Management Control in Interorganizational Relationships: A Qualitative Perspective

In this PhD, we will focus on how management control systems materialize in relevant types of interorganizational relationships, namely public-private partnerships and franchising chains. The doctoral thesis will exist out of four chapters. Chapter 1 - Governing risks in public-private partnerships: The importance of informal leadership While public-private partnerships (PPPs) are increasingly common, a comprehensive control framework for managing the diverse risks across different types of PPPs remains lacking. We cluster the various risks inherent in PPPs, studied in previous research, into three generic risk archetypes: performance, relational and socio-political risks. Using a comparative case study approach, this article develops a framework for governing the three risk archetypes in PPPs with appropriate control mechanisms. In line with prior research into inter-organizational relationships, we find that outcome controls are essential in managing PPPs with high performance risk, while behavior controls become more important when relational risk is also significant. Novel is that we identify informal leadership by project champions and - to a lesser extent - conveners as a crucial control mechanism for managing socio-political risks. Informal leadership becomes even more relevant for effective PPP governance when considering the interdependences between the various risks and control mechanisms. Chapter 2 - Going beyond organizational forms: How hybrid control practices and processes sustain cooperation in public-private partnerships Although public-private partnerships (PPPs) have become omnipresent to engage in public procurement, research lacks insights on how cooperation is sustained in this type of partnerships. Deploying prior research on hybrids and their corresponding control practices and processes, I aim to shed light on how interpersonal, interorganizational and network controls contribute to sustaining cooperation. Existing literature has predominantly focused on the influence of these controls in isolation, largely ignoring the potential interrelationships across these different levels of control. Using a multiple case study approach including five long-term PPPs, this paper identifies how interdependences between hybrid control practices and processes at different levels help to sustain cooperation. Findings indicate that interorganizational control practices trigger interpersonal control processes (i.e. sensemaking, reciprocity and interpersonal trust) to sustain cooperation between partners even beyond the contractual boundaries of the partnership. Moreover, as the PPP market is characterized by a strong interconnectedness between the various partners, interpersonal experiences escalate to the macro level, codetermining an organization's reputation within the broader PPP market. As upholding a good reputation is strategically important within such interconnected markets for the purpose of future projects, it contributes to sustaining cooperation within a focal PPP. My findings emphasize the importance of taking on a system-based and multi-level perspective to understand how hybrid control practices and processes contribute to sustain cooperation. Chapter 3 - The plural form as a management control mechanism in franchising chains: The influence of customization The franchising literature often presents the plural form as a necessary deviation from a preferred alternative (full franchising or full company-ownership), not fully grasping its potential as a control mechanism. This study examines the plural form from a management control perspective: we argue that the control benefits of the plural form for the franchisor are aligned with the chain's customization strategy. Our findings, based on a comparative case study involving eight franchising chains, indicate that the degree of customization entails different types of strategic assets to be managed within the chain, and consequently, triggers different uses of the plural form as a control mechanism. Specifically, chains focusing on standardization, customized standardization or full customization tend to prioritize brand assets, operational assets, or relational assets, respectively. Associated with these different priorities, the plural form enables the franchisor to install particular control mechanisms, such as standard setting, training centers, or competence trust. The degree of customization also influences how chains use the plural form for solving control problems related to human capital and innovation capacity. This paper provides an interesting contribution to the literature, as it identifies a chain's customization strategy as a key determinant of how the plural form functions as a control mechanism at the chain level. Chapter 4 - Strategic change and management control adaptations in a franchising network: the case of a retail chain Strategic change in interorganizational networks often necessitates a reconfiguration of control systems, yet we know little about how these dynamics unfold when a central actor alters its governance model. This study examines such a transformation in the context of franchising, where chains commonly adopt a plural form strategy—operating both company-owned and franchised units—to align franchisee behavior with strategic goals. Prior literature has emphasized the control advantages of this plural form symbiosis, but largely in stable environments. We explore what happens when a franchisor abandons the plural form and transitions to full franchising. Drawing on the levers of control framework, we study a retail chain that made this strategic shift to reduce costs and respond to external pressures. Our findings show that the removal of company-owned units eliminated key belief systems previously used to foster alignment. In response, the franchisor increased its reliance on boundary systems (e.g., contractual constraints, design mandates) and diagnostic controls (e.g., KPIs, performance monitoring). This shift did not only change how control was enacted by the franchisor, but also affected how it was perceived by franchisees—leading to emergent informal dynamics and stronger horizontal ties among the franchisees that the franchisor did not fully anticipate. We contribute to the management accounting literature by showing how control levers are rebalanced in response to strategic change in a hierarchical network. We also extend the franchising literature by revealing the control challenges that arise when the plural form is abandoned. Finally, we offer a network-oriented view of control adaptation, highlighting how strategic change at the focal firm reverberates through both vertical and horizontal relationships in the network. These insights are particularly relevant for practitioners managing similar strategic trade-offs in franchise systems.