Effect of Management Maturity Levels on Inter-organizational Management in Value Chain Relations

Abstract

This paper explains the current state of management control problems in inter-organizational relationships. There is a growing consensus that having cooperative relations with other organizations, building strategic supply chain relations, and establishing appropriate subsidiary-parent company relations are major components of a competitive strategy to increase organizational productivity and profitability. In this regard, we present samples collected from 60 Japanese companies, and provide a case study on the use of inter-organizational management control systems (MCSs) by a large Japanese manufacturing company. The findings show how a company can design its organizational structure in order to realize its strategies and achieve its goals. Further, the case study shows the importance of management control factors that are associated with activities in inter-organizational value chain relations. In particular, high management maturity in information management, cultural management, and structural management are identified as key factors for the integration of strategy with sustainable inter-organizational management.