Description
This paper examines the way in which calculative practices are implicated in the constitution of trust in the UK retail
sector. In the sector, where trust receives much attention in declarations of intent, the notion of category management –
a framework for orchestrating collaborative buyer–supplier relations based on dualistic modes of information exchange
– has become widely adopted
Walking the talk? Supply chain accounting and trust
among UK supermarkets and suppliers
Clinton Free
*
Queen’s School of Business, Goodes Hall, Queen’s University, Kingston, ON, Canada K7L 3N6
Abstract
This paper examines the way in which calculative practices are implicated in the constitution of trust in the UK retail
sector. In the sector, where trust receives much attention in declarations of intent, the notion of category management –
a framework for orchestrating collaborative buyer–supplier relations based on dualistic modes of information exchange
– has become widely adopted. Drawing on Giddens’ conceptualization of trust in abstract systems, it is argued that
regimes of calculative practices embedded in the category management framework played an integral role in constitut-
ing system trust in category management and enabled its rapid di?usion across the sector. However, modes of supply
chain accounting can also be deployed as a mechanism to further particular interests behind a veil of talk about trust.
This paper presents a longitudinal ?eld study where management accounting practices pursued under the banner of cat-
egory management operated to dissemble a variety of self-interested actions and trust was deployed largely as a discur-
sive resource which ultimately resulted in distrust and cynicism. This paper presents a framework for conceptualizing
the relationship between accounting and inter-organizational trust and provides insights into the way that accounting
techniques such as open booking accounting and joint performance management introduced amid ‘trust talk’ can act to
undermine trust in buyer–supplier relations.
Ó 2007 Elsevier Ltd. All rights reserved.
The establishment of many new ties between
?rms and continuous re-organizations within ?rms
in response to increasing competition, environmen-
tal complexity and uncertainty has brought the
notion of co-operative relationships to the fore.
Both within the UK retail sector and across a host
of other economic domains, this relational focus
has been accompanied by a growing interest in
the phenomenon of trust. Trust has not only
become regarded as an important co-ordination
mechanism but is increasingly being viewed as a
precondition for improved performance and com-
petitive success in complex business environments.
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.09.001
*
Tel.: +1 613 533 3255; fax: +1 613 533 6589.
E-mail address: [email protected]
www.elsevier.com/locate/aos
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 629–662
In the face of rapid technological innovation,
intense competition and maturing markets, many
commentators have observed that there has been
a shift in buyer–supplier relationships in the UK
retail sector towards closer, trust-based relations
(Hogarth-Scott & Dapiran, 1997; IGD, 2002),
re?ecting broader trends in supply chain manage-
ment (e.g., Cox, 2001). An important element in
this development has been the di?usion of category
management, a framework for managing product
categories
1
as business units whereby a ‘category
captain’ supplier is e?ectively empowered to guide
decisions relating to product selection, pricing,
pro?tability and product rationalization to satisfy
customer needs. In broad terms, category manage-
ment is supported by more collaborative modes of
organizing and suggests numerous roles for man-
agement accounting based upon the principles of
mutuality and reciprocity, including joint forecast-
ing and planning, open book accounting, joint per-
formance measurement and vendor-managed
inventory (IGD, 2002).
This study attempts to address the lack of
empirical work that recognizes the organization-
ally embedded social context for trust and the
complex relationship between trust and accounting
practice. It also seeks to explore recent contribu-
tions in the supply chain management literature
that suggest that large UK supermarket retailers
are at risk of becoming ‘‘?ef-like’’ (Blois, 1997, p.
381), where suppliers are e?ectively tied into pow-
erful, dominant supermarket partners that can
enforce punitive actions in response to perceived
failings (Hingley, 2005; Kumar, Scheer, & Steenk-
amp, 1998).
2
Speci?cally, this paper is motivated by the fol-
lowing general research question: how are calcula-
tive practices implicated in the constitution of trust
in the UK retail sector? It has two principal ?nd-
ings. The ?rst is that existing de?nitions of trust
need to be more tightly and coherently elaborated
to be applicable in the inter-organizational con-
text. To date, accounting research has been inhib-
ited by a lack of attention to the nature and e?ects
of trust. Empirical research in the area is beset by
con?icting conceptualizations of trust, inadequate
understanding of the relationship between trust,
its antecedents and consequences and the use of
trust scales that are neither theoretically derived
nor rigorously validated. In particular, a more
nuanced understanding of the distinction between
trustworthiness and trust, and the role of power
relations in co-operation between trading partners
represent useful advances for future researchers.
To this end, this paper proposes a set of trust con-
structs that re?ects both institutional phenomena
(system trust) and personal and interpersonal
forms of trust (trust, trusting behaviours, trust-
worthiness and trusting disposition).
The second key ?nding of the paper is that
trust can be invoked in both ritualistic and instru-
mental ways. An examination of the adoption of
category management shows how the di?usion
process rested importantly on the way regimes
of calculative practice e?ectively enhanced percep-
tions of objectivity, rigour and neutrality –
thereby bolstering system trust in category man-
agement. However, this paper also demonstrates
that modes of supply chain accounting practice
can be disconnected from public statements about
trust. Drawing on Giddens’ theory of structur-
ation, a ?eld study of a category management
relationship in the paper products category dem-
onstrates the way in which accounting practices
can be decoupled from public pronouncements
about relational stance. Recognizing the role of
norms and power relations, a discussion of trust
as a discursive resource is presented. While pur-
ported to deliver universal bene?ts, category man-
agement can masquerade or dissemble a variety of
self-interested actions, thereby camou?aging price
pressures, tight ?nancial control and management
expediency in the rhetoric of ‘consumer respon-
1
In this context, categories refer to distinct, manageable
groups of products and services that consumers perceive to be
interrelated and/or substitutable in meeting their needs. A key
element of category management is serving ‘the consumer’
through re-organizing the store around categories of products
that re?ect those in her/his ‘mind-set’.
2
Moreover, there is currently a disjuncture in the literature
on business-to-business exchange between advocates of trust
and collaboration, based on openness, reciprocity and mutual
adjustment on one hand (e.g. Spekman et al., 1999), and
advocates of a power perspective based on adversarial and
competitive exploitation on the other (e.g., Cox, 1999).
630 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
siveness’ and ‘trust-based collaboration.’ In pro-
viding a detailed empirical analysis of some of
the di?culties encountered in realising the ideals
of trust on one hand and pressures to increase
pro?tability on the other, it is suggested that the
simple dichotomy of trust and distrust in the
accounting literature should be expanded to
embrace manipulation and the use of trust as a
discursive resource (see Hardy, Phillips, & Law-
rence, 1998).
The paper is structured in six sections. Since the
notion of trust is poorly understood and has only
recently attracted the attention of academic
accountants, the next section discusses a set of ter-
minological and conceptual issues that require
clari?cation. This is followed by a critical exami-
nation of the emerging body of accounting
research dealing with trust. An overview of the
methodology employed in the study and some
recent developments in the UK retail sector are
then presented. The empirical analysis of this
paper follows, comprising an examination of the
di?usion of category management across the UK
retail sector and a single ?eld study of category
management practice between a large UK retailer
and a multinational supplier. The ?nal two sec-
tions present an analysis synthesizing the ?eld
study and sector-level ?ndings and conclude the
paper by o?ering a set of suggestions for future
research.
Trust and trustworthiness between organizations
Although trust has received extensive attention
in recent years, considerable conceptual confusion
regarding its meaning and role remains (Misztal,
1996). This situation has been described variously
as a ‘‘confusing potpourri’’ (Shapiro, 1987) and ‘‘a
verbal and conceptual morass’’ (Barber, 1983).
Empirical studies on trust development in the
social sciences are frequently situated in the con-
text of intimate personal relationships or experi-
mental economics laboratories, neither of which
can be immediately translated to an organizational
context (Mayer, Davis, & Schoorman, 1995).
Indeed, the globalization of business, network
structures and the proliferation of impersonal
work technology mean that long standing personal
relationships amongst managers are increasingly
uncommon. Whilst this does not mean that trust
should be abandoned as a meaningful concept
for managerial interaction, it raises questions
about the extent to which trust is practiced in
inter-organizational settings. In particular, there
has been little research focusing on trust in asym-
metrical power relationships, in spite of the fact
that such relationships are widespread.
This paper contends that a complex phenome-
non like trust cannot be universally de?ned to suit
any theoretical purpose. Rather, de?nitions should
be elaborated to ?t speci?c research issues and
study aims, whereby di?erent aspects of trust –
such as vulnerability, dependence and commit-
ment – become important. This paper endeavours
to locate the analysis of trust in the context of
inter-organizational relations. It adopts the de?ni-
tion of Mayer et al. (1995), which has been widely
supported by other supply chain scholars (e.g.,
Lane & Bachmann, 1998). In these terms, trust
refers to ‘‘the willingness of a party to be vulnera-
ble to the actions of another party based on the
expectation that the other will perform a particular
action important to the trustor, irrespective of the
ability to monitor or control that other party’’
(Mayer et al., 1995, p. 712). The ‘‘particular action
important to the trustor’’ typically includes ful?ll-
ing obligations, adopting a long-term perspective
as well as not deliberately taking actions that
would result in negative outcomes for the ?rm.
To this end, Anderson, Lodish, and Weitz (1987,
p. 87) de?ne trust in terms of a willingness ‘‘to
accept short-term dislocation’’ because the trustor
‘‘is con?dent that such dislocation will balance out
in the long-run’’ while Fukuyama (1995, p. 26)
de?nes trust as the expectation of ‘‘regular, honest
and co-operative behaviour.’’ Trust is placed hav-
ing taken into consideration the characteristics
(e.g., competence, integrity, benevolence) of the
trustee (Rousseau, Sitkin, Burt, & Camerer,
1998). This narrower, more pragmatic de?nition
can be contrasted to de?nitions of trust advanced
in the context of kinship or intimate personal
relationships (see, for example, Baier, 1994; Gid-
dens, 1984). According to the de?nition, trust is
neither open-ended nor unconditional; agents in
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 631
inter-organizational settings are not expected to
consistently endure harm and routinely neglect
self-interest.
Having arrived at a basic de?nition, it is impor-
tant to delineate some of the primary contextual
issues surrounding the development of trust. Three
important delineations are the distinctions
between: (i) trust and trusting behaviour; (ii) inter-
personal trust, inter-organizational trust and sys-
tem trust (trust in techniques, rules, procedures
and systems) and (iii) trust and trustworthiness.
It is hoped that these distinctions will provide
leverage for accounting researchers for under-
standing how trust operates.
Trust versus trusting behaviour
Mayer et al. (1995) emphasize the di?erence
between trust and trusting behaviours, arguing
that trust is the willingness to be vulnerable (or
accept risk) while trusting behaviour is the assum-
ing of the risk (p. 724). Within an economic frame-
work, trusting behaviour can be described as a
risky advance concession in the expectation of a
positive outcome without any explicit contractual
security or control measure against opportunistic
behaviour.
Interpersonal trust versus inter-organizational trust
versus system trust
It is clear that trust is most often conceived of as
a construct that occurs through interaction
between individuals. At the individual level, Gid-
dens (1984) argues that trust stabilizes the individ-
ual’s sense of ontological security and facilitates
his daily interactions and encounters. In the con-
text of a buyer–supplier dyad, while some ongoing
relationships remain predominantly transactional
with a focus on gains and losses, both the history
and nature of interactions can shape the form
and nature of trust between individual organiza-
tional actors. Repeated cycles of exchange, risk
taking and successful ful?lment of expectations
strengthen the willingness of trusting actors to rely
upon each other. In arguing for an ‘‘embedded-
ness’’ approach, Granovetter (1985) rejects the
characterization of inter-organizational relations
as being composed of autonomous actors ato-
mised from their social moorings. When faced with
the choice, Granovetter argues that individuals
and organizations invariably opt to transact with
those of known reputation or, better yet, with
those with whom they have had past, positive deal-
ings. Accordingly, ‘‘inter-organizational trust’’
refers to two sets of individuals, each of which is
trusting the organization of which the other is a
member (Blois, 1999, p. 210).
Giddens argues that personal trust is increas-
ingly being replaced by trust placed in ‘‘systems
of technical accomplishment or professional exper-
tise that organize large areas of the material and
social environments in which we live today’’ (Gid-
dens, 1990, p. 27). He de?nes an abstract system as
one based on expert knowledge of any type,
depending on rules of procedure transferable from
industry to industry.
3
This trust is often pragmat-
ically based upon the experience that systems are
underpinned by rigorous, objective and unbiased
expertise and ‘‘generally work as they are sup-
posed to’’ (Giddens, 1990). Trust in abstract sys-
tems is likely to be re?exively reinforced through
knowledge or experience of its e?ective or reliable
operation. That is, abstract systems are in constant
revision in the light of new knowledge and skills,
giving individuals the power to in?uence the re-
ordering of the new social relations.
Trust versus trustworthiness
Trust is a relational concept; it is always depen-
dent on trustworthiness. In most of the literature
relating to trust, trustworthiness is mentioned only
rarely or in passing, as if trust were only dependent
on a unilateral act of will by people in the role of
trustors (cf. Armstrong, 1991). However, the rela-
3
This notion connects with Zucker’s concept of institutional-
based trust. Zucker (1986) points out that much of the personal-
based trust of the 1700s and early 1800s in the United States
was displaced in the late 1800s because the populace became
much more heterogeneous through immigration. Hence, it
became necessary for system trust – trust in institutions (e.g.,
banks, courts, regulations, professional associations) – to ?ll in
for the absence of personal trust.
632 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
tional character of trust is one of the features
which distinguishes it from mere con?dence or
expectation. Hence the overwhelming emphasis
on the former rather than the latter is peculiar,
especially as trust relations can be initiated by
the trustee (‘trust me’). One of few researchers to
expressly distinguish between trust and trustwor-
thiness, Hardin (2002, p. 37) points to an impor-
tant di?erence between the two concepts as
follows:
. . . Trust and trustworthiness are not analo-
gous or symmetrical, because one can be dis-
posed to trustworthiness without any risk. A
relationship cannot make you worse o? if
you are merely trustworthy in it. It can, how-
ever, make you substantially worse o? if you
are trusting in it.
According to Giddens, while ‘‘trust necessarily
entails the trustworthiness of the other’’, it ‘‘pre-
sumes a leap to commitment, a quality of ‘faith’
which is irreducible’’ (1991, p. 19). That is, trust-
worthiness provides a mechanism that temporarily
suspends uncertainty, thus making interpretative
knowledge momentarily certain and enabling a
leap to favourable (or unfavourable) expectation.
Metaphorically speaking, ‘‘all trust is in a certain
sense blind trust’’ (Giddens, 1990, p. 33).
4
Dimensions of trustworthiness
Trustworthiness is a characteristic of the trus-
tee, and may stem from several perceptions held
by the trustor about the trustee. According to
the parsimonious model developed by Mayer
et al. (1995), the perceptions of the trustor that
drive trustworthiness relate to the trustee’s ability,
benevolence and integrity. The trustee’s ability
refers to perceptions of the technical, cognitive,
organizational, and communicative competencies
of the trustee. In short, trustworthiness requires
some sense that the trustee is able to perform in
a manner that meets expectations. Integrity refers
to perceptions relating to whether the trustee
espouses, demonstrates and adheres to a set of
principles and values that the trustor ?nds accept-
able. In contrast, benevolence refers to perceptions
one holds regarding the intentions of a partner
towards the relationship, particularly in refraining
from opportunism. Although these dimensions are
likely to be linked to each other, they each contrib-
ute separately to in?uence the level of trust within
a relationship. However, ability and integrity are
likely to be most in?uential early in a relation-
ship, as information on one’s benevolence requires
more time to emerge (Tomkins, 2001). Traditional
trust-building mechanisms include physical pres-
ence, past actions, and legal and regulatory
frameworks.
In the area of system trustworthiness, notions
of competence and integrity are likely to be appli-
cable. To this end, Giddens (1991, pp. 89–90)
acknowledges lay persons’ respect for science and
technical specialism. Of particular relevance here
is the way that calculation is widely seen as desir-
able in social and economic interaction. In his
engaging attempt to account for the prestige and
power of quanti?cation in the modern world, Por-
ter (1995) characterizes calculation as a project to
standardize reasoning and present impersonal
standards of ‘objectivity.’ According to Porter,
quanti?cation is primarily a technology of distance
and a means by which conclusions can be rendered
more ‘objective’ and ‘trustworthy.’
In this paper, accounting practices and their
associated discursive representations are seen as
imparting considerable abstract system trust-
worthiness on ‘new’ ideas, governance structures
and applications. An enduring image of
accounting practices identi?ed by researchers is
that of an objective, faithful and unbiased re?ec-
tion of organizational reality (McSweeney, 1997).
Depicting accounting as an objective, unbiased
means of measuring pre-existing reality enables
speci?c accounting practices to be advocated and
4
To this point, trust has been treated as a situational
construct. It should be noted that trust can also be conceptu-
alized as a cross-sectional, cross-personal construct, encom-
passing individual characteristics of the trustor. Mayer et al.
(1995) refer to ‘‘propensity to trust’’ to describe this notion.
This concept has its roots in personality psychology and
recognizes that individuals develop over time a generalized
expectation about the trustworthiness of others. Dispositional
trust is thus a within-party factor that will a?ect the likelihood
that a particular person will trust other individuals.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 633
introduced in particular settings by proponents of
reform. In this way, accounting, and its associated
discursive representations, can be seen as a means
by which organizations incorporate, or are seen to
incorporate, rational and trustworthy ways of
organizing and monitoring their activities.
Trust, then, is a multi-faceted concept insofar as
it is possible to talk about trust as both a mental
state and a set of behaviours, di?erent objects of
trust and various dimensions of trust. These delin-
eations are drawn upon in the next section, which
reviews the state of the accounting research relat-
ing to trust and also serves to inform the analysis
of the ?eld study.
Trust in the accounting literature
This section provides a review of research relat-
ing to trust in the extant accounting literature with
the intent of highlighting its current status and
shortcomings as well as opening up possibilities
for rendering a more nuanced understanding of
trust as an inter-organizational phenomenon.
Given the rise of research examining trust in other
disciplines, the paucity of studies in the accounting
literature that explicitly consider trust is somewhat
surprising. A review of 11 in?uential accounting
journals
5
during the period 1985–2005 reveals only
19 publications where trust was mobilized as a sig-
ni?cant concept. Appendix 1 presents an overview
of these articles.
While this emerging body of the literature has
signi?cantly enriched the accounting literature, it
remains clouded with confusion. Appendix 1
reveals that this small body of research (compris-
ing only 11 ?eld-based studies, four theoretical
studies, two experiments and two archival studies)
is marked by a lack of clarity in its conceptualiza-
tion of trust as well as great variation in methodo-
logical approach, epistemological foundation and
unit of analysis. In particular, the di?erences
between trust, trustworthiness, talk about trust
and trusting behaviour are not well de?ned.
Nonetheless, a number of common threads
and linkages can be drawn from this emerging
body of the literature. Drawing on an economic
perspective, the relation between information
and trust is frequently said to run in two contrary
directions (Dekker, 2004; Jacobs & Kemp, 2002;
Lang?eld-Smith & Smith, 2003; Tomkins, 2001).
First, trust between partners can reduce costs of
negotiating and monitoring agreements by avoid-
ing the need for complex contingency arrange-
ments. Second, if the costs and rewards of
agreements can be veri?ed at a low cost, then
the need for trust is reduced. The implication is
that management accounting can contribute
directly to the veri?cation problem so that there
can be more reliance on self-enforcing agreements
and less reliance on trust. This position has been
challenged in both theoretical (Tomkins, 2001)
and empirical research (Dekker, 2004; Lang?eld-
Smith & Smith, 2003). One general theme of the
emergent literature is the notion that the relation-
ship between accounting information and trust
changes over time and is not characterized by a
simple monotonic relation. Tomkins (2001) sug-
gests that trust is grounded in learning from expe-
rience, for example, by way of performance
evaluation. His primary thesis is that the learning
process itself is dependent on information that,
up to a certain point, is needed in order to gain
trust. He distinguishes between (1) information
needed to create and support continuing trust
(Information Type 1) and (2) information needed
for mastery of events (Information Type 2) and
argues that both types exhibit, over time, an
inverse U-shape function between trust intensity
and information. This further suggests that a
life-cycle type model of accounting ‘‘information
redundancy’’ could be constructed based upon
the concept of trust.
Trust research in accounting has been largely
focused on two areas: inter-organizational rela-
tionships (?ve studies) and performance evaluation
(four studies). A number of inter-organizational
5
Accounting, Auditing and Accountability Journal,
Accounting, Organizations and Society, Accounting Review,
Contemporary Accounting Research, Journal of Accounting
and Economics, Journal of Accounting Literature, Journal of
Accounting Research, Journal of Finance, Journal of Manage-
ment Accounting Research, Journal of Accounting and Public
Policy, and Management Accounting Research.
634 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
practices have been seen to be consistent with col-
laborative relationships premised on trust and
mutuality. These include open book accounting,
gain sharing, joint performance measurement and
joint cost control (see Chenhall & Lang?eld-Smith,
2003; Dekker, 2004; Seal, Cullen, Dunlop, Berry, &
Ahmed, 1999; Tomkins, 2001). Implicit in these
arguments is the notion that accounting can pro-
vide a forum and common language for learning
and co-ordination. In the area of performance eval-
uation, trust has been seen as both an important
moderating variable (Gibbs, Merchant, Van der
Stede, & Vargus, 2004) and an antecedent to e?ec-
tive performance measurement (Johansson &
Baldvinsdottir, 2003).
