Interpersonal trust and formal controls in low systemic trust societies

Ekanayake, S. 2003, Interpersonal trust and formal controls in low systemic trust societies, in 26th Annual EAA Congress Book, European Accounting Association, Seville, Spain, pp. 1-20.

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Title Interpersonal trust and formal controls in low systemic trust societies
Author(s) Ekanayake, S.
Conference name European Accounting Association Congress (26th : 2003 : Seville, Spain)
Conference location Seville, Spain
Conference dates 1-4 Apr. 2003
Title of proceedings 26th Annual EAA Congress Book
Editor(s) Molina, Guillermo J.Sierra
Handelshøyskole, Norges
Publication date 2003
Start page 1
End page 20
Publisher European Accounting Association
Place of publication Seville, Spain
Summary This study is concerned with the role of interpersonal trust in management control. On the basis of a questionnaire survey and interviews of senior managers from business organisations in sri lanka, the study explores the control behaviour of superior managers when they trust or distrust their subordinates. Sri lanka, a society in which the dependence on interpersonal trust is high, was chosen for the study to maximise the effect of interpersonal trust.

The findings of this study indicate that a superior's high trust in a subordinate is associated with a low level of monitoring, a high level of social interactions, and a low reliance on formal controls. In contrast, a superior's low level of trust in a subordinate is associated with a high level of monitoring, a low level of social interactions, and a high reliance on formal controls. Because the data emanate from experienced senior managers, these findings are at least indicative of control behaviour of superior managers in sri lanka and possibly of similar countries in asia. An understanding of the control behaviour of managers in this region is particularly important for designing and implementing effective controls systems for firms, subsidiaries, branches or joint-ventures operating in the region.
Language eng
Field of Research 150105 Management Accounting
Socio Economic Objective 910402 Management
HERDC Research category E2 Full written paper - non-refereed / Abstract reviewed
Copyright notice ©2003, European Accounting Association
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Document type: Conference Paper
Collection: School of Accounting, Economics and Finance
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