The Effect of Trust and Control to Innovative Partnership

Abstract

Companies have started to concentrate on their core competencies and outsource more to their suppliers due to the increased consumer demand and continuous need to achieve lower costs with smaller resources. Partnerships that are managed with trust are becoming more and more common. Purpose of this study is to find out how trust and control affect on innovativeness in partnership.

This study is qualitative case study made from a practical starting point. Organization in the field of consumer electronics and their six partnerships are studied. Thematic interviews and e-mail inquiries were primary research method and interviews were made for 19 people. Secondary research method that was used is direct non-participative observation in meetings between organizations involved in this study and observation in open office. Compared to recent literature about the topic, the theoretical explanations about the effect of trust in partnership received support. Building trust between the two parties is essential in partnership and learning between partners can happen when trust is present. On one hand control has negative affect on innovative behaviour in partnership, but on the other hand control is needed to manage partnerships efficiently.

Partners’ trust towards each other was found to be quite high in this case study, though all of the partner companies do not see themselves as partners yet. In ideal situation partners will be discussing and questioning issues together in open atmosphere. Companies involved in this study that had very high level of trust, were learning from each other and sharing confidential information and knowledge. Partnership is compared to traditional supplier-customer relationship, where supplier does not have the target to develop and innovate themselves or together with their customer.