While the emergent body of work on trust in the
accounting literature has yielded important
insights, it is not without serious limitation. It is
noteworthy that much of the existing research con-
templates, and concludes with a call for further
research (Geitzmann, 1996; Tomkins, 2001).
Drawing on critiques of the way trust has been
used in other management disciplines (Blois,
1998), four broad weaknesses are apparent in the
research conducted to date.
First, much of the work uses the term trust
when referring to related concepts such as co-
operation, reciprocity or stability. Gibbs et al.
(2004), for example, operationalize trust as the
length of employee tenure. Coletti, Sedatole, and
Towry (2005) conceptualize trust as the perceived
likelihood that another person will co-operate,
absent any economic incentives to do so. Momen-
tary acts of co-operation or stability do not pre-
suppose trust; co-operation may spring from a
variety of causes unrelated to trust such as the
mediation of third parties, situational norms,
coercion and other forms of power exploitation.
Prior research has failed to delineate the di?er-
ences between trust, trustworthiness, trust-based
behaviour and related concepts such as co-opera-
tion and reliance.
Second, much of the work on trust between
organizations is generally characterized by a nor-
mative perspective that classi?es trust as ‘good’
(e.g., Coletti et al., 2005; Gibbs et al., 2004;
Tomkins, 2001), pacifying uncertainty and
creating stability, and mistrust as ‘bad’. The impli-
cation of much work is that the greater the trust,
the greater the performance re?ecting the ‘‘let’s
all pull together’’ sloganeering in much of the pre-
scriptive literature. Exaggerating the importance
of trust produces analyses which are idealist,
attributing to trust outcomes which often have
more to do with material circumstances and
conditions.
Thirdly, in spite of some recent realist (King,
2002) and interpretive ripples (e.g., Neu, 1991), a
functionalist emphasis dominates in the literature
(e.g., Chenhall & Lang?eld-Smith, 2003; Coletti
et al., 2005; Gibbs et al., 2004; Ross, 1994). Such
a perspective tends to focus on surface dynamics
and to ignore the fact that power can be obfus-
cated behind a fac¸ade of trust and collaboration,
and can be used to promote vested interests and
exploit weaker partners (Hardy et al., 1998). Many
of the problems are due in no small part to the nat-
ure of trust, as it represents a phenomenon on the
edge of reason that manifests itself in idiosyncratic
ways (see Bachmann, 2001, on the ‘‘fuzzy logic’’ of
trust). A notable exception to this is the research in
experimental economics on ‘cheap talk’ (Cooper,
DeJong, Forsythe, & Ross, 1989), cited by King
(2002), which suggests that exaggerated claims
about trusting intent can be used in an attempt
to strategically create trust (and then act
opportunistically).
Finally, it has been widely argued that the role
and degree of trust required takes di?erent forms
in di?erent types of relationships (Whitley, 1999).
However, in many of the cited references there is
a tendency to treat trust as a blanket concept
(e.g., Dekker, 2004; Lang?eld-Smith & Smith,
2003; Van der Meer-Kooistra & Vosselman,
2000) rather than one that is highly context-
speci?c.
In summary, an examination of the emerging
body of work in accounting dealing with trust indi-
cates a lack of clarity in its conceptualization.
Drawing on Giddens’ theory of structuration, this
article attempts to provide insights into the way
that accounting is implicated in the constitution
of trust in the UK retail sector. Speci?cally, indus-
try-level ?eld research demonstrates the impor-
tance of trust in abstract systems in the spread of
category management. On an inter-organizational
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 635
level, detailed longitudinal evidence of the rela-
tionship between a leading UK retailer and sup-
plier is presented that is intended to render a
more nuanced ?eld-based conceptualization of
trust and pierce normative, surface-level images
of trust. In spite of pervading trust ‘talk’, relations
are shown to be inherently fragile as new informa-
tion is re?exively absorbed by participants.
Research methodology
In his theory of structuration (Giddens, 1979,
1984, 1990), Giddens sets out to reconcile two
divergent research traditions: the ‘‘objectivist’’
tenets of structuralism, with its emphasis on struc-
ture, and the ‘‘subjectivist’’ phenomenological and
hermeneutic traditions, where the human agent is
the primary focus. In so doing, Giddens rejects
the extreme positions in the agency-structure
debate, positing in the process that human action,
while institutionally constrained, also in?uences
and alters institutional arrangements, or struc-
tures, in the process of ongoing use. This forms
Giddens’ seminal concept of the duality of struc-
ture (see Ahrens and Chapman (2002) for a recent
application in the accounting literature). Accord-
ing to Giddens’ schema, structural properties
(signi?cation, domination and legitimation) are
constantly reproduced from social interaction
(communication, power and sanctions) by means
of the modalities (interpretative schemes, facilities
and norms) drawn on by knowledgeable, re?exive
actors. In this paper, the aim is not to illustrate the
value of this social theory, but to use it as a ‘‘sen-
sitizing device’’ to explore research problems with-
out ‘‘cluttering up’’ data with ‘‘an array of abstract
notions’’ (see Giddens, 1984, pp. 326–327).
Structuration theory eschews a technocentric,
positivist view of accounting structures, arguing
that actors mediate technical templates and may
appropriate structures in an idiosyncratic fashion.
Accordingly, Giddens’ structuration approach is a
process-oriented theory that has a qualitative
method corollary. The ?eld research reported here
was conducted over a period of three years and
six months between December 2000 and May
2004, with follow-up visits and presentations a
year later. Data was collected in two phases. In
the initial phase, 34 interviews were conducted
at 8 major retailers and 11 suppliers across the
UK between January and September 2001. This
phase was concerned with identifying key issues
in the sector and negotiating further access.
Respondents during this stage were quoted
directly (that is, identities were not anonymised)
and the results of this research are presented in
the next section. The second phase of data collec-
tion involved a single in-depth, longitudinal study
of a category management relationship between
ConCo, a large UK independent supermarket
chain, and PulpCo, a multinational paper prod-
ucts supplier. In this second phase of research,
the identities of individuals and the two ?rms in
the ?eld study were altered to preserve anonymity
as the research was conducted on the basis that
the site and participants would not be disclosed
in publication. The data used in the second phase
comprised 31 interviews (structured, semi-struc-
tured and unstructured), non-participant observa-
tion at three buyer–supplier meetings and two
internal meetings, inter-organizational written
and verbal communications, e-mail messages,
internal memoranda, and performance reports as
well as a variety of secondary sources including
company literature and ?nancial reports, the
Competition Commission (2000) report ?ndings,
press releases and articles. In addition, interviews
were conducted with representatives from two
large UK procurement management consulting
companies and two representatives from IGD,
the peak research organization and discussion
forum for the UK retail sector. Since this research
focuses on the role of particular management
accounting techniques brought together under
the banner of category management and not the
accounting function per se, the actors followed
were from a variety of disciplinary backgrounds
including buying, accounting, marketing and
senior management. The contention here is that
a study of this kind has the potential to provide
insights into the relationship between trust and
accounting hitherto unrecognized in the account-
ing literature.
The notions of trust and trustworthiness were
assessed from multiple perspectives. Public sources
636 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
were examined to ?nd references to trust and trust-
worthiness. During ?eld observations, the dimen-
sions of trust and trustworthiness that respondents
attended to during interviews and discussions were
noted and followed up. These responses were trian-
gulated using observations from meetings, letters,
communications and memos.
In an e?ort to minimize the risk of improperly
interpreting atypical events, the data analysis
undertaken adapted the three principal methods
proposed by Eisenhardt (1989): (i) arranging the
interview transcripts and notes into a chronologi-
cal order and identifying common and unique per-
ceptions of events, (ii) dissecting and re-organizing
the original transcripts and notes around key
events, and (iii) comparing emerging ?ndings with
existing research in supply chain accounting to
reveal the extent of congruence with previous
research. The analysis of ?eld data was thus
characterized by ongoing hypothesizing and theo-
rizing, and discarding and re?ning of suitable
theories.
Context: recent developments in the UK
supermarket sector
Napoleon’s oft-quoted characterization of the
UK as ‘‘a nation of shopkeepers’’ is clearly no
longer sustainable. Supermarkets now handle over
80% of the UK grocery market and continue to
encroach on traditional outlets, with second-tier
chains successfully expanding with smaller formats
and also experiencing substantial growth in sales
(which has in turn fed considerable recent merger
and acquisition activity). Although attempts to
characterize market-level bargaining power
dynamics is a fraught exercise, it is clear that the
major retailers possess both signi?cant buying
and selling power. In 2000, only eight suppliers
had sales representing 1% or more of Tesco’s
(the UK’s largest supermarket chain) purchases,
and only 230 suppliers had sales representing more
than 0.1%. Internationally, Wal-Mart Stores’ reve-
nues are six times those of Procter & Gamble
Company (Competition Commission, 2000).
In the United Kingdom retail sector, arguments
based on the ‘power of trust’ have been instrumen-
tal in a growing discourse about the need for
buyer–supplier collaboration. In the face of the
entry of technological innovation, intense competi-
tion, ongoing concerns about the treatment of
‘vulnerable’ domestic suppliers and maturing mar-
kets, many commentators have called for a shift in
manufacturer–retailer interaction in the UK retail
sector towards closer, deeper, more trust-based
relations (Competition Commission, 2000; Curry,
2002; IGD, 1999). A key element of this perceived
shift has been the emergence of category manage-
ment across the sector. The term ‘category man-
agement’ has many de?nitions and is somewhat
ambiguous, denoting an array of buyer–supplier
relationships ranging from computer-aided space
planning to full blown partnerships. The concept
is built on two basic premises: (i) the supply base
is a source of competitive advantage that requires
strategic investment; and (ii) dealing with fewer,
larger and more sophisticated suppliers reduces
risk and transaction costs. Category management
has been presented as a catalyst for the formation
of ‘‘new’’ retailer–supplier relationships and is a
useful focus around which to explore the manage-
ment accounting practices in ‘‘deep’’ retailer–sup-
plier relationships where trust may be expected
to play a role.
Category management comprises a leading sup-
plier playing a proactive role in consumer data
analysis, assortment and allocation of space in
relation to particular categories. Category man-
agement is closely related to the idea of partner-
ship sourcing promoted in the automotive and
electronic industries. Working in tandem, the cat-
egory captain and a category manager from the
retailing chain are expected to integrate processes
and activities and develop a detailed category plan
for the supermarket that sets out which SKUs
(stock-keeping-units) it will carry, their retail
prices, promotional programs, and a ‘‘planogram’’
(a type of architectural drawing of the space each
item will occupy on the store’s ?xtures) showing
the layout, space and format of the o?ering
(IGD, 2002). This is intended to represent a
signi?cant step away from the buyer- and prod-
uct-centred practices of the past (Dapiran &
Hogarth-Scott, 2003).
There is no uniform practice of category
management; instead, each retailer develops its
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 637
own practices and approach (Competition Com-
mission, 2000). What is clear is that category man-
agement embodies a ‘‘fetish of calculation’’
(Bloom?eld, 1991). It suggests a number of roles
for management accounting aimed at enabling
collaborative relations, which include open book
costing, joint performance measurement, joint
forecasting and risk management approaches,
pricing guidance, consumer pro?tability analysis,
cost analysis and formal pro?t sharing arrange-
ments. Category management can be viewed as
having many of the distinctive elements of an
abstract system as de?ned by Giddens. It is clear
that the intention was to create a trustworthy sys-
tem that buyers and suppliers could build on to
make choices and decisions. In many accounts,
category management concepts are accorded a
central role in attempts to stay ‘close to the cus-
tomer’ and enable agents from both ?rms to make
the ‘right’ contribution to the success of the inter-
organizational arrangement. Pledging more ‘fact-
based’ expert knowledge and quantitative data,
category management has become a global model
for management buyer–supplier relations in the
UK retail sector (IGD, 2002).
Calculative practice and system trust: the
legitimation of category management in the UK
retail sector
As a meaningful practice, early category man-
agement work is often said to have started at
Wal-Mart in the United States in the food sector,
which remains the centre of category management
activity (IGD, 2002). As it emerged, category man-
agement comprises a vast set of information
sources and calculative practices. The application
of these practices combined with the structured,
information-rich approach to decision-making
o?ered a means of negotiating complex political
and social problems such as allegations of indis-
criminate pro?teering from suppliers and failure
to serve the customer’s best interests. Resulting
decisions and processes acquired an image of pro-
cedural fairness, objectivity and neutrality, and
thus become di?cult to critique. Both retailer
and supplier interviewees argued that category
management represents a more systematic
approach to decision-making:
6
There is a view in the industry that shelf space
is about . . . who knows who. That it is a closed
shop where the retailer sets the bar [holding
his hand above his head] and says ‘jump’. I
think category management with its more
structured approach to making decisions is a
way of trying to introduce more struc-
ture. . . [and] merit into listing decisions.
We’re now managing out shelf space.
– Group Buying Director and Managing
Director of Kwik Save, Somer?eld (12 March
2001)
The most valuable part of it is the research.
Good category captains listen to the consumer
and what they say, which usually comes out of
the research they do. . . They ask people what
they do with the product or what they might
use instead, so that they can broaden their
scope. For us, market research o?ers an insight
into the way consumers shop the category, how
they make decisions in-store and what new
products are wanted by the public. . . Beer is a
destination category for many retailers . . . one
in ?ve trips to a supermarket in the UK are dri-
ven by the beer purchase. Research also indi-
cates that 70% of purchase decisions are
planned ones. Beer is an important category
for supermarket retailers, but they should also
consider that it is critical to have the brands
and packages the shopper is looking for . . .
– UK Vice-President, Anheuser-Busch (10
April 2001)
The calculative practices underlying category
management served the interests of a variety of dif-
ferent stakeholders. Category management was
framed in a rhetoric that underlined the notion
of making the entire supply chain accountable to
the consumer and made use of externally legiti-
6
Note that the initial round of retailer and supplier interviews
were not anonymised, however access to the indepth case study
?rms, ConCo and PulpCo, was negotiated on the basis of
anonymity.
638 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
mated fashionable words such as ‘‘value-added-
ness’’ and ‘‘customer-focus’’ in order to drive the
process of structuring forward. Many respondents
from supplier organizations suggested that the
development of a corporate category management
strategy was intended to convey the degree to
which their management of the business was
increasingly ‘rigorous’ and attentive to retailer
demands and needs. It is clear that category man-
agement capability is increasingly seen as a source
of di?erentiation among larger suppliers. Sensitiv-
ity analysis and ?nancial planning were put for-
ward by many respondents as a means to
achieving objectivity in analysis, certainty in con-
clusions and trustworthy solutions. In particular,
customer accounting and analysis were seen as
key in establishing objective solutions:
We do research speci?c to shelf-set con?gura-
tion, amount of linear meters, and number of
facings so that we can understand the impact
on various con?gurations throughout the cer-
eal aisle on sales rates, pro?ts and volumes
for retailers . . . and I think this has helped
some of our relationships with the big players.
Hopefully we both listen to each other.
– Category Manager, Kellogg’s (22 February
2001)
Further, learning such techniques amounted to
the acquisition of a managerialist cultural capital
by retail buyers. In a real sense, the di?usion pro-
cess was an attempt to abandon a previous ‘buy-
ing’ worldview and replace it with the language
of managerialism, objective rigour and calculation.
The rigour of category management makes it pos-
sible for buyers and purchasing professionals to
di?erentiate themselves from prior practices and
communicate a new identity.
Reliance on hard facts and analysis is really
what buying at Tesco is all about these days.
The days of just negotiating hard – trading
on margins – are gone. The profession has
moved on from that . . .
– Marketing Director, Tesco (13 June 2001)
As a category manager, I can now pull up
desktop demographics, Spectra information,
market share and margin numbers and market
information from Category Business Planner
[a software package designed by AC Nielsen].
Even three years ago that wasn’t possible. In
the past, we never identi?ed trends and oppor-
tunities until the manufacturer came in. . .
– Chilled Foods Category Manager, Safeway
(9 March 2001)
Buying sta? interviewees made extensive use of
management accounting terminology such as life-
cycle costing, activity-based costing, total quality
management, total cost of ownership, on-time
delivery and ?exible manufacturing. From the late
1990s onwards, the category management process
was quickly incorporated into syllabi o?ering pro-
fessional accreditation such as the Post Graduate
Certi?cate in Food & Grocery Industry Manage-
ment, o?ered by IGD, with speci?c modules drawn
from management accounting topics such as
activity-based costing, models of inventory man-
agement, customer pro?tability analysis and per-
formance measurement.
The concept of category management also
enabled information system specialists to legiti-
mate and mobilize managerial support for organi-
zational change programmes aimed at using
information technology to capture, codify and
communicate quanti?ed ‘‘knowledge’’. The softer,
collaborative side of category management became
de-emphasized in this process while the ‘‘rigour’’
and ‘‘objectivity’’ was foregrounded.
The rigour and calculative infrastructure of cate-
gory management was instrumental in defending
counter allegations against category management.
The notion that a manufacturer would provide
advice about the pricing and promotion of compet-
itive brands has created a stir among regulators and
anti-trust lawyers (especially in the United States),
prompting unintended consequences such as law
suits (see, for example, Conwood v. U.S. Tobacco
290 F.3d768) andclaims that category management
is unfairly anti-competitive to smaller suppliers and
consumers (through rationalization of inter-brand
competition to achieve market stability). In public
channels, quanti?ed analyses, benchmarks and per-
formance measures were mobilized against persist-
ing allegations of big ?rm bias, anti-competitive
practice and impartiality (e.g., IGD, 2002).
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 639
Over the years, suppliers have been pushing
their brands and brand extensions in an already
over-segmented market just to get their prod-
ucts listed. . . um. . . we’re at risk of losing focus
on the category itself. Category management
changes things but at the end of the day there
is still a fair bit of cat and mouse involved. They
will naturally favour their own brands and we’ve
got to really watch for that. But we’ve been
doing this for decades and the numbers in the
system makes bias pretty easy to identify.
– Marketing Director, Tesco (16 July 2001)
Calculative practices thus provided both a strat-
egy for dealing with distrust and an answer to the
demand for impartiality and fairness. Category
management’s accounting-based techniques con-
tributed to system trustworthiness and came
to be seen as a symbol of e?ciency and objectiv-
ity across categories throughout the UK retail
sector.
Field study: the PulpCo and ConCo category
management partnership
The ?eld research presented in this section deals
with conceptualizations of trust in the ?eld, the
relationship between trust and accounting and
the implications of the di?erences between trust
talk and trusting behaviour. It recounts a relation-
ship where management accounting practices pur-
sued under the banner of category management
operated to dissemble a variety of self-interested
actions and talk about trust was deployed largely
as a discursive resource – ultimately destroying
trust and fostering cynicism. In so doing, the
insights provided address shortcomings identi?ed
in the accounting literature and give rise to a more
nuanced understanding of trust and accounting
techniques in practice.
This ?eld study concerns the buyer–supplier
relationship between ConCo,
7
one of the UK’s
largest independent symbol retail chains with over
2100 stores and turnover exceeding £550 million in
2004, and PulpCo, one of the world’s leading
international paper products producer. This rela-
tionship can be traced back almost 20 years, dur-
ing this time, both organizations have experienced
impressive growth. The ?eld study reported here is
focused on the period July 2000, when PulpCo
agreed to act as category captain for ConCo’s
paper product category
8
until early 2004 when
the relationship was seen by representatives from
both organizations as having become unhinged.
The product range provided by PulpCo to ConCo
was relatively constant between 1999 and 2004
comprising (i) three PulpCo Toilet Tissue Brand
SKUs, (ii) two PulpCo Hand (Kitchen) Towel
Brand SKUs and (iii) a single PulpCo Facial
Towel Brand SKU. Toilet tissue constitutes the
largest category, accounting for some 66% of
sales, with the kitchen towel the fastest growing
product line. The ?eld study is presented chrono-
logically, identifying key milestones, starting in
the antecedents to, and public statements sur-
rounding the commencement of the category man-
agement relationship during 1999–2000, the
creation of performance measures and controls,
as well as open book accounting practices, by
PulpCo and growing volume of merchandise trad-
ing between the ?rms during 1999–2001 and the
growing tension and spiralling distrust between
the ?rms between early 2002 until the end of
research period in early 2004 resulting in a decline
in trading volume and fragile relations during
2004.
Growth and re-organization at ConCo
At the beginning of 1999 ConCo was the larg-
est and fastest growing independent supermarket
7
In contrast to the previous industry-wide level interviews,
the identities of organizations and individuals involved in the
?eld study have been anonymised.
8
UK household paper products (a market worth £1.44
billion in 2004) are a category in which promotions play a
signi?cant role in boosting sales and encouraging and main-
taining brand loyalty. Both ‘‘above-the-line’’ advertising and
‘‘below-the-line’’ promotional allowances play a major role in
fuelling market growth. In spite of the notable brand power of
the largest tissue brands, the market for household paper
products is characterized by a high level of retailers’ own-label
sales.
640 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
chain in the UK; as such it was widely heralded
as a success story, running counter to the script
of market domination by the ‘multiples’ (the
major UK supermarkets). ConCo’s strategy was
focused around small format stores (2000–15,000
square feet), ‘High–Low’ pricing
9
and an exten-
sive distribution centre co-ordinated through a
London-based head o?ce team. Although the
company had experienced rapid growth, its
operational structure had remained stable. Its
head o?ce prided itself on its ‘lean’ operation:
outsourcing buying in several categories to a large
Buying Group (for which it was clearly the prin-
cipal client) and managing a small number of sup-
ply relationships deemed to be strategically
signi?cant.
