1 Accounting Research Centre - ARC, Aarhus School of Business, Aarhus BSS, Aarhus University2 Department of Business Studies, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Management, Aarhus BSS, Aarhus University4 Department of Management, Aarhus BSS, Aarhus University
Flexibility and access to numerous resources are essential benefits associated with network participation. An important aspect of managing the network participation of a company is to maintain a dynamic portfolio of partners, and thereby keep up the strategic opportunities for development. However, maintaining the dynamics within a network seems to be a complex challenge. There is a risk that the network ends up in The Paradox of Network Participation. The desired renewal and flexibility are not utilised because the involved parties preserve the existing networks structure consisting of the same companies, and hence, the paradox reduces the potential advantages of the network. The objective of this paper is to analyse the fundamental conditions for a company which depends on an efficient network, and based on this discuss how active use of information can reduce the relative importance of trust and thereby sort out the paradox of network participation. Trust and information are mechanisms employed to absorb uncertainty. The relationship between trust and the requirement for information depends on the maturity of the relationship. When trust becomes too important as uncertainty absorption mechanism the paradox sets in. Three proposals are made for substituting trust with information as possible ways out of the paradox.
Management Accounting; Social Networks; Paradox of Embeddedness; Trust; Information
Main Research Area:
2nd Workshop on Trust Within & Between Organisations, 2003