From Market to Clan: How Organizational Control Affects Trust in Defense Acquisition

Report Number: NPS-AM-05-010

Series: Acquisition Management

Category: Transaction Cost Economics (TCE)

Report Series: Working Paper

Authors: Roxanne Zolin, John Dillard

Title: From Market to Clan: How Organizational Control Affects Trust in Defense Acquisition

Published: 2005-06-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: NPS Faculty

Full Text URL: http://acquisitionresearch.net/files/FY2005/NPS-AM-05-010.pdf

Keywords: Trust, Organizational control, Transaction-cost Economics

Abstract:

Military acquisition relies upon industry for new product development, but market organizational control is not recommended for knowledge-intensive work. Unfortunately, increasing hierarchy-control mechanisms, such as formalization, could reduce trust. What is the appropriate balance of control mechanisms and trust for an IPT in the DoD acquisition realm? We conducted interviews and surveys in a major military acquisition program office employing IPTs, Alpha Contracting and collocation. We found that the relationship between formalization and trust was different between government and contractor team members. Acquisition managers must understand the relationships between control mechanisms and trust within and between organizations to increase collaboration between government and contract personnel.