In 1999, after years and rapid growth and
expressions of takeover interest from two of the
UK’s largest supermarket chains, several of Con-
Co’s member retailers began to express discontent
about the e?ciency and service quality of ConCo’s
central o?ce. Largely as a result of these criti-
cisms, in March 1999, senior ?gures within ConCo
resolved to strategically withdraw from the Buying
Group. In order to recon?gure and expand the
scope of ConCo’s buying operations, a new Trad-
ing Director was appointed shortly afterwards.
Having been headhunted from Sainsbury’s Cate-
gory Management Implementation Team, he
o?ered many years of direct buying experience
across a range of categories.
Trust and the initial foray into category
management
Shortly after arriving at the company, the
Trading Director unveiled a plan to implement a
category management structure at ConCo to
‘‘modernize and rejuvenate the organization’s
operations’’, rationalize the supply base and out-
source important in-store merchandising and con-
sumer research roles. In order to facilitate this
process, in mid-1999, the Trading Director
engaged a consulting ?rm (the Partnering Group)
for initial guidance on category management
implementation. Paper products were designated
as one of the four initial product categories to
adopt a category management structure, due to
the Trading Director’s direct buying experience
in the category. Working in concert with a dedi-
cated Paper Products Category Manager, the
Trading Director sought to showcase the paper
products as an exemplar for the rest of the orga-
nization. By December 1999, ConCo had been
restructured around 52 categories. The Trading
Director, who sat below the CEO, controlled 15
category managers (formerly ‘‘buyers’’). Each cat-
egory manager had responsibility for several
product categories and, according to the Trading
Director, was responsible for ‘‘working with ven-
dors, selecting merchandise, negotiating prices
and co-ordinating promotions’’.
PulpCo, who had publicly embraced category
management in 1998 largely as a result of the rise
of the concept among major UK retailers, were
an obvious and uncontested choice as the
category’s initial preferred supplier and category
captain. In 1999, PulpCo supplied ConCo with
over £18 million worth of goods across all paper
products lines. This made it clearly the largest
supplier within ConCo’s paper products category,
with sales volumes approximately twice as large
as ConCo’s own-label o?ering (together these
accounted for over 90% of sales in paper prod-
ucts in 2000). PulpCo had a dedicated Account
Manager who interfaced with ConCo. The
Account Manager was responsible for all interac-
tion and communication with ConCo, conveying
market insights developed by PulpCo’s Category
Business Unit and co-ordinating internal
marketing.
The consecration of the category management
relationship was a whole-day workshop at
ConCo’s headquarters, where two representatives
from PulpCo were invited to discuss future direc-
tions in the category and submit proposals for
store assortment, presentation, promotions and
pricing. A host of analyses – customer pro?les,
trends and preferences – were also presented. In
9
‘High–Low’ pricing refers to the practice of charging low,
competitive prices in certain designation categories (such as
milk and bread) while seeking higher margins in other
categories with frequent price promotions.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 641
theory, category management was adopted to deli-
ver ‘‘service excellence’’.
10
This was clearly mani-
fest in rhetoric relating to ‘‘joint value creation’’
and ‘‘partnering’’ contained in the initial corre-
spondence between both parties generated out of
the workshop. In these o?cial communication
channels, dominant csigni?cation structures relat-
ing to ‘‘customer orientation’’, ‘‘trust’’, and
‘‘value’’ were mobilized by both organizations.
For ConCo, norms of ‘‘trust’’ and ‘‘sharing’’ were
consistently presented as integral to the category
management process.
We wanted to move away from trading on pen-
nies . . . and. . . well develop deeper relation-
ships. We wanted to work with suppliers who
understand their key category drivers for their
products and consumers . . . category captains
we could trust – who could trust us. We
wanted to share our information, which is
quite detailed and granulated. . . and optimize
that with the category captain. Our initial
impression of their planograms was positive.
We were impressed.
– CEO, ConCo (11 January 2001)
Similarly, agents throughout PulpCo’s hierar-
chy also invoked cardinal notions of customer ori-
entation and trust.
Trust is important to our category captain
relationship. Once we’ve been appointed, we
tend to give [pause]. . . commit to the retailer
in a meaningful way. We have made smaller
formats a priority in light of their recent
growth. What I mean by that is that we will
work with ConCo to make sure that they have
exactly the right products for the market.
– Manager – European Category Develop-
ment, PulpCo (1 March 2001)
These opinions corresponded closely to state-
ments about trustworthiness in o?cial channels.
The following are typical of public pronounce-
ments made by both organizations.
ConCo. . . is keen to work collaboratively with
suppliers looking to drive sales through the
convenience sector.
– ConCo statement at an IGD convention (22
January 2001)
At PulpCo we really want to work with our
retailers to build categories together. Trust is
an important part of our business
– PulpCo website (2 December 2000)
A formal memorandum of understanding was
jointly executed on 2 August 2000 that sought
to consolidate the understandings developed in
the workshop. A short-term contract was signed
the following week imposing the following
obligations:
(i) 30 day notice of contract termination with
the sole exceptions being contamination/
public health matters.
(ii) Supermarket notifying supplier one week
forward of total SKU order requirement of
which 70% is guaranteed for payment by
the supermarket if over 70% of that order
requirement has been made available by the
supplier to the supermarket at the relevant
time. Sole exception should apply to promo-
tional supplies.
(iii) Payment for SKU’s supplied and accepted,
or an amount equivalent to guaranteed order
requirement, to be made to the supplier
within 30 days without deduction.
It should be noted that both parties acknowl-
edged that contracts were rarely enforced in the
sector except in exceptional circumstances.
11
Emphasizing ?nancial outcomes within the new
category management framework
The new category management system adopted
at ConCo was cast as a fresh, proactive means of
10
The title of the initial session of the workshop was ‘‘service
excellence’’.
11
Comprehensive, formal contracts between UK supermar-
kets and branded manufacturers are rare. As Doel (1999) points
out, the power di?erentials across the retailer–supplier interface
e?ectively obviate the utility of contracts – retailers’ power
render supplier compliant in the majority of cases.
642 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
managing inter-organizational relationships that
represented a substantial departure from previous
approaches. The Trading Director characterized
pre-existing supply chain management arrange-
ments as ‘‘failing to move with the market’’ and
‘‘too reliant’’ on the Buying Group ConCo had
used for sourcing ‘‘for way too long.’’ From the
outset, he was eager to install processes and foster
outcomes which were ‘‘aligned with the new Con-
Co culture.’’ In pursuing this agenda, the Trading
Director developed and applied a set of protocols
and procedures to all 52 of ConCo’s categories.
The initial phase of the process was an organiza-
tion-wide, ?nancial outcome-oriented benchmark-
ing exercise. For each category, the Trading
Director requested that category managers com-
pile a scorecard comprises the measures featured
in Table 1.
These ?nancial measures were regularly
updated and discussed at weekly ConCo category
management meetings.
Working in concert with ConCo’s CEO, the
Trading Director also designed a rigorous score-
card of supplier ‘operational performance’ which
was compiled for every major supplier (325 in
total). This process was aimed at creating greater
control over processes and partners. Separate
metrics were developed for every lead supplier
(category captain) within each category. In
contrast to the ?nancial measures tracked by Con-
Co, the maintenance of the operational scorecard
was primarily the responsibility of suppliers. The
Table 1
ConCo’s category management performance dashboard
1. Total market size 4. Number of lines versus sales revenue
2. Gross margin 5. Percentage of total pro?ts
3. Gross margin return on investment 6. Promotional allowance/spend
4. ConCo share of total trade 7. Percentage of sales revenue
ELEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SCORE TARGET
1 SERVICE LEVEL 92.0% 92.5% 93.0% 93.5% 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5%
1 2 3 4 5 6
2 LEAD TIME 6 DAYS 5 DAYS 4 DAYS 3 DAYS 2 DAYS 1 DAY
3 ADVICE ON
AVAILABILITY
NEVER ADVISES OCCASIONALLY
ADVISES
RING/FAX NEXT DAY RING BACK SAME
DAY
FAX/E-MAIL BACK
SAME DAY
E-MAIL BACK THE
SAME DAY BUT ALSO
WITH AVAILABILITY
4 GOODS IN BOOKING ALWAYS CHASED TO
BOOK IN
BOOK IN ON DAY BOOK IN ON DAY BOOK IN NEXT DAY
P.M.
BOOK IN NEXT DAY
A.M.
BOOK IN SAME DAY
ORDER PLACED
5 TIMING OF THE
DELIVERY
ALWAYS LATE LATE 5+ TIMES A
MONTH
LATE 4-3 TIMES A
MONTH
LATE TWICE A
MONTH
ONLY LATE ONCE A
MONTH
ALWAYS ON TIME
6 WHEN DELIVERED
RIGHT GOODS
QUANTITY
ALWAYS ISSUES ON
BOTH
ALWAYS ISSUES
WITH ONE
SOMETIMES ISSUES
ON BOTH
SOMETIMES ISSUES
ON ONE
RARELY ANY ISSUES NEVER ANY ISSUES
7 PRESENTATION GOOD
FROM A H&S ASPECT
ALWAYS ISSUES ON
BOTH
ALWAYS ISSUES
WITH ONE
SOMETIMES ISSUES
ON BOTH
SOMETIMES ISSUES
ON ONE
RARELY ANY ISSUES NEVER ANY ISSUES
8 MAKING COLLECTIONS ALWAYS HAS TO BE
CHASED
CONSISTENTLY
31-50 WORKING
DAYS
21-30 WORKING
DAYS
11-20 WORKNG DAYS 10-6 WORKING DAYS ALWAYS COLLECTS
WITHIN 5 W/DAYS
9 OUT OF HOURS
DELIVERIES
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
SUPPORTS BUT NOT
AVAILABLE
NATIONALLY
AVAILABLE AT ALL
SITES
10 BACKHAUL INITIATIVES NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
SUPPORTS BUT
DOESN’T SHARE
COST INFORMATION
FULLY SUPPORT AND
SHARES CURRENT
COST
11 CO-MANAGED
INVENTORY
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
OPERATES AN
ALTERNATIVE
SYSTEM
MEMBER OF CONCO
CMI PROJECT
12 ONE POINT OF
DELIVERY FOR ALL
SITES
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
13 ELECTRONIC
COMMERCE
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
14 FORECASTING NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
15 PROMOTION
MANAGEMENT
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
16 TOTAL
Fig. 1. ConCo’s operational benchmark scorecard.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 643
structure of the operational scorecard is displayed
in Fig. 1.
Operational metrics and ?nancial measures
were thus established for every supplier and com-
municated to category managers through reports
generated by the CatMan
TM
software on a weekly
basis.
In internal meetings dealing with the implemen-
tation of category management, the Trading
Director heavily emphasized ?nancial measures
and the primacy placed on these measures clearly
overshadowed discussions relating to operational
performance or product-related trends and devel-
opments. The assemblage of plans, strategies and
tactics proposed by a consultant partner were per-
ceived by the Trading Director and Category
Manager as placing too much emphasis on
‘‘detailed process, complexity and jargon’’ and
insu?cient to the ‘‘bottom line.’’
Their templates and process diagrams are a bit
too jargon ridden. . . [with] too much emphasis
on rigid processes and far too little on answer-
ing the real question: ‘‘how does this help us
make money?’’ We didn’t see any real change.
– Account Manager, Paper Products, ConCo
(16 May 2001)
The Trading Director’s deliberate emphasis
on ?nancial outcomes became a focus for action
for actors within ConCo. Actors across Con-
Co acknowledged the role played by the
Trading Director in driving discussions and legiti-
mating activity surrounding the benchmarking
exercise.
[The Trading Director came] in with the
hard-nosed mindset of someone. . . you
know. . . coming from the multiples who had
been working in reverse auctions and bashing
heads . . . To be honest it can get a bit wearing
now and then. The convenience sector used to
be very hand-in-glove with suppliers. But
because the Tesco’s and Sainsbury’s are mov-
ing into smaller formats we’re forced to beat
up our suppliers more to compete on pricing
issues and things like that.
– Account Manager, Canned Goods, ConCo
(24 January 2001)
Drawing heavily on data assembled in the
benchmarking exercises, ConCo’s Trading Direc-
tor and Paper Products Category Manager argued
that PulpCo was failing to recognize the ‘‘value’’
that ConCo delivered. The two metrics that the
Trading Director focused attention around were
gross margin and promotional allowance (an
allowance provided by vendors to compensate
retailers for money spent in advertising or for pre-
ferred display); these ‘‘critical numbers’’ were
repeatedly underlined in discussions around the
benchmarking process.
At Sainsbury’s, we would never canvas sup-
plier support. Here at ConCo it is a big part
of what we do. For us a new product line is
an opportunity to lever money out of a supplier
rather than a imperative for securing better
service and staying ahead of the market. In
2000, PulpCo had 70–75% of the ConCo busi-
ness [in the category] and was o?ering about
1% of that in support. They were our category
captain and this ?gure lagged below the rest of
the suppliers . . . both within paper and across
other categories we expect something in the
order of 2–3%. . . So we quickly realized that
we needed to get the right range and promo-
tions to satisfy our customers and grow mar-
gins . . . We’re a lean organization and small
di?erences [in margin] are huge.
– Trading Director, ConCo (16 May 2001)
After two meetings discussing the issue failed to
assuage their concerns, in July 2001 ConCo’s
Trading Director and Paper Products Category
Manager called for a special meeting with Pulp-
Co’s Account Manager and European Category
Management Development Director seeking to
underscore ConCo’s promotional capabilities and
potential. Throughout a lengthy PowerPoint-
based presentation, the Trading Director empha-
sized the marketing and promotional capability
of the ConCo sales force, telemarketing team,
ConCo shows, ConCo News and ConCo
promotional brochures. This was aimed at pro-
moting ConCo’s image within PulpCo, with a
view to negotiating an improved promotional
allowance.
644 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
Essentially when we’d ?nished we had pro-
vided them with a fairly comprehensive and
systematic analysis and there really wasn’t
that much left to be said. They acknowledged
that we had made sense, but they still took a
bullish approach. They said that [one of Con-
Co’s major competitors] had recently come to
them with a similar sort of thing, but at the
end of the day, I just got the feeling it was like
if we didn’t like it, go elsewhere.
– Trading Director, ConCo (13 July 2001)
Not only was the meeting seen to have yielded
little by way of improvement, ConCo’s concen-
trated e?orts towards securing trade promotions
were viewed by actors within PulpCo as antitheti-
cal to deep, trust-based relations and the ‘‘spirit of
category management.’’
To a large extent, right from the start we’ve
felt they talked the partnership talk but all
the time they’re trying to reach further into
our pockets for promotions . . . They make
demands like they’re one of the Big-4 [laugh]
. . . Most independents will tell you that they’re
the next big thing – and that they should be
treated accordingly.
– Account Manager, PulpCo (19 July 2001)
Vigilance of actors from both ConCo and Pulp-
Co thus continuously alerted them to cues of
untrustworthiness and opportunistic behaviour;
and enabled them to ?ne tune their expectations
of each others’ behaviour.
Continuous performance targets and category
reviews
The Trading Director also worked hard to
introduce clear and unambiguous lines of author-
ity and responsibility for ‘bottom line’ pro?t and
attaining budgeted sales, targeted promotional
allowance, gross margin and market share targets.
The personality and ambition of the Trading
Director was a key driver in tightening expecta-
tions on buyers; he immediately set of a series of
‘‘continuous performance targets’’, requiring con-
tinual improvements in all key performance met-
rics on a year-on-year basis.
In January 2002, the Trading Director, based on
data captured in the newscorecards, introduced the
?rst formal ‘category review’ of the paper product
range, which was to be key in his e?orts to establish
inter-organizational management control. This
process involved market controls (price compari-
sons for paper product SKUs against similarly sized
supermarket competitors as well as the major mul-
tiples) and, for the ?rst time, the solicitation of alter-
native category plans and planograms from each of
ConCo’s suppliers. The formal review process was
legitimated by the Trading Director as encouraging
ConCo and PulpCo to engage in a systematic
discussion about the developments within the
category and ‘‘a forum to discuss promotional
opportunities.’’ This practice e?ectively replaced
annual brand reviews and represented the most tan-
gible change in organizational routine brought
about by the adoption of category manage-
ment. Over time, category management at Con-
Co became synonymous with regular category
reviews.
An important part of the emerging category
review process was the solicitation of category
plans and insights from PulpCo’s key competitors,
which included a ?uid exchange of accounting
information between ConCo and both its current
and potential suppliers. On 15 February 2002, let-
ters soliciting category plans were sent to PulpCo,
ConCo’s own-label suppliers and two of PulpCo’s
largest competitors:
[We’re] committed to transparency. . . We
downloaded data for the last 52 weeks relating
to pro?t margins, sales and share of category
in the paper products category and delivered
it to PulpCo – as well as our second and third
largest suppliers and our own-label supplier.
We actively encouraged each of them to sug-
gest plans for category management in the
review phase. . . PulpCo is a large [pause]
overtly strong supplier and unless we do this
sort of thing, I bet it will come back again with
[one of its brands] high on the list of category
management initiatives even though the brand
is dead. . .
– Trading Director, ConCo (21 February
2002)
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 645
This sharing of ?nancial information repre-
sented a level of open book accounting that was
far from commonplace in the sector.
12
The Trad-
ing Director did not, however, feel that market
controls and competitive solicitation of this nature
necessarily compromised relations between buyers
and suppliers. This was contradicted by PulpCo’s
account manager.
This is the sort of details all suppliers want,
but we don’t want it given to our direct com-
petitors as well [laughs].
– Account Manager, PulpCo (28 February
2002)
Over time, category managers within ConCo
were converted to the Trading Director’s output
orientation; the ‘competing with the multiples’
and ‘bottom line’ responsibility messages had a
normative symbolism that resonated. Two cate-
gory managers did, however, leave the ?rm in
November 2002, citing the new ?nancial orienta-
tion as the reason for their departure. The category
management infrastructure, ostensibly introduced
in the name of collaboration between ConCo
and its major suppliers, became increasingly driven
by a pro?t-maximization logic. This pursuit of
ever more complete accountability yielded more
information and comparisons; however it also
gave rise to a culture of suspicion and distrust in
its relationship with PulpCo.
Both actors ConCo and PulpCo drew upon
the discourse surrounding category management
in various ways. ConCo sought to improve terms
by mobilizing a narrow accounting rhetoric of
‘‘value-addedness’’ and governing concepts of
e?ciency, cost reduction and growth. ConCo
repeatedly argued that it ‘‘added value’’ through
its marketing practice of delivering pamphlets to
consumers each week. Accounting rhetorics
and calculations were deployed on both sides as
ammunition to support their respective arguments
during price and promotion negotiations. In
short, category management was found to pro-
vide a calculus against which to measure the
acceptability, appropriateness, and legitimacy of
actions and produced a discourse that provided
buyers with new conceptual space for articulating
claims.
Clawbacks and the unravelling of trust
In an e?ort to maximize returns, the Trading
Director undertook numerous actions to ‘claw-
back’ funds. These e?orts e?ectively involved
the Trading Director seeking to re-negotiate an
actual unit price less than that originally agreed.
In the sector, this is frequently referred to as
pursuing ‘‘reverse cash?ows’’ from the supplier.
The main strategy involved applying pressure for
a stepwise reduction in base unit prices over time.
Led by the Trading Director, ConCo representa-
tives also sought retrospective discounts or exten-
sions of temporary price reductions and
continued their e?orts for increased promotional
allowance funds. In short, PulpCo was pressured
to match lower prices of competing retailers, pay
on-costs of special promotions and was confronted
with e?orts to impose retrospective price changes.
Gradually, these clawbacks led to a further deteri-
oration of the relationship between PulpCo and
ConCo.
In February 2002, a pricing dispute relating to
facial tissue led to a further unravelling of trust
between the two organizations. ConCo’s Paper
Products Category Manager e-mailed that Pulp-
Co’s Account Manager claiming that PulpCo
‘‘was generally exceeding a fair and accepted
price.’’ The Trading Director sought to recraft
power relations by initiating a number of tactics
which he characterized as ‘‘chipping away at
the edges.’’ These included a decision to delist
certain products as well as withdrawing from
12
From interview responses across the sectors, it appears that
the data that most manufacturers would be willing to share,
given the requisite level of ‘trust’ in the partnership, includes
consumer research about the market, consumer pro?les, short-
term marketing strategies, and information on the performance
of the brand in the account compared with other retailers.
There was widespread reluctance with respect to sharing
information relating to retail competition and the details of
costs, gross margin and pro?tability. In spite of the rhetoric of
information sharing replete in the category management
literature, overall category sales will not necessarily be provided
and there is generally no expectation of receiving competitor
information.
646 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
certain price promotions in other categories
thought to be strategically signi?cant to PulpCo.
Other tactics aimed at signalling dissatisfaction
were less direct, and included the manipulation
of recommended prices to make private-label
products look more competitive. All price changes
were regularly communicated to PulpCo’s
Account Manager via e-mail. Table 2 summarizes
the actions taken against PulpCo primarily at the
behest of ConCo’s Trade Director that are re?ec-
tive of a tight ?nancial control rather than a trust-
ing posture.
The implementation of category management
was thus characterized by dialectical power rela-
tions. Instability and implied threats were a feature
of the relationship for most of the observation per-
iod, re?ecting the inherent tension between the
norms of partnership and collaboration on one
hand and pro?t and appropriation on the other.
