Exploring the Relationship Between Trust and Control — An Empirical Analysis of Sino-German Joint Ventures

Abstract

Trust and control are recurring themes in the research on international joint ventures (IJVs). So far, however, researchers have mainly focused on analysing either trust or control and its association with IJV performance. Whereas one group of authors views trust as crucial for performance, a different group suggests that, in order to be successful, partners should increase their control over the IJV to ensure that their goals for the IJV are achieved. If both groups are right, IJV partners should try to exert control and establish a trustful relationship at the same time to maximize the likelihood of success. This conclusion, however, leads to the counter-intuitive result that firms can simultaneously control and trust their IJV partners. This study presents three alternative views regarding the nature of the relationship between trust and control and tests them against data gathered by means of a questionnaire survey among managers of Sino-German joint ventures.