Understanding the Complementary Perspectives of Control and Trust on the Development of Firms’ Social Capital and Performance in China

The recognition of the complementary influence of control/trust duality on a firm’s behavioral decision-making has spawned substantial interest within the management study fraternity. The layers of paradoxical influence can be peeled back to elucidate how the effect of trust reinforces a firm’s purposive decision-making in areas such as contracts, formalization and targeting. Results from 318 Sino-foreign firms in China demonstrate that the effect of trust on the engagement of targeting and formalization has a stronger effect over the attainment of organizational efficiency. Empirical evidence drawn from our survey finds support for the exploitation of complementary aspects of control and trust that augments a firm’s relationship capability associated with organizational changes that take place in emerging markets such as China. Our results confirm that the complementary perspectives of control and trust orientation make significant contributions to the enhancement of a Sino-foreign firm’s relationship capability.