While the initial category management agreement
emphasized the importance of sharing knowledge
and information and working together to create
better decisions, agents from both ?rms ‘‘realisti-
cally’’ ignored this rhetoric, adapting their expec-
tations and interpretations to a recognition that
category management exists within a structure of
power relations and coercive corporate assump-
tions and rules. Ultimately, key interface actors
were driven by a career-oriented concern with
margins and volumes that were subversive of the
rhetoric. This reduced both inter-organizational
trust between actors from both organizations as
well as undermining personal trust between Con-
Co’s Paper Products’ Category Manager and
Trading Director and PulpCo’s Account Manager.
It is worth noting that the extent to which actors
perceived di?erences between actual category man-
agement practice and the ideals of category man-
agement as explicated in the trade press varied
with hierarchical position. ConCo’s CEO and
PulpCo’s UK Finance Director throughout the
observation period down-played claims of tension
between the organizations; while the personal
relationship between the Trading Director and
the Account Manager remained strained and
shrouded in suspicion. This corresponds with prior
research suggesting that inter-organisational trust
levels vary across di?erent hierarchical positions
and individual relationship contexts (see Kramer,
1999). This disconnect resulted in the CEO of Con-
Co and Finance Director of PulpCo talking a talk
that was to be e?ectively undermined by the walk
of ambitious subalterns.
From mid-2002 onwards, communications
between the two organizations became increasingly
hostile and trust between them – a notion that dom-
inated signi?cation structures initially – continued
to unravel. To this end, PulpCo’s European Cate-
gory Management Development Director wrote a
curt e-mail to the Trading Director stating that he
was ‘‘frustrated’’ by the attitude of ConCo, which
was met with a response pointing to the ‘‘disap-
pointing follow-up to our meeting’’.
You hear [ConCo’s CEO] talk and then look
at some of the things they’re trying to do to get
a better deal. They’re not walking the talk.
– Account Manager, PulpCo (4 September
2002)
The end result of the category review process
was a reduction in trading volume of approxi-
mately 8% over 2002, thus bene?ting secondary
suppliers and ConCo’s own-label manufacturer.
These changes in product mix were aimed at
increasing ConCo’s gross margin across the three
category lines. In total, this change in product
Table 2
Demands re?ecting a strict ?nancial control style
• Imposing retrospective changes to short-term contractual terms with suppliers
• Requiring or requesting PulpCo to make a payment for better positioning of their products within stores
• Seeking discounts from PulpCo retrospectively
• Seeking support from PulpCo to match a lower retail price of a product by a competing retailer
• Seeking information from PulpCo on the supply or pricing of its product(s) to other retailers
• Requiring suppliers predominantly to fund the cost of promotions
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 647
mix resulted in a rapid increase in gross margin
from 15.4% in 1999 to 19.5% in 2002. By the end
of 2002, all representatives at ConCo predicted that
PulpCo’s shelf space was set to drop even further.
Capitulation and distrust
Following further formal meetings in March
2003 and ongoing communication in the months
that followed, PulpCo did reduce its prices to vary-
ing degrees and tripled its promotional allowance
commitment from 1% of turnover to 3% during
September 2003. This increase of local investment
in advertising support was viewed by PulpCo’s
Paper Products’ Category Manager as making
‘‘an enormous bottom line di?erence.’’ Re?ecting
on this increase, the Trading Director commented
that ‘‘category management is very good at secur-
ing promotional spend.’’
Over the course of the relationship, the di?er-
ence between trust talk and trusting behaviours
(walk) was stark. Although both parties spoke reg-
ularly of the general importance of trust in buyer–
supplier relations, perceptions within both ConCo
and PulpCo of the other’s benevolence and integ-
rity were frequently cynical. Moreover, representa-
tives from both ?rms referred to the risk of
exploitation inherent in category management,
both alleging that the concept tends to naturally
favour their counterpart. PulpCo suggested that
retailers were prepared to be exploitative within
category management principles and opined that
key features of category management, as presented
in the trade press, were widely seen to be compro-
mised in practice. PulpCo’s account manager
expressed cynicism with regard to the collection
of ‘broad’ sets of performance measures and the
notions of mutuality underlying open book
accounting and joint planning.
The vast majority of my personal experience
suggests that category management means
‘‘buyer in charge’’. We invest heavily in ?lling
out templates for category plans and merchan-
dising but their focus seems to revert to the
bottom line. Most of the time, manufacturers
have little choice but to embrace partnership
initiatives as being bona ?de but
– Account Manager, PulpCo (6 October 2003)
In contrast, ConCo’s Trading Director
described the notion of retailer power as a ‘‘red her-
ring’’ and criticized ‘‘branded myopia’’, referring to
the fact that large brand manufacturers do not
commit the ‘‘appropriate level of management
seniority to category management.’’ He argued
that the retailer received little bene?t relative to
manufacturers, who used the concept to try and
annex aisle space and secure retailer commitment.
I wouldn’t trust PulpCo as far as I could throw
them. Of course, I’d never tell themthat, but our
history with them has been anything but cozy.
They have long tried to push their dead lines
and brand extensions to us in an already over-
segmented market just to get their products lis-
ted. . . um. . . we’re at risk of losing focus on the
category itself. Category management changes
things but at the end of the day there is still a fair
bit of cat and mouse involved. They will natu-
rally favour their own brands and we’ve got to
really watch for that.
– Trading Director, ConCo (8 January 2004)
At the time that observations were concluded,
the future of the trading relationship was uncertain.
Discussion and implications
Under the banner of category management,
supermarket chains in the UK have implemented
a range of measures said to be congruent with col-
laborative relationships: supply chains have been
contracted, supplier numbers rationalized and cat-
egory leadership arrangements employed with ded-
icated, and sometimes exclusive, category captains.
This process was materially assisted by the
demand for a more rigid and predictable frame-
work for arranging inter-organizational relation-
ships; calculative practices embedded within
category management materially assisted its di?u-
sion (engendering system trust in category man-
agement). The calculation-rich process provided
a framework for interpretations and a forum for
demonstrating trustworthiness. In this way, cate-
gory management – especially its hard, calculative
648 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
scorekeeping and comparisons rather than softer
aspirations – presented a common language for a
range of organizational actors and a space in
which claims could be made and tested.
Although trust featured heavily in initial com-
munications between ConCo and PulpCo (re?ect-
ing its prominence in trade press descriptions of
category management), over the course of the rela-
tionship, a certain self-preserving set of accounting
procedures was adapted with the emphasis on price,
market controls and open communication of data
among competing suppliers. By instilling regular
category reviews, the Trading Director was able to
elevate the focus on the ?nancial performance deliv-
ered by each supplier. The ‘category review’ process
came to provide the dominant meaning system for
action and intervention. In so doing, the Trading
Director successfully established a ‘?nancial perfor-
mance’ and ‘value’ discourse as a major theme of
internal communication. The accounting structures
employed by ConCo were operationalized as a form
of surveillance and discipline rather than a learning
and co-ordination device. Measures promised to
imbue ‘‘partnership’’ as promoted by advocates of
category management in the trade press were
noticeably absent in the decision frame adopted at
ConCo. Instead, the vigilant monitoring corroded
and undermined the potential for trusting behav-
iour, and declining trust in turn fuelled action and
adversarialism.
The disparity between category management
theory and how it played out in this relationship
suggests that the stated goals and ascribed trust-
based bene?ts of category management may be
unrealistic in organizations that have their history
and power relations steeped in hierarchical, auto-
cratic and adversarial buyer–supplier relations.
Advocates of category management implicitly
assume that all agents understand and are commit-
ted to the concept, that the theory is ‘‘free’’ from
its own contradictions and that it ‘‘breaks with’’,
rather than occurring within, and possibly rein-
forcing, existing relations of hierarchy and power.
Ardent advocates might argue that in this case, the
implementation, with its focus on coercive reviews
rather than information sharing, has compromised
the concept to an extent that is untenable. How-
ever, given the context, the contradictory content
and normalizing e?ect of category management,
it might be more correct to question whether the
aims of the concept are attainable, especially with
regard to trust and trustworthiness.
With respect to trust, the empirical analysis of
this paper involves three important issues: (1) the
way that trust is understood in the retail sector;
(2) the relationships between trust and modes of
management accounting; and (3) the notion of
trust as a discursive resource.
Conceptions of trust in buyer–supplier relations
Rather than expansive, blanket concepts of trust,
it would appear that trust between organizational
actors is better conceived in terms of ‘‘accommoda-
tive intentions’’, ‘‘reliability’’ and ‘‘commitment’’.
The observations provided by interview respon-
dents in the sector suggest a narrower, more
rational and less romanticized notion of trust than
is often presumed within the management studies
literature. Respondent conceptualization of trust
tended to accord with the ‘‘encapsulated interest’’
account of trust put forward by Hardin (2002): X
trusts Y with regard to matter Z, because X believes
that it is in Y’s interest to behave in a trustworthy
fashion with regard to matter Z; in e?ect, ‘I trust
you because I think it is in your interest to attend
to my interests in the relevant matter’ (Hardin,
2002, p. 4). Trust, under this account, involves con-
sidered expectations about the interests of others to
behave in a trustworthy manner. A retailer, for
example, may wish to preserve its relationship with
a particular supplier and accordingly act in a trust-
worthy manner in its dealings with the supplier. At
the other end of the spectrum, respondents tended
to speak of distrust in terms of procedures (such
as ‘‘bias’’ and ‘‘favouritism’’ in selection of category
captains) as well as outcomes (references were made
to ‘‘pro?teering’’ and ‘‘fudging the numbers’’ to
‘‘unfairly’’ gain advantages in terms of pro?t and
volume).
Idealist accounts of accounting practice playing
a constitutional role in the development of trust
between trading partners need to be tempered by
reference to the instrumental in?uences of self-
interest and opportunism in many sectors, such as
the supermarket sector in the UK. Dissembling as
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 649
well as wheeling and dealing were seen to be com-
mon within the sector; within certain limits, they
are expected and excused. In the sector, trust does
not extend to expansive notions of benevolence, or
trusting inter-organizational partners to never use
the option of exit. It is generally understood that
any mutual commitments are always conditional
upon being able to demonstrate quality, pro?tabil-
ity and competitiveness. Buyers frequently spoke of
negotiations as a ‘‘game’’ to be ‘‘won’’ and there
was widespread cynicism regarding the integrity
of accounting information shared under open book
accounting initiatives. Further, what appears to
indicate trust and trustworthiness may in fact be
largely a consequence of domination, lack of alter-
natives, or simple mutual dependency.
Trust and accounting control: uneasy bedfellows?
The interviews provide evidence suggesting that
certain forms of calculation and highly demanding
forms of accountability can be deployed in a way
that is incompatible with the constitution of
trust-based relations. Strict ?nancial and opera-
tional controls and tight performance targets
placed upon buyers brought great visibility to
costs and related ?nancial outcomes. Benchmark-
ing and trend analyses were performed to routinely
monitor the development of supply costs over time
and to intervene when necessary. The expansive
use of open book accounting to engender competi-
tion (through the provision of sensitive sales data
to a range of potential suppliers) and regular sur-
veillance did little to promote trust between orga-
nizational actors at ConCo and PulpCo.
This resonates with Frances and Garnsey (1996),
who explore the notion of accounting as a system of
accountability in networks. Examining the supplier
networks of supermarket chains, the authors pro-
vide a detailed account of how large retail corpora-
tions use formal accounting techniques and
information technology rather than purely trust-
based relations to control other network partici-
pants, tighten inter-organizational linkages to their
bene?t and increase their in?uence throughout the
network. Central to their analysis is the notion that
accounting (with its high degree of systemtrust) has
been implicated in the acquisition of power and eco-
nomic bene?t by supermarkets because it enables
‘‘an accountability from supplier to supermarket
in the name of the customer’’ (p. 596).
The ?eld study also suggests that the emerging
body of work in accounting dealing with trust
(e.g., Coletti et al., 2005; Tomkins, 2001) may have
under-played the signi?cance of power in the for-
mation and operation of business relationships.
Despite the rhetoric of the trade press and pro-
nouncements made in the public sphere, ConCo’s
punitive action against PulpCo for its failure to
conform to ConCo’s demands is re?ective of the
role of domination structures rather than mutual
trust. Structuration theory provides a useful tool
for exploring the dynamism of trust in?uenced
by communications (‘talk’), exercises of power
and the use of sanctions (‘walk’).
Trust as a discursive resource
Accounting scholars have been keen to point
out that accounting has a role to play in the con-
stitution of trust (e.g., Chenhall & Lang?eld-
Smith, 2003; Seal et al., 1999; Tomkins, 2001).
Certainly, the ?ndings of this study suggest that
regimes of accounting practices can play a crucial
role in constituting system trustworthiness in gov-
ernance structures due to the way calculative
regimes are perceived as objective, rigorous and
neutral. Further, respondents across the sector
also indicated that particular modes of supply
chain accounting – open book costing, joint per-
formance measurement and joint forecasting –
can provide a historical context within which
actors could situate interpretations, increase com-
mitment from both parties to a relationship and
help instill personal trust in actors’ competence
and intentions. Moreover, due to shared norms
relating to the acceptability of various forms of
accounting scrutiny and the extraordinary calcula-
tive and reporting capability of various category
management software systems, the mere act of col-
lecting performance data was not seen to be
broadly antithetical to the formation and mainte-
nance of long-term relationships.
However, it should be noted that accounting
practice may become disconnected frompublic pro-
nouncements about trust and images of trustwor-
650 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
thiness projected by organizations (see Hardy et al.,
1998). Institutional theorists have long noted the
possibility of a disparity between the technical work
performed internally and the image projected to
external parties by means of making appropriate
symbolic displays (Oliver, 1991). There appeared
to be a very loose coupling between public state-
ments about trusting relations and the practice of
buyer–supplier relations in the ConCo and PulpCo
?eld study. In the relationship, it is clear that there
was considerable reference to the words ‘‘trust’’
and ‘‘trustworthiness’’ in both inter-organizational
communications, public statements and interviews.
However, it is di?cult to reconcile this discussion
with the intended action and the prevailing domina-
tion structures in the relationship. Rather than a
trusting atmosphere, an opportunistic tone came
to pervade the relationship, particularly at the level
of the Trading Director at ConCo and the Account
Manager at PulpCo.
13
Open book accounting, a
mode of supply chain accounting argued by advo-
cates to increase inter-organizational commitment
Table 3
Notions of trust mobilized by the major retail players in the UK retail sector
Retailer Exemplar comment Website
Tesco ‘‘We have developed long-term working relationships with our suppliers
and by working together to meet customer needs we have both grown our
market share. For example our existing supply base for beef has been in
place for over 10 years . . . [We] treat people how we like to be
treated. . . [and] trust and respect each other’’
www.tesco.com
Sainsbury ‘‘We are working to improve relationships with our suppliers and our
success is shown in our independently conducted, suppliers’ survey. Our
suppliers generally rate us better than our competitors. In particular we
score well for product quality and in conducting fair negotiations. Most
recently, we have improved the openness of sharing information and
improved communications. This has taken the form of joint consultative
business plans with our key suppliers’’
www.j-sainsbury.co.uk
Safeway ‘‘Our objective is to achieve a mutually pro?table relationship with our
suppliers. We collaborate with them on the development of new ideas in
product development and supply chain operations. . .’’
www.safeway.co.uk
Waitrose ‘‘Each of our buyers is an expert in his or her own ?eld. Their job is to seek
out the best sources of the best quality food and unusual ingredients that
can’t be found in other supermarkets. Much of their time is spent with the
farmers, growers and suppliers, building relationships based on trust and
respect . . .’’
www.waitrose.com
Marks & Spencer ‘‘We and our suppliers have found from experience that when people are
treated with respect, in decent working conditions and fair rates of pay,
then both they and their companies bene?t from increased commitment
and productivity. . . Our relationships with suppliers are conducted within a
published set of standards and every year we commission a survey of how
our suppliers see us. The results of this survey are communicated at a
conference for our largest 150 food suppliers. We also run farmers listening
groups at agricultural shows . . .’’
www.marksandspencer.com
Co-Op ‘‘The Co-operative Group seeks to build partnerships with our suppliers,
developing relationships that are based on trust and are to our mutual
advantage. We also want our suppliers to share our values and, wherever
possible, will encourage them to put these into practice. . .’’
www.co-op.co.uk
13
It is interesting to note that the trajectory of the relationship
may have been di?erent simply with more frequent communi-
cation between more senior managers from both organizations.
Murakami and Rohlen (1992, pp. 70–73) argue that trust is
enhanced by actions that occur over and above the strict
observance of rules and contracts. This possibility underlines
the importance of active management of processes rather than
simply establishing a process and relying on accounting tools
and technology to guide relationships.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 651
and provide a forum for fruitful learning and dia-
logue, was used in the case to induce competitive
bids from rivals. Through incentives and targets
on buyers, the Trading Director in the case actively
sought to enhance the visibility of particular ?nan-
cial performance indicators deemed to be
‘‘unacceptable’’.
Trust as a discursive resource results from a
deliberate manipulation of signi?cation structures
to mask the consolidation rather than dispersion
of power. Both generated trust and trust as a discur-
sive resource involve attempts to create signi?cation
structures that increase stability and foster a sense
of community. Where they crucially di?er is in
terms of reciprocity of trusting behaviour. The ?eld
study contains several attempts to signal trustwor-
thiness (through public pronouncements, ‘‘partner-
ship’’ commitments and inter-organizational
correspondence) motivated by a desire to secure
agreement and reduce the chances of opposition
by creating legitimacy for both actor and actions.
In this sense, the deliberate manipulation of claims
to commitment, legitimacy, sincerity and clarity
represent a sophisticated attempt to secure co-oper-
ation rather than the pursuit of trust generation.
There is mounting evidence from the UK retail
sector to corroborate elements of the ConCo and
PulpCo ?eld study. The notion of trust receives
much attention in declarations of intent in the
retail sector. Although there are di?erences in
emphasis, many supermarkets profess a desire to
pursue the bene?ts of partnership with suppliers
in o?cial channels. Table 3 is representative of
the preponderance of public statements made by
the major multiples.
This recourse to ideas surrounding trust in the
sector is di?cult to reconcile with many commonly
reported practices.
14
In 1999, the UK Competition
Commission launched an inquiry into supermarket
operations following ongoing and widespread alle-
gations of pro?teering from both consumers and
suppliers. However, according to many commen-
tators, the investigation was shrouded in an atmo-
sphere of fear and distrust (see Hingley, 2005).
Most suppliers were unwilling to be named, and
in many cases were also unwilling to identify the
retailer that was the subject of their complaints
Table 4
Practices engaged in by multiples
Practice Never Rarely Sometimes Fairly often Often No answer
Delay payments by 15 days more than terms 44 33 18 2 2 2
Delay other amounts due by more than 15 days 32 34 22 7 4 2
Break other contract terms 39 30 12 4 0 16
Change quality agreed without adequate notice 58 25 11 0 0 7
Change other agreed requirements without adequate notice 35 19 26 7 2 11
Threaten delisting without reasonable cause 21 42 32 2 0 4
Require charitable contributions to be made 32 16 37 9 4 4
Require payments/discounts when main party’s
pro?t from products is less than the main party
expected
26 25 30 11 5 4
Require buyback of unsold goods 47 35 11 4 0 4
Make deductions from returns to cover wastage 54 23 12 2 4 5
Impose slotting charges 44 11 18 5 16 71
Charge for any shelf space 49 19 18 4 7 4
Charge for listing 37 19 25 9 5 5
Source: Adapted from Competition Commission (2000, p. 235).
14
For example, the practice of regular buyer rotation militates
against the type of deep personal interaction traditionally
associated with trust-based accounts. More than two-thirds of
the retailers interviewed stated that to some extent they try to
‘‘maintain a competitive edge’’ by periodically rotating buyers
between categories. Further, though open book accounting is
venerated by many scholars (Cooper & Slagmulder, 2004; Dyer,
1996), interview responses across a range of large supermarkets
and branded manufacturers suggest that it is more often
gestured at than seriously practiced.
652 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
for fear of reprisals. In one speci?c instance, a sup-
plier stated that it would be commercial suicide for
them to give a true and honest account of all
aspects of their relationships with supermarkets.
Notwithstanding, the report of the inquiry (Com-
petition Commission, 2000) revealed a range of
practices that are di?cult to reconcile with the
trust-related posturing in the sector (as well as
called for a code of practice to govern relation-
ships between retailers and suppliers). These prac-
tices are displayed in Table 4.
Conclusion
Recent social and political economic theory has
been very taken with the role of trust in economic
relations, often in reaction against neo-liberal
exaggerations of the su?ciency of self-interest
and contract in producing successful economic
performance (see, for example Fukuyama, 1995;
Misztal, 1996). While mainstream economic
theory’s emphasis on self-interest has led it to
ignore or overlook the role of trust in economic
relationships, trust as an explanatory variable of
inter-organizational interactions can also be over-
estimated, especially where markets and competi-
tive economic behaviour are concerned. If actors
cloak their actions in terms of the partnership
and mutual interest, then there are major di?cul-
ties in attributing motives, making trustworthiness
judgments and distinguishing between trust talk
and walk. To complicate matters further, real-life
situations are likely to involve mixed motives.
Accordingly, measures of trust that rely on Likert
scale responses to a single question about trust-
worthiness (Coletti et al., 2005) or manager tenure
as a proxy (Gibbs et al., 2004) should be inter-
preted with caution.
