodel to investigate the impact of the length of cooperation and institutionalization on the use of control mechanisms. Further, we argue that in China, formal control and social control may be substitutes in domestic buyer–supplier relationships, but they may be complements in international relationships. Survey data collected nationwide with executives in 380 domestic and 200 international buyer–supplier relationships in China are used to test our hypotheses. 2009 Published by Elsevier B.V. * Corresponding author. Tel.: +86 29 82667829; fax: +86 29 82667833. E-mail addresses: [email protected] (Y. Li), [email protected] (E. Xie), [email protected] (H.-H. Teo), [email protected] (M.W. Peng). 1 Tel: +86 29 82665093; fax: +86 2982665093. 2 Tel: +65 6516 2979; fax: +65 6779 4580. 3 Tel: +1 972 883 2714; fax: +1 972 883 6029. G Model