Relationship Capability, Creation of Trust and Control: Differing Perspectives on International Strategic Alliances

Management studies have increasingly focused on the various influences of control and trust in coordinating inter-organizational exchanges (Chua et al., 2009). This study attempts to identify how an ISA’s control and trust are created, and under what circumstances an international strategic alliance (ISA) in China may take active actions that lead to the development of relationship capabilities and market-based practices. The research will be primarily based upon on how an ISA executes a myriad of control mechanisms such as targeting, contractual provisions and formalization whereas trust entails an enhancement of reciprocal activities, emotional bonding and social networking. We will investigate how an ISA in China can effectively enhance its relationship capability where the transmitting values of control and trust affect the ISA’s development strategies to conduct a business transaction through emphasizing factors such as flexibility, acquisition, sharing information, codification of new knowledge, mutual dependence, collaboration and network.