The evidence and analysis presented here begin
to lay the groundwork for a conceptualization of
trust that has both academic and practical bene-
?ts. The intent to build trust and tighten relations
should not be uncritically con?ated with more
open modes of accounting and social controls. It
is important that researchers distinguish between
generated trust and the use of trust as a discursive
resource to produce a more nuanced understand-
ing of the relationship between accounting prac-
tice and notions of trust and trustworthiness.
While forms of accounting practice and trust need
not be opposing alternatives, considerable care
must be taken with interpreting statements about
trust and the symbolic management of trust-
worthiness.
Several ideas are implied in this paper as an
agenda for further research. In particular, future
research dealing with the role accounting can play
in generating trust and trustworthiness is wel-
come. Linking trust to communication and mean-
ing in naturalistic settings allows researchers to
better distinguish between trust and power-based
co-operation. Both rest on shared meaning how-
ever, in the case of trust, shared meaning is either
pre-existing or is mutually constituted; in power-
based relationships, meaning is either manipu-
lated or imposed by dominant partners. Further
research is also required into the way that open
book accounting operates in practice. The evi-
dence presented here suggests that heavy-handed
forms of accountability and the indiscriminate
demands for open book accounting are unlikely
to create trust and, moreover, provide strong
incentives for manipulated management account-
ing information. More in-depth studies through-
out the world, covering a time horizon of
several years and staying in close contact with
the actual development of relationships, would
permit the validation of the insights gained from
the case studies and provide an even deeper
understanding of not only the interplay between
accounting, trust and relationship development,
but also the nature of category management
arrangements.
Acknowledgments
The author wishes to acknowledge comments
by Chris Chapman, Anthony Hopwood and John
Cullen as well as participants at workshops at
She?eld Hallum University, the Sa? ¨d Business
School, Oxford University and Queen’s School of
Business.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 653
Appendix 1. An overview of articles in the accounting literature deploying the concept of trust
Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Armstrong
(1991)
A critique of agency theory
proposing revisions to its
epistemology, theorization
of social action and
conceptualization of
organization
Theoretical Critical No speci?c de?nition of trust is
provided. Trust is conceived in terms
of relationships that complement and
partially contradict existing agency
incentives and monitoring systems
of control between principals and agents.
The trustworthiness of agents is
di?erentiated from interpersonal trust
Trust is argued to be a means of control
that is socially produced in a costly
manner. Given these costs, incentives
exist for owners to displace trust from
agency relationships by monitoring
agents, arguably impeding the
production of economic surplus on
which the system depends
Neu (1991) Examines the production of
trust in the process of new
stock issues
Field study Interpretive Trust is de?ned as ‘‘social and constitutive
expectations common to all exchange
participants’’ and consists of process-based
(strongest), character-based and institutional-
based (weakest) mechanisms that produce
expectations. Trust is argued to be necessary
for contracting, though contracts are
imperfect substitutes for trust
The case study suggests that the Canadian
institutional environment consists of
multiple loosely-coupled trust-producing
institutions. The institutionalization of
process and character-based information
does not lead to process-based trust and
in fact it can have unintended consequences
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Ross (1994) Examines the role of trust
‘‘as a moderator of the e?ect
of using accounting
information for performance
evaluation on job-related
tension’’
Archival Positivist No speci?c de?nition of trust is provided. Trust
is used as an exogenous variable. It is measured
empirically through a four-item measure
The ?ndings support the notion that trust
moderates the e?ect of accounting-based
performance evaluation styles (budget-
constrained, pro?t-conscious and
non-accounting) on job-related tension
Jonsson and
Macintosh (1997)
Considers the tensions
between ethnographic,
critical and rational
accounting research, and
how ethnographic research
may be advantageous in
certain settings
Theoretical Critical No speci?c de?nition of trust provided. The
authors note that trust is a di?cult concept
for research, since its intuitive meanings get
in the way of discursive understanding
Trust is viewed di?erently in di?erent types
of accounting research. It is suggested that
ethnographic research may hold advantages
in researching trust in relation to accounting
Seal and Vincent-
Jones (1997)
Examines the impact on trust
as contracting relations and
the impact of particular
governance mechanisms
Field study Interpretive No speci?c de?nition of trust provided. The
authors note a lack of consensus on what trust
actually is and discuss risk and vulnerability
as key components of trust. They observe that
though trusting relationships are assumed to be
welfare enhancing, negative aspects also exist
The study makes minimal conclusions
regarding trust, concluding that ‘‘trust and
contract are not antithetical in practice’’
Seal et al. (1999) Examines the constitutional
role accounting plays, through
costing and performance
measurement technologies,
in establishing and managing
trusting and collaborative
business relationships
Field study Interpretive No speci?c de?nition of trust is advanced
The study contrasts Lorenz’s (1988) sceptical
approach to trust and Sako’s (1998) analysis
of trust as contractual trust, competence trust
and goodwill trust. Various uses of trust and
approaches to trust are explored within the
particular case study. The authors conclude
that, both in inter- and intra-organizational
environments, accounting may play a
constitutional role in the establishment
and management of trusting and collaborative
business relationships that goes beyond the
technical to a more symbolic level
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Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Whitley (1999) Examines the variance of
management control systems
across various institutional
contexts, including ?rms,
sectors and societies
Theoretical Positivist No speci?c de?nition of trust provided. The
focus of the study is ‘‘systemic trust’’, that is
trust in an economic system, as a control
mechanism
Trust is used as a cross country exogenous
variable that in?uences the type of
management control system. When trust
is high, formal rules are e?ective,
whereas when trust is low, systems
should be based on personal control and
supervision
Van der Meer-
Kooistra and
Vosselman (2000)
Examines di?erences in
management control
patterns for structuring
inter?rm relationships
Field study Positivist No speci?c de?nition of trust provided.
Trust is argued to be a type of control
mechanism that arises through
learning and adaptation processes because
of repeated transactions between actors in
a network
The authors use a transaction cost economic
framework to identify three factors –
transaction characteristics, transaction
environment characteristics and transacting
party characteristics – that may a?ect control
systems design.
These are then ‘matched’ with three control
patterns – market-based, bureaucracy-
basedand trust-based. Their two ?eld
studies did provide some support for
their transaction cost economics-based
hypotheses, however the high risk alliance
was not found to be managed via a trust-
based pattern of control
Appendix 1 (continued)
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Tomkins (2001) Examines the interaction
between accounting
information and trust in
inter-organizational
relationships, alliances
and networks
Theoretical Positivist Trust is de?ned as ‘‘the adoption of a belief by
one party in a relationship that the other party
will not act against his or her own interests,
where this belief is held without undue doubt
or suspicion and in the absence of detailed
information about the actions of that other
party’’
Tomkins theorizes that trust
intensity is a fundamental factor
in determining the types, amount
and focus of an organization’s
information and accounting
systems. In particular, Tomkins
suggests that a functional, U-shaped
relationship exists between trust and
information needs
Jacobs and
Kemp (2002)
Examines the relationship
between social capital
and accounting
Case study Interpretive No speci?c de?nition of trust
provided. Trust is equated with
social capital or socially accepted
norms
The study suggests that where
social capital is strong enough,
accounting records are not necessary
King (2002) Studies the e?ect of non-
credible communication and
group a?liation on auditors’
self-serving biases through
a game theory experiment
Experimental Positivist No speci?c de?nition of trust is
provided. Trust is incorporated
into an experimental design using
a pu?ery manipulation where
managers make non-binding
promises to signal commitment
and facilitate the formation of
reciprocal trust. Trust is equated
with the lowest audit cost and
probability of detecting fraud
The study ?nds that managers
can increase auditors’ willingness
to trust managers through pu?ery
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Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Chenhall and
Lang?eld-Smith
(2003)
Examines the way in which
synergies or incompatibilities
between trust and control
systems may a?ect
organizational performance
Field study Interpretive Trust is de?ned as ‘‘a psychological
state comprising the intention to
accept vulnerability based on
positive expectations of the
intentions or behaviours of another’’
The study ?nds that gain sharing, a
mechanistic form of control, may be
compatible with organizational trust
(though inconsistent with the
development of personal trust) and that
the adoption of teams promotes personal
trust and the sharing of values and goals
Johansson and
Baldvinsdottir
(2003)
Examines the role of
accounting and accountants
as creating trust or acting as
carriers of trust in the
performance evaluation
process
Field Study Interpretive Trust is de?ned based on the de?nition
provided by Tomkins (2001) (see above).
Trust is created and accumulates
through ongoing processes
The study argues that performance
evaluation and enactment processes
are dependent upon trust between
all parties. It highlights importance
of individuals within organizations
as carriers of trust
Lang?eld-Smith
and Smith (2003)
Drawing upon prior
research, the compatibility
between trust and tight
accounting-based controls
Field Study Interpretive The article reviews a variety of
de?nitions advanced in prior
research, focusing on con?dent
expectations
In a single case study, the
development of trust, and particularly
goodwill trust, was essential to achieve
control in the relationship, at all stages.
Tight accounting controls and social,
trust-based controls are found to be
compatible
Appendix 1 (continued)
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Dekker (2004) Examines the control of
inter-organizational
relationships
Field study Interpretive Trust is de?ned as ‘‘a psychological
state comprising the intention to accept
vulnerability based upon positive
expectations of the intentions or
behaviour of another.’’ Trust is
seen as an informal, social control
mechanism that may take various
forms such as calculus- based trust,
relational trust and institution-based
trust
The study considers the relationship
of formal controls and trust and ?nds
that trust and accounting controls are
not mutually exclusive. The study
concludes that ?rms may use di?erent
con?gurations of governance
mechanisms to attend to appropriation
concerns and co-ordination requirements
Gibbs et al. (2004) Examines the role of
subjectivity in incentive
systems
Archival Positivist The authors use tenure measured as the
number of years that a department
manager has been at the dealership as
a proxy for trust
The study ?nds that trust moderates
the use and acceptance of subjective
incentives
Seal, Berry, and
Cullen (2004)
Uses Gidden’s structuration
theory to analyze how
inter-?rm accounting, an
expert system, is re?exive
in terms of supply chain
actors
Field study Interpretive No speci?c de?nition of trust is
provided
Using structuration theory, trust
is viewed as a faith in expert,
abstract systems, such as accounting.
Trust and risk are seen to drive
social processes of dis- and re-embedding
that characterize late modernity
(continued on next page)
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Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Barrett, Cooper, and
Jamal (2005)
Examines the co-ordination
of global audits through an
examination of co-ordinating
mechanisms, inter-o?ce
instructions and risk-based
audit methodology
Field study Interpretive No speci?c de?nition of trust is provided.
Trust is discussed largely in the context
of specialist experts and expert systems
(drawing on Giddens’ notion of trust
in abstract systems)
The study ?nds that trust is an important
factor in the co-ordination of multi-site
audits and emphasizes the importance
of trust between superiors and
subordinates in audit interview
procedures
Coletti et al. (2005) Examines the e?ect of
control systems on co-
operation and trust in
collaborative settings
Experimental Positivist Trust is de?ned as ‘‘one’s perception
of another’s trustworthiness (which is
in turn de?ned as ‘‘an innate personal
characteristic re?ecting one’s preference
for upholding some social norm of
behaviour, regardless of economic
initiatives’’). Trustworthiness is measured
as the observers’ agreement with that
statement ‘‘The participant is a trustworthy
individual’’ on a 10-point Likert scale
The study ?nds that in collaborative
settings, a strong control system can
enhance the level of trust and
co-operation among collaborators
Appendix 1 (continued)
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doc_556145142.pdf
This paper examines the way in which calculative practices are implicated in the constitution of trust in the UK retail
sector. In the sector, where trust receives much attention in declarations of intent, the notion of category management –
a framework for orchestrating collaborative buyer–supplier relations based on dualistic modes of information exchange
– has become widely adopted
Walking the talk? Supply chain accounting and trust
among UK supermarkets and suppliers
Clinton Free
*
Queen’s School of Business, Goodes Hall, Queen’s University, Kingston, ON, Canada K7L 3N6
Abstract
This paper examines the way in which calculative practices are implicated in the constitution of trust in the UK retail
sector. In the sector, where trust receives much attention in declarations of intent, the notion of category management –
a framework for orchestrating collaborative buyer–supplier relations based on dualistic modes of information exchange
– has become widely adopted. Drawing on Giddens’ conceptualization of trust in abstract systems, it is argued that
regimes of calculative practices embedded in the category management framework played an integral role in constitut-
ing system trust in category management and enabled its rapid di?usion across the sector. However, modes of supply
chain accounting can also be deployed as a mechanism to further particular interests behind a veil of talk about trust.
This paper presents a longitudinal ?eld study where management accounting practices pursued under the banner of cat-
egory management operated to dissemble a variety of self-interested actions and trust was deployed largely as a discur-
sive resource which ultimately resulted in distrust and cynicism. This paper presents a framework for conceptualizing
the relationship between accounting and inter-organizational trust and provides insights into the way that accounting
techniques such as open booking accounting and joint performance management introduced amid ‘trust talk’ can act to
undermine trust in buyer–supplier relations.
Ó 2007 Elsevier Ltd. All rights reserved.
The establishment of many new ties between
?rms and continuous re-organizations within ?rms
in response to increasing competition, environmen-
tal complexity and uncertainty has brought the
notion of co-operative relationships to the fore.
Both within the UK retail sector and across a host
of other economic domains, this relational focus
has been accompanied by a growing interest in
the phenomenon of trust. Trust has not only
become regarded as an important co-ordination
mechanism but is increasingly being viewed as a
precondition for improved performance and com-
petitive success in complex business environments.
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.09.001
*
Tel.: +1 613 533 3255; fax: +1 613 533 6589.
E-mail address: [email protected]
www.elsevier.com/locate/aos
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 629–662
In the face of rapid technological innovation,
intense competition and maturing markets, many
commentators have observed that there has been
a shift in buyer–supplier relationships in the UK
retail sector towards closer, trust-based relations
(Hogarth-Scott & Dapiran, 1997; IGD, 2002),
re?ecting broader trends in supply chain manage-
ment (e.g., Cox, 2001). An important element in
this development has been the di?usion of category
management, a framework for managing product
categories
1
as business units whereby a ‘category
captain’ supplier is e?ectively empowered to guide
decisions relating to product selection, pricing,
pro?tability and product rationalization to satisfy
customer needs. In broad terms, category manage-
ment is supported by more collaborative modes of
organizing and suggests numerous roles for man-
agement accounting based upon the principles of
mutuality and reciprocity, including joint forecast-
ing and planning, open book accounting, joint per-
formance measurement and vendor-managed
inventory (IGD, 2002).
This study attempts to address the lack of
empirical work that recognizes the organization-
ally embedded social context for trust and the
complex relationship between trust and accounting
practice. It also seeks to explore recent contribu-
tions in the supply chain management literature
that suggest that large UK supermarket retailers
are at risk of becoming ‘‘?ef-like’’ (Blois, 1997, p.
381), where suppliers are e?ectively tied into pow-
erful, dominant supermarket partners that can
enforce punitive actions in response to perceived
failings (Hingley, 2005; Kumar, Scheer, & Steenk-
amp, 1998).
2
Speci?cally, this paper is motivated by the fol-
lowing general research question: how are calcula-
tive practices implicated in the constitution of trust
in the UK retail sector? It has two principal ?nd-
ings. The ?rst is that existing de?nitions of trust
need to be more tightly and coherently elaborated
to be applicable in the inter-organizational con-
text. To date, accounting research has been inhib-
ited by a lack of attention to the nature and e?ects
of trust. Empirical research in the area is beset by
con?icting conceptualizations of trust, inadequate
understanding of the relationship between trust,
its antecedents and consequences and the use of
trust scales that are neither theoretically derived
nor rigorously validated. In particular, a more
nuanced understanding of the distinction between
trustworthiness and trust, and the role of power
relations in co-operation between trading partners
represent useful advances for future researchers.
To this end, this paper proposes a set of trust con-
structs that re?ects both institutional phenomena
(system trust) and personal and interpersonal
forms of trust (trust, trusting behaviours, trust-
worthiness and trusting disposition).
The second key ?nding of the paper is that
trust can be invoked in both ritualistic and instru-
mental ways. An examination of the adoption of
category management shows how the di?usion
process rested importantly on the way regimes
of calculative practice e?ectively enhanced percep-
tions of objectivity, rigour and neutrality –
thereby bolstering system trust in category man-
agement. However, this paper also demonstrates
that modes of supply chain accounting practice
can be disconnected from public statements about
trust. Drawing on Giddens’ theory of structur-
ation, a ?eld study of a category management
relationship in the paper products category dem-
onstrates the way in which accounting practices
can be decoupled from public pronouncements
about relational stance. Recognizing the role of
norms and power relations, a discussion of trust
as a discursive resource is presented. While pur-
ported to deliver universal bene?ts, category man-
agement can masquerade or dissemble a variety of
self-interested actions, thereby camou?aging price
pressures, tight ?nancial control and management
expediency in the rhetoric of ‘consumer respon-
1
In this context, categories refer to distinct, manageable
groups of products and services that consumers perceive to be
interrelated and/or substitutable in meeting their needs. A key
element of category management is serving ‘the consumer’
through re-organizing the store around categories of products
that re?ect those in her/his ‘mind-set’.
2
Moreover, there is currently a disjuncture in the literature
on business-to-business exchange between advocates of trust
and collaboration, based on openness, reciprocity and mutual
adjustment on one hand (e.g. Spekman et al., 1999), and
advocates of a power perspective based on adversarial and
competitive exploitation on the other (e.g., Cox, 1999).
630 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
siveness’ and ‘trust-based collaboration.’ In pro-
viding a detailed empirical analysis of some of
the di?culties encountered in realising the ideals
of trust on one hand and pressures to increase
pro?tability on the other, it is suggested that the
simple dichotomy of trust and distrust in the
accounting literature should be expanded to
embrace manipulation and the use of trust as a
discursive resource (see Hardy, Phillips, & Law-
rence, 1998).
The paper is structured in six sections. Since the
notion of trust is poorly understood and has only
recently attracted the attention of academic
accountants, the next section discusses a set of ter-
minological and conceptual issues that require
clari?cation. This is followed by a critical exami-
nation of the emerging body of accounting
research dealing with trust. An overview of the
methodology employed in the study and some
recent developments in the UK retail sector are
then presented. The empirical analysis of this
paper follows, comprising an examination of the
di?usion of category management across the UK
retail sector and a single ?eld study of category
management practice between a large UK retailer
and a multinational supplier. The ?nal two sec-
tions present an analysis synthesizing the ?eld
study and sector-level ?ndings and conclude the
paper by o?ering a set of suggestions for future
research.
Trust and trustworthiness between organizations
Although trust has received extensive attention
in recent years, considerable conceptual confusion
regarding its meaning and role remains (Misztal,
1996). This situation has been described variously
as a ‘‘confusing potpourri’’ (Shapiro, 1987) and ‘‘a
verbal and conceptual morass’’ (Barber, 1983).
Empirical studies on trust development in the
social sciences are frequently situated in the con-
text of intimate personal relationships or experi-
mental economics laboratories, neither of which
can be immediately translated to an organizational
context (Mayer, Davis, & Schoorman, 1995).
Indeed, the globalization of business, network
structures and the proliferation of impersonal
work technology mean that long standing personal
relationships amongst managers are increasingly
uncommon. Whilst this does not mean that trust
should be abandoned as a meaningful concept
for managerial interaction, it raises questions
about the extent to which trust is practiced in
inter-organizational settings. In particular, there
has been little research focusing on trust in asym-
metrical power relationships, in spite of the fact
that such relationships are widespread.
This paper contends that a complex phenome-
non like trust cannot be universally de?ned to suit
any theoretical purpose. Rather, de?nitions should
be elaborated to ?t speci?c research issues and
study aims, whereby di?erent aspects of trust –
such as vulnerability, dependence and commit-
ment – become important. This paper endeavours
to locate the analysis of trust in the context of
inter-organizational relations. It adopts the de?ni-
tion of Mayer et al. (1995), which has been widely
supported by other supply chain scholars (e.g.,
Lane & Bachmann, 1998). In these terms, trust
refers to ‘‘the willingness of a party to be vulnera-
ble to the actions of another party based on the
expectation that the other will perform a particular
action important to the trustor, irrespective of the
ability to monitor or control that other party’’
(Mayer et al., 1995, p. 712). The ‘‘particular action
important to the trustor’’ typically includes ful?ll-
ing obligations, adopting a long-term perspective
as well as not deliberately taking actions that
would result in negative outcomes for the ?rm.
To this end, Anderson, Lodish, and Weitz (1987,
p. 87) de?ne trust in terms of a willingness ‘‘to
accept short-term dislocation’’ because the trustor
‘‘is con?dent that such dislocation will balance out
in the long-run’’ while Fukuyama (1995, p. 26)
de?nes trust as the expectation of ‘‘regular, honest
and co-operative behaviour.’’ Trust is placed hav-
ing taken into consideration the characteristics
(e.g., competence, integrity, benevolence) of the
trustee (Rousseau, Sitkin, Burt, & Camerer,
1998). This narrower, more pragmatic de?nition
can be contrasted to de?nitions of trust advanced
in the context of kinship or intimate personal
relationships (see, for example, Baier, 1994; Gid-
dens, 1984). According to the de?nition, trust is
neither open-ended nor unconditional; agents in
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 631
inter-organizational settings are not expected to
consistently endure harm and routinely neglect
self-interest.
Having arrived at a basic de?nition, it is impor-
tant to delineate some of the primary contextual
issues surrounding the development of trust. Three
important delineations are the distinctions
between: (i) trust and trusting behaviour; (ii) inter-
personal trust, inter-organizational trust and sys-
tem trust (trust in techniques, rules, procedures
and systems) and (iii) trust and trustworthiness.
It is hoped that these distinctions will provide
leverage for accounting researchers for under-
standing how trust operates.
Trust versus trusting behaviour
Mayer et al. (1995) emphasize the di?erence
between trust and trusting behaviours, arguing
that trust is the willingness to be vulnerable (or
accept risk) while trusting behaviour is the assum-
ing of the risk (p. 724). Within an economic frame-
work, trusting behaviour can be described as a
risky advance concession in the expectation of a
positive outcome without any explicit contractual
security or control measure against opportunistic
behaviour.
Interpersonal trust versus inter-organizational trust
versus system trust
It is clear that trust is most often conceived of as
a construct that occurs through interaction
between individuals. At the individual level, Gid-
dens (1984) argues that trust stabilizes the individ-
ual’s sense of ontological security and facilitates
his daily interactions and encounters. In the con-
text of a buyer–supplier dyad, while some ongoing
relationships remain predominantly transactional
with a focus on gains and losses, both the history
and nature of interactions can shape the form
and nature of trust between individual organiza-
tional actors. Repeated cycles of exchange, risk
taking and successful ful?lment of expectations
strengthen the willingness of trusting actors to rely
upon each other. In arguing for an ‘‘embedded-
ness’’ approach, Granovetter (1985) rejects the
characterization of inter-organizational relations
as being composed of autonomous actors ato-
mised from their social moorings. When faced with
the choice, Granovetter argues that individuals
and organizations invariably opt to transact with
those of known reputation or, better yet, with
those with whom they have had past, positive deal-
ings. Accordingly, ‘‘inter-organizational trust’’
refers to two sets of individuals, each of which is
trusting the organization of which the other is a
member (Blois, 1999, p. 210).
Giddens argues that personal trust is increas-
ingly being replaced by trust placed in ‘‘systems
of technical accomplishment or professional exper-
tise that organize large areas of the material and
social environments in which we live today’’ (Gid-
dens, 1990, p. 27). He de?nes an abstract system as
one based on expert knowledge of any type,
depending on rules of procedure transferable from
industry to industry.
3
This trust is often pragmat-
ically based upon the experience that systems are
underpinned by rigorous, objective and unbiased
expertise and ‘‘generally work as they are sup-
posed to’’ (Giddens, 1990). Trust in abstract sys-
tems is likely to be re?exively reinforced through
knowledge or experience of its e?ective or reliable
operation. That is, abstract systems are in constant
revision in the light of new knowledge and skills,
giving individuals the power to in?uence the re-
ordering of the new social relations.
Trust versus trustworthiness
Trust is a relational concept; it is always depen-
dent on trustworthiness. In most of the literature
relating to trust, trustworthiness is mentioned only
rarely or in passing, as if trust were only dependent
on a unilateral act of will by people in the role of
trustors (cf. Armstrong, 1991). However, the rela-
3
This notion connects with Zucker’s concept of institutional-
based trust. Zucker (1986) points out that much of the personal-
based trust of the 1700s and early 1800s in the United States
was displaced in the late 1800s because the populace became
much more heterogeneous through immigration. Hence, it
became necessary for system trust – trust in institutions (e.g.,
banks, courts, regulations, professional associations) – to ?ll in
for the absence of personal trust.
632 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
tional character of trust is one of the features
which distinguishes it from mere con?dence or
expectation. Hence the overwhelming emphasis
on the former rather than the latter is peculiar,
especially as trust relations can be initiated by
the trustee (‘trust me’). One of few researchers to
expressly distinguish between trust and trustwor-
thiness, Hardin (2002, p. 37) points to an impor-
tant di?erence between the two concepts as
follows:
. . . Trust and trustworthiness are not analo-
gous or symmetrical, because one can be dis-
posed to trustworthiness without any risk. A
relationship cannot make you worse o? if
you are merely trustworthy in it. It can, how-
ever, make you substantially worse o? if you
are trusting in it.
According to Giddens, while ‘‘trust necessarily
entails the trustworthiness of the other’’, it ‘‘pre-
sumes a leap to commitment, a quality of ‘faith’
which is irreducible’’ (1991, p. 19). That is, trust-
worthiness provides a mechanism that temporarily
suspends uncertainty, thus making interpretative
knowledge momentarily certain and enabling a
leap to favourable (or unfavourable) expectation.
Metaphorically speaking, ‘‘all trust is in a certain
sense blind trust’’ (Giddens, 1990, p. 33).
4
Dimensions of trustworthiness
Trustworthiness is a characteristic of the trus-
tee, and may stem from several perceptions held
by the trustor about the trustee. According to
the parsimonious model developed by Mayer
et al. (1995), the perceptions of the trustor that
drive trustworthiness relate to the trustee’s ability,
benevolence and integrity. The trustee’s ability
refers to perceptions of the technical, cognitive,
organizational, and communicative competencies
of the trustee. In short, trustworthiness requires
some sense that the trustee is able to perform in
a manner that meets expectations. Integrity refers
to perceptions relating to whether the trustee
espouses, demonstrates and adheres to a set of
principles and values that the trustor ?nds accept-
able. In contrast, benevolence refers to perceptions
one holds regarding the intentions of a partner
towards the relationship, particularly in refraining
from opportunism. Although these dimensions are
likely to be linked to each other, they each contrib-
ute separately to in?uence the level of trust within
a relationship. However, ability and integrity are
likely to be most in?uential early in a relation-
ship, as information on one’s benevolence requires
more time to emerge (Tomkins, 2001). Traditional
trust-building mechanisms include physical pres-
ence, past actions, and legal and regulatory
frameworks.
In the area of system trustworthiness, notions
of competence and integrity are likely to be appli-
cable. To this end, Giddens (1991, pp. 89–90)
acknowledges lay persons’ respect for science and
technical specialism. Of particular relevance here
is the way that calculation is widely seen as desir-
able in social and economic interaction. In his
engaging attempt to account for the prestige and
power of quanti?cation in the modern world, Por-
ter (1995) characterizes calculation as a project to
standardize reasoning and present impersonal
standards of ‘objectivity.’ According to Porter,
quanti?cation is primarily a technology of distance
and a means by which conclusions can be rendered
more ‘objective’ and ‘trustworthy.’
In this paper, accounting practices and their
associated discursive representations are seen as
imparting considerable abstract system trust-
worthiness on ‘new’ ideas, governance structures
and applications. An enduring image of
accounting practices identi?ed by researchers is
that of an objective, faithful and unbiased re?ec-
tion of organizational reality (McSweeney, 1997).
Depicting accounting as an objective, unbiased
means of measuring pre-existing reality enables
speci?c accounting practices to be advocated and
4
To this point, trust has been treated as a situational
construct. It should be noted that trust can also be conceptu-
alized as a cross-sectional, cross-personal construct, encom-
passing individual characteristics of the trustor. Mayer et al.
(1995) refer to ‘‘propensity to trust’’ to describe this notion.
This concept has its roots in personality psychology and
recognizes that individuals develop over time a generalized
expectation about the trustworthiness of others. Dispositional
trust is thus a within-party factor that will a?ect the likelihood
that a particular person will trust other individuals.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 633
introduced in particular settings by proponents of
reform. In this way, accounting, and its associated
discursive representations, can be seen as a means
by which organizations incorporate, or are seen to
incorporate, rational and trustworthy ways of
organizing and monitoring their activities.
Trust, then, is a multi-faceted concept insofar as
it is possible to talk about trust as both a mental
state and a set of behaviours, di?erent objects of
trust and various dimensions of trust. These delin-
eations are drawn upon in the next section, which
reviews the state of the accounting research relat-
ing to trust and also serves to inform the analysis
of the ?eld study.
Trust in the accounting literature
This section provides a review of research relat-
ing to trust in the extant accounting literature with
the intent of highlighting its current status and
shortcomings as well as opening up possibilities
for rendering a more nuanced understanding of
trust as an inter-organizational phenomenon.
Given the rise of research examining trust in other
disciplines, the paucity of studies in the accounting
literature that explicitly consider trust is somewhat
surprising. A review of 11 in?uential accounting
journals
5
during the period 1985–2005 reveals only
19 publications where trust was mobilized as a sig-
ni?cant concept. Appendix 1 presents an overview
of these articles.
While this emerging body of the literature has
signi?cantly enriched the accounting literature, it
remains clouded with confusion. Appendix 1
reveals that this small body of research (compris-
ing only 11 ?eld-based studies, four theoretical
studies, two experiments and two archival studies)
is marked by a lack of clarity in its conceptualiza-
tion of trust as well as great variation in methodo-
logical approach, epistemological foundation and
unit of analysis. In particular, the di?erences
between trust, trustworthiness, talk about trust
and trusting behaviour are not well de?ned.
Nonetheless, a number of common threads
and linkages can be drawn from this emerging
body of the literature. Drawing on an economic
perspective, the relation between information
and trust is frequently said to run in two contrary
directions (Dekker, 2004; Jacobs & Kemp, 2002;
Lang?eld-Smith & Smith, 2003; Tomkins, 2001).
First, trust between partners can reduce costs of
negotiating and monitoring agreements by avoid-
ing the need for complex contingency arrange-
ments. Second, if the costs and rewards of
agreements can be veri?ed at a low cost, then
the need for trust is reduced. The implication is
that management accounting can contribute
directly to the veri?cation problem so that there
can be more reliance on self-enforcing agreements
and less reliance on trust. This position has been
challenged in both theoretical (Tomkins, 2001)
and empirical research (Dekker, 2004; Lang?eld-
Smith & Smith, 2003). One general theme of the
emergent literature is the notion that the relation-
ship between accounting information and trust
changes over time and is not characterized by a
simple monotonic relation. Tomkins (2001) sug-
gests that trust is grounded in learning from expe-
rience, for example, by way of performance
evaluation. His primary thesis is that the learning
process itself is dependent on information that,
up to a certain point, is needed in order to gain
trust. He distinguishes between (1) information
needed to create and support continuing trust
(Information Type 1) and (2) information needed
for mastery of events (Information Type 2) and
argues that both types exhibit, over time, an
inverse U-shape function between trust intensity
and information. This further suggests that a
life-cycle type model of accounting ‘‘information
redundancy’’ could be constructed based upon
the concept of trust.
Trust research in accounting has been largely
focused on two areas: inter-organizational rela-
tionships (?ve studies) and performance evaluation
(four studies). A number of inter-organizational
5
Accounting, Auditing and Accountability Journal,
Accounting, Organizations and Society, Accounting Review,
Contemporary Accounting Research, Journal of Accounting
and Economics, Journal of Accounting Literature, Journal of
Accounting Research, Journal of Finance, Journal of Manage-
ment Accounting Research, Journal of Accounting and Public
Policy, and Management Accounting Research.
634 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
practices have been seen to be consistent with col-
laborative relationships premised on trust and
mutuality. These include open book accounting,
gain sharing, joint performance measurement and
joint cost control (see Chenhall & Lang?eld-Smith,
2003; Dekker, 2004; Seal, Cullen, Dunlop, Berry, &
Ahmed, 1999; Tomkins, 2001). Implicit in these
arguments is the notion that accounting can pro-
vide a forum and common language for learning
and co-ordination. In the area of performance eval-
uation, trust has been seen as both an important
moderating variable (Gibbs, Merchant, Van der
Stede, & Vargus, 2004) and an antecedent to e?ec-
tive performance measurement (Johansson &
Baldvinsdottir, 2003).
While the emergent body of work on trust in the
accounting literature has yielded important
insights, it is not without serious limitation. It is
noteworthy that much of the existing research con-
templates, and concludes with a call for further
research (Geitzmann, 1996; Tomkins, 2001).
Drawing on critiques of the way trust has been
used in other management disciplines (Blois,
1998), four broad weaknesses are apparent in the
research conducted to date.
First, much of the work uses the term trust
when referring to related concepts such as co-
operation, reciprocity or stability. Gibbs et al.
(2004), for example, operationalize trust as the
length of employee tenure. Coletti, Sedatole, and
Towry (2005) conceptualize trust as the perceived
likelihood that another person will co-operate,
absent any economic incentives to do so. Momen-
tary acts of co-operation or stability do not pre-
suppose trust; co-operation may spring from a
variety of causes unrelated to trust such as the
mediation of third parties, situational norms,
coercion and other forms of power exploitation.
Prior research has failed to delineate the di?er-
ences between trust, trustworthiness, trust-based
behaviour and related concepts such as co-opera-
tion and reliance.
Second, much of the work on trust between
organizations is generally characterized by a nor-
mative perspective that classi?es trust as ‘good’
(e.g., Coletti et al., 2005; Gibbs et al., 2004;
Tomkins, 2001), pacifying uncertainty and
creating stability, and mistrust as ‘bad’. The impli-
cation of much work is that the greater the trust,
the greater the performance re?ecting the ‘‘let’s
all pull together’’ sloganeering in much of the pre-
scriptive literature. Exaggerating the importance
of trust produces analyses which are idealist,
attributing to trust outcomes which often have
more to do with material circumstances and
conditions.
Thirdly, in spite of some recent realist (King,
2002) and interpretive ripples (e.g., Neu, 1991), a
functionalist emphasis dominates in the literature
(e.g., Chenhall & Lang?eld-Smith, 2003; Coletti
et al., 2005; Gibbs et al., 2004; Ross, 1994). Such
a perspective tends to focus on surface dynamics
and to ignore the fact that power can be obfus-
cated behind a fac¸ade of trust and collaboration,
and can be used to promote vested interests and
exploit weaker partners (Hardy et al., 1998). Many
of the problems are due in no small part to the nat-
ure of trust, as it represents a phenomenon on the
edge of reason that manifests itself in idiosyncratic
ways (see Bachmann, 2001, on the ‘‘fuzzy logic’’ of
trust). A notable exception to this is the research in
experimental economics on ‘cheap talk’ (Cooper,
DeJong, Forsythe, & Ross, 1989), cited by King
(2002), which suggests that exaggerated claims
about trusting intent can be used in an attempt
to strategically create trust (and then act
opportunistically).
Finally, it has been widely argued that the role
and degree of trust required takes di?erent forms
in di?erent types of relationships (Whitley, 1999).
However, in many of the cited references there is
a tendency to treat trust as a blanket concept
(e.g., Dekker, 2004; Lang?eld-Smith & Smith,
2003; Van der Meer-Kooistra & Vosselman,
2000) rather than one that is highly context-
speci?c.
In summary, an examination of the emerging
body of work in accounting dealing with trust indi-
cates a lack of clarity in its conceptualization.
Drawing on Giddens’ theory of structuration, this
article attempts to provide insights into the way
that accounting is implicated in the constitution
of trust in the UK retail sector. Speci?cally, indus-
try-level ?eld research demonstrates the impor-
tance of trust in abstract systems in the spread of
category management. On an inter-organizational
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 635
level, detailed longitudinal evidence of the rela-
tionship between a leading UK retailer and sup-
plier is presented that is intended to render a
more nuanced ?eld-based conceptualization of
trust and pierce normative, surface-level images
of trust. In spite of pervading trust ‘talk’, relations
are shown to be inherently fragile as new informa-
tion is re?exively absorbed by participants.
Research methodology
In his theory of structuration (Giddens, 1979,
1984, 1990), Giddens sets out to reconcile two
divergent research traditions: the ‘‘objectivist’’
tenets of structuralism, with its emphasis on struc-
ture, and the ‘‘subjectivist’’ phenomenological and
hermeneutic traditions, where the human agent is
the primary focus. In so doing, Giddens rejects
the extreme positions in the agency-structure
debate, positing in the process that human action,
while institutionally constrained, also in?uences
and alters institutional arrangements, or struc-
tures, in the process of ongoing use. This forms
Giddens’ seminal concept of the duality of struc-
ture (see Ahrens and Chapman (2002) for a recent
application in the accounting literature). Accord-
ing to Giddens’ schema, structural properties
(signi?cation, domination and legitimation) are
constantly reproduced from social interaction
(communication, power and sanctions) by means
of the modalities (interpretative schemes, facilities
and norms) drawn on by knowledgeable, re?exive
actors. In this paper, the aim is not to illustrate the
value of this social theory, but to use it as a ‘‘sen-
sitizing device’’ to explore research problems with-
out ‘‘cluttering up’’ data with ‘‘an array of abstract
notions’’ (see Giddens, 1984, pp. 326–327).
Structuration theory eschews a technocentric,
positivist view of accounting structures, arguing
that actors mediate technical templates and may
appropriate structures in an idiosyncratic fashion.
Accordingly, Giddens’ structuration approach is a
process-oriented theory that has a qualitative
method corollary. The ?eld research reported here
was conducted over a period of three years and
six months between December 2000 and May
2004, with follow-up visits and presentations a
year later. Data was collected in two phases. In
the initial phase, 34 interviews were conducted
at 8 major retailers and 11 suppliers across the
UK between January and September 2001. This
phase was concerned with identifying key issues
in the sector and negotiating further access.
Respondents during this stage were quoted
directly (that is, identities were not anonymised)
and the results of this research are presented in
the next section. The second phase of data collec-
tion involved a single in-depth, longitudinal study
of a category management relationship between
ConCo, a large UK independent supermarket
chain, and PulpCo, a multinational paper prod-
ucts supplier. In this second phase of research,
the identities of individuals and the two ?rms in
the ?eld study were altered to preserve anonymity
as the research was conducted on the basis that
the site and participants would not be disclosed
in publication. The data used in the second phase
comprised 31 interviews (structured, semi-struc-
tured and unstructured), non-participant observa-
tion at three buyer–supplier meetings and two
internal meetings, inter-organizational written
and verbal communications, e-mail messages,
internal memoranda, and performance reports as
well as a variety of secondary sources including
company literature and ?nancial reports, the
Competition Commission (2000) report ?ndings,
press releases and articles. In addition, interviews
were conducted with representatives from two
large UK procurement management consulting
companies and two representatives from IGD,
the peak research organization and discussion
forum for the UK retail sector. Since this research
focuses on the role of particular management
accounting techniques brought together under
the banner of category management and not the
accounting function per se, the actors followed
were from a variety of disciplinary backgrounds
including buying, accounting, marketing and
senior management. The contention here is that
a study of this kind has the potential to provide
insights into the relationship between trust and
accounting hitherto unrecognized in the account-
ing literature.
The notions of trust and trustworthiness were
assessed from multiple perspectives. Public sources
636 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
were examined to ?nd references to trust and trust-
worthiness. During ?eld observations, the dimen-
sions of trust and trustworthiness that respondents
attended to during interviews and discussions were
noted and followed up. These responses were trian-
gulated using observations from meetings, letters,
communications and memos.
In an e?ort to minimize the risk of improperly
interpreting atypical events, the data analysis
undertaken adapted the three principal methods
proposed by Eisenhardt (1989): (i) arranging the
interview transcripts and notes into a chronologi-
cal order and identifying common and unique per-
ceptions of events, (ii) dissecting and re-organizing
the original transcripts and notes around key
events, and (iii) comparing emerging ?ndings with
existing research in supply chain accounting to
reveal the extent of congruence with previous
research. The analysis of ?eld data was thus
characterized by ongoing hypothesizing and theo-
rizing, and discarding and re?ning of suitable
theories.
Context: recent developments in the UK
supermarket sector
Napoleon’s oft-quoted characterization of the
UK as ‘‘a nation of shopkeepers’’ is clearly no
longer sustainable. Supermarkets now handle over
80% of the UK grocery market and continue to
encroach on traditional outlets, with second-tier
chains successfully expanding with smaller formats
and also experiencing substantial growth in sales
(which has in turn fed considerable recent merger
and acquisition activity). Although attempts to
characterize market-level bargaining power
dynamics is a fraught exercise, it is clear that the
major retailers possess both signi?cant buying
and selling power. In 2000, only eight suppliers
had sales representing 1% or more of Tesco’s
(the UK’s largest supermarket chain) purchases,
and only 230 suppliers had sales representing more
than 0.1%. Internationally, Wal-Mart Stores’ reve-
nues are six times those of Procter & Gamble
Company (Competition Commission, 2000).
In the United Kingdom retail sector, arguments
based on the ‘power of trust’ have been instrumen-
tal in a growing discourse about the need for
buyer–supplier collaboration. In the face of the
entry of technological innovation, intense competi-
tion, ongoing concerns about the treatment of
‘vulnerable’ domestic suppliers and maturing mar-
kets, many commentators have called for a shift in
manufacturer–retailer interaction in the UK retail
sector towards closer, deeper, more trust-based
relations (Competition Commission, 2000; Curry,
2002; IGD, 1999). A key element of this perceived
shift has been the emergence of category manage-
ment across the sector. The term ‘category man-
agement’ has many de?nitions and is somewhat
ambiguous, denoting an array of buyer–supplier
relationships ranging from computer-aided space
planning to full blown partnerships. The concept
is built on two basic premises: (i) the supply base
is a source of competitive advantage that requires
strategic investment; and (ii) dealing with fewer,
larger and more sophisticated suppliers reduces
risk and transaction costs. Category management
has been presented as a catalyst for the formation
of ‘‘new’’ retailer–supplier relationships and is a
useful focus around which to explore the manage-
ment accounting practices in ‘‘deep’’ retailer–sup-
plier relationships where trust may be expected
to play a role.
Category management comprises a leading sup-
plier playing a proactive role in consumer data
analysis, assortment and allocation of space in
relation to particular categories. Category man-
agement is closely related to the idea of partner-
ship sourcing promoted in the automotive and
electronic industries. Working in tandem, the cat-
egory captain and a category manager from the
retailing chain are expected to integrate processes
and activities and develop a detailed category plan
for the supermarket that sets out which SKUs
(stock-keeping-units) it will carry, their retail
prices, promotional programs, and a ‘‘planogram’’
(a type of architectural drawing of the space each
item will occupy on the store’s ?xtures) showing
the layout, space and format of the o?ering
(IGD, 2002). This is intended to represent a
signi?cant step away from the buyer- and prod-
uct-centred practices of the past (Dapiran &
Hogarth-Scott, 2003).
There is no uniform practice of category
management; instead, each retailer develops its
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 637
own practices and approach (Competition Com-
mission, 2000). What is clear is that category man-
agement embodies a ‘‘fetish of calculation’’
(Bloom?eld, 1991). It suggests a number of roles
for management accounting aimed at enabling
collaborative relations, which include open book
costing, joint performance measurement, joint
forecasting and risk management approaches,
pricing guidance, consumer pro?tability analysis,
cost analysis and formal pro?t sharing arrange-
ments. Category management can be viewed as
having many of the distinctive elements of an
abstract system as de?ned by Giddens. It is clear
that the intention was to create a trustworthy sys-
tem that buyers and suppliers could build on to
make choices and decisions. In many accounts,
category management concepts are accorded a
central role in attempts to stay ‘close to the cus-
tomer’ and enable agents from both ?rms to make
the ‘right’ contribution to the success of the inter-
organizational arrangement. Pledging more ‘fact-
based’ expert knowledge and quantitative data,
category management has become a global model
for management buyer–supplier relations in the
UK retail sector (IGD, 2002).
Calculative practice and system trust: the
legitimation of category management in the UK
retail sector
As a meaningful practice, early category man-
agement work is often said to have started at
Wal-Mart in the United States in the food sector,
which remains the centre of category management
activity (IGD, 2002). As it emerged, category man-
agement comprises a vast set of information
sources and calculative practices. The application
of these practices combined with the structured,
information-rich approach to decision-making
o?ered a means of negotiating complex political
and social problems such as allegations of indis-
criminate pro?teering from suppliers and failure
to serve the customer’s best interests. Resulting
decisions and processes acquired an image of pro-
cedural fairness, objectivity and neutrality, and
thus become di?cult to critique. Both retailer
and supplier interviewees argued that category
management represents a more systematic
approach to decision-making:
6
There is a view in the industry that shelf space
is about . . . who knows who. That it is a closed
shop where the retailer sets the bar [holding
his hand above his head] and says ‘jump’. I
think category management with its more
structured approach to making decisions is a
way of trying to introduce more struc-
ture. . . [and] merit into listing decisions.
We’re now managing out shelf space.
– Group Buying Director and Managing
Director of Kwik Save, Somer?eld (12 March
2001)
The most valuable part of it is the research.
Good category captains listen to the consumer
and what they say, which usually comes out of
the research they do. . . They ask people what
they do with the product or what they might
use instead, so that they can broaden their
scope. For us, market research o?ers an insight
into the way consumers shop the category, how
they make decisions in-store and what new
products are wanted by the public. . . Beer is a
destination category for many retailers . . . one
in ?ve trips to a supermarket in the UK are dri-
ven by the beer purchase. Research also indi-
cates that 70% of purchase decisions are
planned ones. Beer is an important category
for supermarket retailers, but they should also
consider that it is critical to have the brands
and packages the shopper is looking for . . .
– UK Vice-President, Anheuser-Busch (10
April 2001)
The calculative practices underlying category
management served the interests of a variety of dif-
ferent stakeholders. Category management was
framed in a rhetoric that underlined the notion
of making the entire supply chain accountable to
the consumer and made use of externally legiti-
6
Note that the initial round of retailer and supplier interviews
were not anonymised, however access to the indepth case study
?rms, ConCo and PulpCo, was negotiated on the basis of
anonymity.
638 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
mated fashionable words such as ‘‘value-added-
ness’’ and ‘‘customer-focus’’ in order to drive the
process of structuring forward. Many respondents
from supplier organizations suggested that the
development of a corporate category management
strategy was intended to convey the degree to
which their management of the business was
increasingly ‘rigorous’ and attentive to retailer
demands and needs. It is clear that category man-
agement capability is increasingly seen as a source
of di?erentiation among larger suppliers. Sensitiv-
ity analysis and ?nancial planning were put for-
ward by many respondents as a means to
achieving objectivity in analysis, certainty in con-
clusions and trustworthy solutions. In particular,
customer accounting and analysis were seen as
key in establishing objective solutions:
We do research speci?c to shelf-set con?gura-
tion, amount of linear meters, and number of
facings so that we can understand the impact
on various con?gurations throughout the cer-
eal aisle on sales rates, pro?ts and volumes
for retailers . . . and I think this has helped
some of our relationships with the big players.
Hopefully we both listen to each other.
– Category Manager, Kellogg’s (22 February
2001)
Further, learning such techniques amounted to
the acquisition of a managerialist cultural capital
by retail buyers. In a real sense, the di?usion pro-
cess was an attempt to abandon a previous ‘buy-
ing’ worldview and replace it with the language
of managerialism, objective rigour and calculation.
The rigour of category management makes it pos-
sible for buyers and purchasing professionals to
di?erentiate themselves from prior practices and
communicate a new identity.
Reliance on hard facts and analysis is really
what buying at Tesco is all about these days.
The days of just negotiating hard – trading
on margins – are gone. The profession has
moved on from that . . .
– Marketing Director, Tesco (13 June 2001)
As a category manager, I can now pull up
desktop demographics, Spectra information,
market share and margin numbers and market
information from Category Business Planner
[a software package designed by AC Nielsen].
Even three years ago that wasn’t possible. In
the past, we never identi?ed trends and oppor-
tunities until the manufacturer came in. . .
– Chilled Foods Category Manager, Safeway
(9 March 2001)
Buying sta? interviewees made extensive use of
management accounting terminology such as life-
cycle costing, activity-based costing, total quality
management, total cost of ownership, on-time
delivery and ?exible manufacturing. From the late
1990s onwards, the category management process
was quickly incorporated into syllabi o?ering pro-
fessional accreditation such as the Post Graduate
Certi?cate in Food & Grocery Industry Manage-
ment, o?ered by IGD, with speci?c modules drawn
from management accounting topics such as
activity-based costing, models of inventory man-
agement, customer pro?tability analysis and per-
formance measurement.
The concept of category management also
enabled information system specialists to legiti-
mate and mobilize managerial support for organi-
zational change programmes aimed at using
information technology to capture, codify and
communicate quanti?ed ‘‘knowledge’’. The softer,
collaborative side of category management became
de-emphasized in this process while the ‘‘rigour’’
and ‘‘objectivity’’ was foregrounded.
The rigour and calculative infrastructure of cate-
gory management was instrumental in defending
counter allegations against category management.
The notion that a manufacturer would provide
advice about the pricing and promotion of compet-
itive brands has created a stir among regulators and
anti-trust lawyers (especially in the United States),
prompting unintended consequences such as law
suits (see, for example, Conwood v. U.S. Tobacco
290 F.3d768) andclaims that category management
is unfairly anti-competitive to smaller suppliers and
consumers (through rationalization of inter-brand
competition to achieve market stability). In public
channels, quanti?ed analyses, benchmarks and per-
formance measures were mobilized against persist-
ing allegations of big ?rm bias, anti-competitive
practice and impartiality (e.g., IGD, 2002).
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 639
Over the years, suppliers have been pushing
their brands and brand extensions in an already
over-segmented market just to get their prod-
ucts listed. . . um. . . we’re at risk of losing focus
on the category itself. Category management
changes things but at the end of the day there
is still a fair bit of cat and mouse involved. They
will naturally favour their own brands and we’ve
got to really watch for that. But we’ve been
doing this for decades and the numbers in the
system makes bias pretty easy to identify.
– Marketing Director, Tesco (16 July 2001)
Calculative practices thus provided both a strat-
egy for dealing with distrust and an answer to the
demand for impartiality and fairness. Category
management’s accounting-based techniques con-
tributed to system trustworthiness and came
to be seen as a symbol of e?ciency and objectiv-
ity across categories throughout the UK retail
sector.
Field study: the PulpCo and ConCo category
management partnership
The ?eld research presented in this section deals
with conceptualizations of trust in the ?eld, the
relationship between trust and accounting and
the implications of the di?erences between trust
talk and trusting behaviour. It recounts a relation-
ship where management accounting practices pur-
sued under the banner of category management
operated to dissemble a variety of self-interested
actions and talk about trust was deployed largely
as a discursive resource – ultimately destroying
trust and fostering cynicism. In so doing, the
insights provided address shortcomings identi?ed
in the accounting literature and give rise to a more
nuanced understanding of trust and accounting
techniques in practice.
This ?eld study concerns the buyer–supplier
relationship between ConCo,
7
one of the UK’s
largest independent symbol retail chains with over
2100 stores and turnover exceeding £550 million in
2004, and PulpCo, one of the world’s leading
international paper products producer. This rela-
tionship can be traced back almost 20 years, dur-
ing this time, both organizations have experienced
impressive growth. The ?eld study reported here is
focused on the period July 2000, when PulpCo
agreed to act as category captain for ConCo’s
paper product category
8
until early 2004 when
the relationship was seen by representatives from
both organizations as having become unhinged.
The product range provided by PulpCo to ConCo
was relatively constant between 1999 and 2004
comprising (i) three PulpCo Toilet Tissue Brand
SKUs, (ii) two PulpCo Hand (Kitchen) Towel
Brand SKUs and (iii) a single PulpCo Facial
Towel Brand SKU. Toilet tissue constitutes the
largest category, accounting for some 66% of
sales, with the kitchen towel the fastest growing
product line. The ?eld study is presented chrono-
logically, identifying key milestones, starting in
the antecedents to, and public statements sur-
rounding the commencement of the category man-
agement relationship during 1999–2000, the
creation of performance measures and controls,
as well as open book accounting practices, by
PulpCo and growing volume of merchandise trad-
ing between the ?rms during 1999–2001 and the
growing tension and spiralling distrust between
the ?rms between early 2002 until the end of
research period in early 2004 resulting in a decline
in trading volume and fragile relations during
2004.
Growth and re-organization at ConCo
At the beginning of 1999 ConCo was the larg-
est and fastest growing independent supermarket
7
In contrast to the previous industry-wide level interviews,
the identities of organizations and individuals involved in the
?eld study have been anonymised.
8
UK household paper products (a market worth £1.44
billion in 2004) are a category in which promotions play a
signi?cant role in boosting sales and encouraging and main-
taining brand loyalty. Both ‘‘above-the-line’’ advertising and
‘‘below-the-line’’ promotional allowances play a major role in
fuelling market growth. In spite of the notable brand power of
the largest tissue brands, the market for household paper
products is characterized by a high level of retailers’ own-label
sales.
640 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
chain in the UK; as such it was widely heralded
as a success story, running counter to the script
of market domination by the ‘multiples’ (the
major UK supermarkets). ConCo’s strategy was
focused around small format stores (2000–15,000
square feet), ‘High–Low’ pricing
9
and an exten-
sive distribution centre co-ordinated through a
London-based head o?ce team. Although the
company had experienced rapid growth, its
operational structure had remained stable. Its
head o?ce prided itself on its ‘lean’ operation:
outsourcing buying in several categories to a large
Buying Group (for which it was clearly the prin-
cipal client) and managing a small number of sup-
ply relationships deemed to be strategically
signi?cant.
In 1999, after years and rapid growth and
expressions of takeover interest from two of the
UK’s largest supermarket chains, several of Con-
Co’s member retailers began to express discontent
about the e?ciency and service quality of ConCo’s
central o?ce. Largely as a result of these criti-
cisms, in March 1999, senior ?gures within ConCo
resolved to strategically withdraw from the Buying
Group. In order to recon?gure and expand the
scope of ConCo’s buying operations, a new Trad-
ing Director was appointed shortly afterwards.
Having been headhunted from Sainsbury’s Cate-
gory Management Implementation Team, he
o?ered many years of direct buying experience
across a range of categories.
Trust and the initial foray into category
management
Shortly after arriving at the company, the
Trading Director unveiled a plan to implement a
category management structure at ConCo to
‘‘modernize and rejuvenate the organization’s
operations’’, rationalize the supply base and out-
source important in-store merchandising and con-
sumer research roles. In order to facilitate this
process, in mid-1999, the Trading Director
engaged a consulting ?rm (the Partnering Group)
for initial guidance on category management
implementation. Paper products were designated
as one of the four initial product categories to
adopt a category management structure, due to
the Trading Director’s direct buying experience
in the category. Working in concert with a dedi-
cated Paper Products Category Manager, the
Trading Director sought to showcase the paper
products as an exemplar for the rest of the orga-
nization. By December 1999, ConCo had been
restructured around 52 categories. The Trading
Director, who sat below the CEO, controlled 15
category managers (formerly ‘‘buyers’’). Each cat-
egory manager had responsibility for several
product categories and, according to the Trading
Director, was responsible for ‘‘working with ven-
dors, selecting merchandise, negotiating prices
and co-ordinating promotions’’.
PulpCo, who had publicly embraced category
management in 1998 largely as a result of the rise
of the concept among major UK retailers, were
an obvious and uncontested choice as the
category’s initial preferred supplier and category
captain. In 1999, PulpCo supplied ConCo with
over £18 million worth of goods across all paper
products lines. This made it clearly the largest
supplier within ConCo’s paper products category,
with sales volumes approximately twice as large
as ConCo’s own-label o?ering (together these
accounted for over 90% of sales in paper prod-
ucts in 2000). PulpCo had a dedicated Account
Manager who interfaced with ConCo. The
Account Manager was responsible for all interac-
tion and communication with ConCo, conveying
market insights developed by PulpCo’s Category
Business Unit and co-ordinating internal
marketing.
The consecration of the category management
relationship was a whole-day workshop at
ConCo’s headquarters, where two representatives
from PulpCo were invited to discuss future direc-
tions in the category and submit proposals for
store assortment, presentation, promotions and
pricing. A host of analyses – customer pro?les,
trends and preferences – were also presented. In
9
‘High–Low’ pricing refers to the practice of charging low,
competitive prices in certain designation categories (such as
milk and bread) while seeking higher margins in other
categories with frequent price promotions.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 641
theory, category management was adopted to deli-
ver ‘‘service excellence’’.
10
This was clearly mani-
fest in rhetoric relating to ‘‘joint value creation’’
and ‘‘partnering’’ contained in the initial corre-
spondence between both parties generated out of
the workshop. In these o?cial communication
channels, dominant csigni?cation structures relat-
ing to ‘‘customer orientation’’, ‘‘trust’’, and
‘‘value’’ were mobilized by both organizations.
For ConCo, norms of ‘‘trust’’ and ‘‘sharing’’ were
consistently presented as integral to the category
management process.
We wanted to move away from trading on pen-
nies . . . and. . . well develop deeper relation-
ships. We wanted to work with suppliers who
understand their key category drivers for their
products and consumers . . . category captains
we could trust – who could trust us. We
wanted to share our information, which is
quite detailed and granulated. . . and optimize
that with the category captain. Our initial
impression of their planograms was positive.
We were impressed.
– CEO, ConCo (11 January 2001)
Similarly, agents throughout PulpCo’s hierar-
chy also invoked cardinal notions of customer ori-
entation and trust.
Trust is important to our category captain
relationship. Once we’ve been appointed, we
tend to give [pause]. . . commit to the retailer
in a meaningful way. We have made smaller
formats a priority in light of their recent
growth. What I mean by that is that we will
work with ConCo to make sure that they have
exactly the right products for the market.
– Manager – European Category Develop-
ment, PulpCo (1 March 2001)
These opinions corresponded closely to state-
ments about trustworthiness in o?cial channels.
The following are typical of public pronounce-
ments made by both organizations.
ConCo. . . is keen to work collaboratively with
suppliers looking to drive sales through the
convenience sector.
– ConCo statement at an IGD convention (22
January 2001)
At PulpCo we really want to work with our
retailers to build categories together. Trust is
an important part of our business
– PulpCo website (2 December 2000)
A formal memorandum of understanding was
jointly executed on 2 August 2000 that sought
to consolidate the understandings developed in
the workshop. A short-term contract was signed
the following week imposing the following
obligations:
(i) 30 day notice of contract termination with
the sole exceptions being contamination/
public health matters.
(ii) Supermarket notifying supplier one week
forward of total SKU order requirement of
which 70% is guaranteed for payment by
the supermarket if over 70% of that order
requirement has been made available by the
supplier to the supermarket at the relevant
time. Sole exception should apply to promo-
tional supplies.
(iii) Payment for SKU’s supplied and accepted,
or an amount equivalent to guaranteed order
requirement, to be made to the supplier
within 30 days without deduction.
It should be noted that both parties acknowl-
edged that contracts were rarely enforced in the
sector except in exceptional circumstances.
11
Emphasizing ?nancial outcomes within the new
category management framework
The new category management system adopted
at ConCo was cast as a fresh, proactive means of
10
The title of the initial session of the workshop was ‘‘service
excellence’’.
11
Comprehensive, formal contracts between UK supermar-
kets and branded manufacturers are rare. As Doel (1999) points
out, the power di?erentials across the retailer–supplier interface
e?ectively obviate the utility of contracts – retailers’ power
render supplier compliant in the majority of cases.
642 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
managing inter-organizational relationships that
represented a substantial departure from previous
approaches. The Trading Director characterized
pre-existing supply chain management arrange-
ments as ‘‘failing to move with the market’’ and
‘‘too reliant’’ on the Buying Group ConCo had
used for sourcing ‘‘for way too long.’’ From the
outset, he was eager to install processes and foster
outcomes which were ‘‘aligned with the new Con-
Co culture.’’ In pursuing this agenda, the Trading
Director developed and applied a set of protocols
and procedures to all 52 of ConCo’s categories.
The initial phase of the process was an organiza-
tion-wide, ?nancial outcome-oriented benchmark-
ing exercise. For each category, the Trading
Director requested that category managers com-
pile a scorecard comprises the measures featured
in Table 1.
These ?nancial measures were regularly
updated and discussed at weekly ConCo category
management meetings.
Working in concert with ConCo’s CEO, the
Trading Director also designed a rigorous score-
card of supplier ‘operational performance’ which
was compiled for every major supplier (325 in
total). This process was aimed at creating greater
control over processes and partners. Separate
metrics were developed for every lead supplier
(category captain) within each category. In
contrast to the ?nancial measures tracked by Con-
Co, the maintenance of the operational scorecard
was primarily the responsibility of suppliers. The
Table 1
ConCo’s category management performance dashboard
1. Total market size 4. Number of lines versus sales revenue
2. Gross margin 5. Percentage of total pro?ts
3. Gross margin return on investment 6. Promotional allowance/spend
4. ConCo share of total trade 7. Percentage of sales revenue
ELEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SCORE TARGET
1 SERVICE LEVEL 92.0% 92.5% 93.0% 93.5% 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5%
1 2 3 4 5 6
2 LEAD TIME 6 DAYS 5 DAYS 4 DAYS 3 DAYS 2 DAYS 1 DAY
3 ADVICE ON
AVAILABILITY
NEVER ADVISES OCCASIONALLY
ADVISES
RING/FAX NEXT DAY RING BACK SAME
DAY
FAX/E-MAIL BACK
SAME DAY
E-MAIL BACK THE
SAME DAY BUT ALSO
WITH AVAILABILITY
4 GOODS IN BOOKING ALWAYS CHASED TO
BOOK IN
BOOK IN ON DAY BOOK IN ON DAY BOOK IN NEXT DAY
P.M.
BOOK IN NEXT DAY
A.M.
BOOK IN SAME DAY
ORDER PLACED
5 TIMING OF THE
DELIVERY
ALWAYS LATE LATE 5+ TIMES A
MONTH
LATE 4-3 TIMES A
MONTH
LATE TWICE A
MONTH
ONLY LATE ONCE A
MONTH
ALWAYS ON TIME
6 WHEN DELIVERED
RIGHT GOODS
QUANTITY
ALWAYS ISSUES ON
BOTH
ALWAYS ISSUES
WITH ONE
SOMETIMES ISSUES
ON BOTH
SOMETIMES ISSUES
ON ONE
RARELY ANY ISSUES NEVER ANY ISSUES
7 PRESENTATION GOOD
FROM A H&S ASPECT
ALWAYS ISSUES ON
BOTH
ALWAYS ISSUES
WITH ONE
SOMETIMES ISSUES
ON BOTH
SOMETIMES ISSUES
ON ONE
RARELY ANY ISSUES NEVER ANY ISSUES
8 MAKING COLLECTIONS ALWAYS HAS TO BE
CHASED
CONSISTENTLY
31-50 WORKING
DAYS
21-30 WORKING
DAYS
11-20 WORKNG DAYS 10-6 WORKING DAYS ALWAYS COLLECTS
WITHIN 5 W/DAYS
9 OUT OF HOURS
DELIVERIES
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
SUPPORTS BUT NOT
AVAILABLE
NATIONALLY
AVAILABLE AT ALL
SITES
10 BACKHAUL INITIATIVES NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
SUPPORTS BUT
DOESN’T SHARE
COST INFORMATION
FULLY SUPPORT AND
SHARES CURRENT
COST
11 CO-MANAGED
INVENTORY
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
OPERATES AN
ALTERNATIVE
SYSTEM
MEMBER OF CONCO
CMI PROJECT
12 ONE POINT OF
DELIVERY FOR ALL
SITES
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
13 ELECTRONIC
COMMERCE
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
14 FORECASTING NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
15 PROMOTION
MANAGEMENT
NEVER CONSIDERED HAVE CONSIDERED PLAN TO IMPLEMENT CURRENTLY
TRIALLING
HAS IMPLEMENTED
TO SOME DEGREE
HAS FULLY
DEVELOPED AND
IMPLEMENTED
16 TOTAL
Fig. 1. ConCo’s operational benchmark scorecard.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 643
structure of the operational scorecard is displayed
in Fig. 1.
Operational metrics and ?nancial measures
were thus established for every supplier and com-
municated to category managers through reports
generated by the CatMan
TM
software on a weekly
basis.
In internal meetings dealing with the implemen-
tation of category management, the Trading
Director heavily emphasized ?nancial measures
and the primacy placed on these measures clearly
overshadowed discussions relating to operational
performance or product-related trends and devel-
opments. The assemblage of plans, strategies and
tactics proposed by a consultant partner were per-
ceived by the Trading Director and Category
Manager as placing too much emphasis on
‘‘detailed process, complexity and jargon’’ and
insu?cient to the ‘‘bottom line.’’
Their templates and process diagrams are a bit
too jargon ridden. . . [with] too much emphasis
on rigid processes and far too little on answer-
ing the real question: ‘‘how does this help us
make money?’’ We didn’t see any real change.
– Account Manager, Paper Products, ConCo
(16 May 2001)
The Trading Director’s deliberate emphasis
on ?nancial outcomes became a focus for action
for actors within ConCo. Actors across Con-
Co acknowledged the role played by the
Trading Director in driving discussions and legiti-
mating activity surrounding the benchmarking
exercise.
[The Trading Director came] in with the
hard-nosed mindset of someone. . . you
know. . . coming from the multiples who had
been working in reverse auctions and bashing
heads . . . To be honest it can get a bit wearing
now and then. The convenience sector used to
be very hand-in-glove with suppliers. But
because the Tesco’s and Sainsbury’s are mov-
ing into smaller formats we’re forced to beat
up our suppliers more to compete on pricing
issues and things like that.
– Account Manager, Canned Goods, ConCo
(24 January 2001)
Drawing heavily on data assembled in the
benchmarking exercises, ConCo’s Trading Direc-
tor and Paper Products Category Manager argued
that PulpCo was failing to recognize the ‘‘value’’
that ConCo delivered. The two metrics that the
Trading Director focused attention around were
gross margin and promotional allowance (an
allowance provided by vendors to compensate
retailers for money spent in advertising or for pre-
ferred display); these ‘‘critical numbers’’ were
repeatedly underlined in discussions around the
benchmarking process.
At Sainsbury’s, we would never canvas sup-
plier support. Here at ConCo it is a big part
of what we do. For us a new product line is
an opportunity to lever money out of a supplier
rather than a imperative for securing better
service and staying ahead of the market. In
2000, PulpCo had 70–75% of the ConCo busi-
ness [in the category] and was o?ering about
1% of that in support. They were our category
captain and this ?gure lagged below the rest of
the suppliers . . . both within paper and across
other categories we expect something in the
order of 2–3%. . . So we quickly realized that
we needed to get the right range and promo-
tions to satisfy our customers and grow mar-
gins . . . We’re a lean organization and small
di?erences [in margin] are huge.
– Trading Director, ConCo (16 May 2001)
After two meetings discussing the issue failed to
assuage their concerns, in July 2001 ConCo’s
Trading Director and Paper Products Category
Manager called for a special meeting with Pulp-
Co’s Account Manager and European Category
Management Development Director seeking to
underscore ConCo’s promotional capabilities and
potential. Throughout a lengthy PowerPoint-
based presentation, the Trading Director empha-
sized the marketing and promotional capability
of the ConCo sales force, telemarketing team,
ConCo shows, ConCo News and ConCo
promotional brochures. This was aimed at pro-
moting ConCo’s image within PulpCo, with a
view to negotiating an improved promotional
allowance.
644 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
Essentially when we’d ?nished we had pro-
vided them with a fairly comprehensive and
systematic analysis and there really wasn’t
that much left to be said. They acknowledged
that we had made sense, but they still took a
bullish approach. They said that [one of Con-
Co’s major competitors] had recently come to
them with a similar sort of thing, but at the
end of the day, I just got the feeling it was like
if we didn’t like it, go elsewhere.
– Trading Director, ConCo (13 July 2001)
Not only was the meeting seen to have yielded
little by way of improvement, ConCo’s concen-
trated e?orts towards securing trade promotions
were viewed by actors within PulpCo as antitheti-
cal to deep, trust-based relations and the ‘‘spirit of
category management.’’
To a large extent, right from the start we’ve
felt they talked the partnership talk but all
the time they’re trying to reach further into
our pockets for promotions . . . They make
demands like they’re one of the Big-4 [laugh]
. . . Most independents will tell you that they’re
the next big thing – and that they should be
treated accordingly.
– Account Manager, PulpCo (19 July 2001)
Vigilance of actors from both ConCo and Pulp-
Co thus continuously alerted them to cues of
untrustworthiness and opportunistic behaviour;
and enabled them to ?ne tune their expectations
of each others’ behaviour.
Continuous performance targets and category
reviews
The Trading Director also worked hard to
introduce clear and unambiguous lines of author-
ity and responsibility for ‘bottom line’ pro?t and
attaining budgeted sales, targeted promotional
allowance, gross margin and market share targets.
The personality and ambition of the Trading
Director was a key driver in tightening expecta-
tions on buyers; he immediately set of a series of
‘‘continuous performance targets’’, requiring con-
tinual improvements in all key performance met-
rics on a year-on-year basis.
In January 2002, the Trading Director, based on
data captured in the newscorecards, introduced the
?rst formal ‘category review’ of the paper product
range, which was to be key in his e?orts to establish
inter-organizational management control. This
process involved market controls (price compari-
sons for paper product SKUs against similarly sized
supermarket competitors as well as the major mul-
tiples) and, for the ?rst time, the solicitation of alter-
native category plans and planograms from each of
ConCo’s suppliers. The formal review process was
legitimated by the Trading Director as encouraging
ConCo and PulpCo to engage in a systematic
discussion about the developments within the
category and ‘‘a forum to discuss promotional
opportunities.’’ This practice e?ectively replaced
annual brand reviews and represented the most tan-
gible change in organizational routine brought
about by the adoption of category manage-
ment. Over time, category management at Con-
Co became synonymous with regular category
reviews.
An important part of the emerging category
review process was the solicitation of category
plans and insights from PulpCo’s key competitors,
which included a ?uid exchange of accounting
information between ConCo and both its current
and potential suppliers. On 15 February 2002, let-
ters soliciting category plans were sent to PulpCo,
ConCo’s own-label suppliers and two of PulpCo’s
largest competitors:
[We’re] committed to transparency. . . We
downloaded data for the last 52 weeks relating
to pro?t margins, sales and share of category
in the paper products category and delivered
it to PulpCo – as well as our second and third
largest suppliers and our own-label supplier.
We actively encouraged each of them to sug-
gest plans for category management in the
review phase. . . PulpCo is a large [pause]
overtly strong supplier and unless we do this
sort of thing, I bet it will come back again with
[one of its brands] high on the list of category
management initiatives even though the brand
is dead. . .
– Trading Director, ConCo (21 February
2002)
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 645
This sharing of ?nancial information repre-
sented a level of open book accounting that was
far from commonplace in the sector.
12
The Trad-
ing Director did not, however, feel that market
controls and competitive solicitation of this nature
necessarily compromised relations between buyers
and suppliers. This was contradicted by PulpCo’s
account manager.
This is the sort of details all suppliers want,
but we don’t want it given to our direct com-
petitors as well [laughs].
– Account Manager, PulpCo (28 February
2002)
Over time, category managers within ConCo
were converted to the Trading Director’s output
orientation; the ‘competing with the multiples’
and ‘bottom line’ responsibility messages had a
normative symbolism that resonated. Two cate-
gory managers did, however, leave the ?rm in
November 2002, citing the new ?nancial orienta-
tion as the reason for their departure. The category
management infrastructure, ostensibly introduced
in the name of collaboration between ConCo
and its major suppliers, became increasingly driven
by a pro?t-maximization logic. This pursuit of
ever more complete accountability yielded more
information and comparisons; however it also
gave rise to a culture of suspicion and distrust in
its relationship with PulpCo.
Both actors ConCo and PulpCo drew upon
the discourse surrounding category management
in various ways. ConCo sought to improve terms
by mobilizing a narrow accounting rhetoric of
‘‘value-addedness’’ and governing concepts of
e?ciency, cost reduction and growth. ConCo
repeatedly argued that it ‘‘added value’’ through
its marketing practice of delivering pamphlets to
consumers each week. Accounting rhetorics
and calculations were deployed on both sides as
ammunition to support their respective arguments
during price and promotion negotiations. In
short, category management was found to pro-
vide a calculus against which to measure the
acceptability, appropriateness, and legitimacy of
actions and produced a discourse that provided
buyers with new conceptual space for articulating
claims.
Clawbacks and the unravelling of trust
In an e?ort to maximize returns, the Trading
Director undertook numerous actions to ‘claw-
back’ funds. These e?orts e?ectively involved
the Trading Director seeking to re-negotiate an
actual unit price less than that originally agreed.
In the sector, this is frequently referred to as
pursuing ‘‘reverse cash?ows’’ from the supplier.
The main strategy involved applying pressure for
a stepwise reduction in base unit prices over time.
Led by the Trading Director, ConCo representa-
tives also sought retrospective discounts or exten-
sions of temporary price reductions and
continued their e?orts for increased promotional
allowance funds. In short, PulpCo was pressured
to match lower prices of competing retailers, pay
on-costs of special promotions and was confronted
with e?orts to impose retrospective price changes.
Gradually, these clawbacks led to a further deteri-
oration of the relationship between PulpCo and
ConCo.
In February 2002, a pricing dispute relating to
facial tissue led to a further unravelling of trust
between the two organizations. ConCo’s Paper
Products Category Manager e-mailed that Pulp-
Co’s Account Manager claiming that PulpCo
‘‘was generally exceeding a fair and accepted
price.’’ The Trading Director sought to recraft
power relations by initiating a number of tactics
which he characterized as ‘‘chipping away at
the edges.’’ These included a decision to delist
certain products as well as withdrawing from
12
From interview responses across the sectors, it appears that
the data that most manufacturers would be willing to share,
given the requisite level of ‘trust’ in the partnership, includes
consumer research about the market, consumer pro?les, short-
term marketing strategies, and information on the performance
of the brand in the account compared with other retailers.
There was widespread reluctance with respect to sharing
information relating to retail competition and the details of
costs, gross margin and pro?tability. In spite of the rhetoric of
information sharing replete in the category management
literature, overall category sales will not necessarily be provided
and there is generally no expectation of receiving competitor
information.
646 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
certain price promotions in other categories
thought to be strategically signi?cant to PulpCo.
Other tactics aimed at signalling dissatisfaction
were less direct, and included the manipulation
of recommended prices to make private-label
products look more competitive. All price changes
were regularly communicated to PulpCo’s
Account Manager via e-mail. Table 2 summarizes
the actions taken against PulpCo primarily at the
behest of ConCo’s Trade Director that are re?ec-
tive of a tight ?nancial control rather than a trust-
ing posture.
The implementation of category management
was thus characterized by dialectical power rela-
tions. Instability and implied threats were a feature
of the relationship for most of the observation per-
iod, re?ecting the inherent tension between the
norms of partnership and collaboration on one
hand and pro?t and appropriation on the other.
While the initial category management agreement
emphasized the importance of sharing knowledge
and information and working together to create
better decisions, agents from both ?rms ‘‘realisti-
cally’’ ignored this rhetoric, adapting their expec-
tations and interpretations to a recognition that
category management exists within a structure of
power relations and coercive corporate assump-
tions and rules. Ultimately, key interface actors
were driven by a career-oriented concern with
margins and volumes that were subversive of the
rhetoric. This reduced both inter-organizational
trust between actors from both organizations as
well as undermining personal trust between Con-
Co’s Paper Products’ Category Manager and
Trading Director and PulpCo’s Account Manager.
It is worth noting that the extent to which actors
perceived di?erences between actual category man-
agement practice and the ideals of category man-
agement as explicated in the trade press varied
with hierarchical position. ConCo’s CEO and
PulpCo’s UK Finance Director throughout the
observation period down-played claims of tension
between the organizations; while the personal
relationship between the Trading Director and
the Account Manager remained strained and
shrouded in suspicion. This corresponds with prior
research suggesting that inter-organisational trust
levels vary across di?erent hierarchical positions
and individual relationship contexts (see Kramer,
1999). This disconnect resulted in the CEO of Con-
Co and Finance Director of PulpCo talking a talk
that was to be e?ectively undermined by the walk
of ambitious subalterns.
From mid-2002 onwards, communications
between the two organizations became increasingly
hostile and trust between them – a notion that dom-
inated signi?cation structures initially – continued
to unravel. To this end, PulpCo’s European Cate-
gory Management Development Director wrote a
curt e-mail to the Trading Director stating that he
was ‘‘frustrated’’ by the attitude of ConCo, which
was met with a response pointing to the ‘‘disap-
pointing follow-up to our meeting’’.
You hear [ConCo’s CEO] talk and then look
at some of the things they’re trying to do to get
a better deal. They’re not walking the talk.
– Account Manager, PulpCo (4 September
2002)
The end result of the category review process
was a reduction in trading volume of approxi-
mately 8% over 2002, thus bene?ting secondary
suppliers and ConCo’s own-label manufacturer.
These changes in product mix were aimed at
increasing ConCo’s gross margin across the three
category lines. In total, this change in product
Table 2
Demands re?ecting a strict ?nancial control style
• Imposing retrospective changes to short-term contractual terms with suppliers
• Requiring or requesting PulpCo to make a payment for better positioning of their products within stores
• Seeking discounts from PulpCo retrospectively
• Seeking support from PulpCo to match a lower retail price of a product by a competing retailer
• Seeking information from PulpCo on the supply or pricing of its product(s) to other retailers
• Requiring suppliers predominantly to fund the cost of promotions
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 647
mix resulted in a rapid increase in gross margin
from 15.4% in 1999 to 19.5% in 2002. By the end
of 2002, all representatives at ConCo predicted that
PulpCo’s shelf space was set to drop even further.
Capitulation and distrust
Following further formal meetings in March
2003 and ongoing communication in the months
that followed, PulpCo did reduce its prices to vary-
ing degrees and tripled its promotional allowance
commitment from 1% of turnover to 3% during
September 2003. This increase of local investment
in advertising support was viewed by PulpCo’s
Paper Products’ Category Manager as making
‘‘an enormous bottom line di?erence.’’ Re?ecting
on this increase, the Trading Director commented
that ‘‘category management is very good at secur-
ing promotional spend.’’
Over the course of the relationship, the di?er-
ence between trust talk and trusting behaviours
(walk) was stark. Although both parties spoke reg-
ularly of the general importance of trust in buyer–
supplier relations, perceptions within both ConCo
and PulpCo of the other’s benevolence and integ-
rity were frequently cynical. Moreover, representa-
tives from both ?rms referred to the risk of
exploitation inherent in category management,
both alleging that the concept tends to naturally
favour their counterpart. PulpCo suggested that
retailers were prepared to be exploitative within
category management principles and opined that
key features of category management, as presented
in the trade press, were widely seen to be compro-
mised in practice. PulpCo’s account manager
expressed cynicism with regard to the collection
of ‘broad’ sets of performance measures and the
notions of mutuality underlying open book
accounting and joint planning.
The vast majority of my personal experience
suggests that category management means
‘‘buyer in charge’’. We invest heavily in ?lling
out templates for category plans and merchan-
dising but their focus seems to revert to the
bottom line. Most of the time, manufacturers
have little choice but to embrace partnership
initiatives as being bona ?de but
– Account Manager, PulpCo (6 October 2003)
In contrast, ConCo’s Trading Director
described the notion of retailer power as a ‘‘red her-
ring’’ and criticized ‘‘branded myopia’’, referring to
the fact that large brand manufacturers do not
commit the ‘‘appropriate level of management
seniority to category management.’’ He argued
that the retailer received little bene?t relative to
manufacturers, who used the concept to try and
annex aisle space and secure retailer commitment.
I wouldn’t trust PulpCo as far as I could throw
them. Of course, I’d never tell themthat, but our
history with them has been anything but cozy.
They have long tried to push their dead lines
and brand extensions to us in an already over-
segmented market just to get their products lis-
ted. . . um. . . we’re at risk of losing focus on the
category itself. Category management changes
things but at the end of the day there is still a fair
bit of cat and mouse involved. They will natu-
rally favour their own brands and we’ve got to
really watch for that.
– Trading Director, ConCo (8 January 2004)
At the time that observations were concluded,
the future of the trading relationship was uncertain.
Discussion and implications
Under the banner of category management,
supermarket chains in the UK have implemented
a range of measures said to be congruent with col-
laborative relationships: supply chains have been
contracted, supplier numbers rationalized and cat-
egory leadership arrangements employed with ded-
icated, and sometimes exclusive, category captains.
This process was materially assisted by the
demand for a more rigid and predictable frame-
work for arranging inter-organizational relation-
ships; calculative practices embedded within
category management materially assisted its di?u-
sion (engendering system trust in category man-
agement). The calculation-rich process provided
a framework for interpretations and a forum for
demonstrating trustworthiness. In this way, cate-
gory management – especially its hard, calculative
648 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
scorekeeping and comparisons rather than softer
aspirations – presented a common language for a
range of organizational actors and a space in
which claims could be made and tested.
Although trust featured heavily in initial com-
munications between ConCo and PulpCo (re?ect-
ing its prominence in trade press descriptions of
category management), over the course of the rela-
tionship, a certain self-preserving set of accounting
procedures was adapted with the emphasis on price,
market controls and open communication of data
among competing suppliers. By instilling regular
category reviews, the Trading Director was able to
elevate the focus on the ?nancial performance deliv-
ered by each supplier. The ‘category review’ process
came to provide the dominant meaning system for
action and intervention. In so doing, the Trading
Director successfully established a ‘?nancial perfor-
mance’ and ‘value’ discourse as a major theme of
internal communication. The accounting structures
employed by ConCo were operationalized as a form
of surveillance and discipline rather than a learning
and co-ordination device. Measures promised to
imbue ‘‘partnership’’ as promoted by advocates of
category management in the trade press were
noticeably absent in the decision frame adopted at
ConCo. Instead, the vigilant monitoring corroded
and undermined the potential for trusting behav-
iour, and declining trust in turn fuelled action and
adversarialism.
The disparity between category management
theory and how it played out in this relationship
suggests that the stated goals and ascribed trust-
based bene?ts of category management may be
unrealistic in organizations that have their history
and power relations steeped in hierarchical, auto-
cratic and adversarial buyer–supplier relations.
Advocates of category management implicitly
assume that all agents understand and are commit-
ted to the concept, that the theory is ‘‘free’’ from
its own contradictions and that it ‘‘breaks with’’,
rather than occurring within, and possibly rein-
forcing, existing relations of hierarchy and power.
Ardent advocates might argue that in this case, the
implementation, with its focus on coercive reviews
rather than information sharing, has compromised
the concept to an extent that is untenable. How-
ever, given the context, the contradictory content
and normalizing e?ect of category management,
it might be more correct to question whether the
aims of the concept are attainable, especially with
regard to trust and trustworthiness.
With respect to trust, the empirical analysis of
this paper involves three important issues: (1) the
way that trust is understood in the retail sector;
(2) the relationships between trust and modes of
management accounting; and (3) the notion of
trust as a discursive resource.
Conceptions of trust in buyer–supplier relations
Rather than expansive, blanket concepts of trust,
it would appear that trust between organizational
actors is better conceived in terms of ‘‘accommoda-
tive intentions’’, ‘‘reliability’’ and ‘‘commitment’’.
The observations provided by interview respon-
dents in the sector suggest a narrower, more
rational and less romanticized notion of trust than
is often presumed within the management studies
literature. Respondent conceptualization of trust
tended to accord with the ‘‘encapsulated interest’’
account of trust put forward by Hardin (2002): X
trusts Y with regard to matter Z, because X believes
that it is in Y’s interest to behave in a trustworthy
fashion with regard to matter Z; in e?ect, ‘I trust
you because I think it is in your interest to attend
to my interests in the relevant matter’ (Hardin,
2002, p. 4). Trust, under this account, involves con-
sidered expectations about the interests of others to
behave in a trustworthy manner. A retailer, for
example, may wish to preserve its relationship with
a particular supplier and accordingly act in a trust-
worthy manner in its dealings with the supplier. At
the other end of the spectrum, respondents tended
to speak of distrust in terms of procedures (such
as ‘‘bias’’ and ‘‘favouritism’’ in selection of category
captains) as well as outcomes (references were made
to ‘‘pro?teering’’ and ‘‘fudging the numbers’’ to
‘‘unfairly’’ gain advantages in terms of pro?t and
volume).
Idealist accounts of accounting practice playing
a constitutional role in the development of trust
between trading partners need to be tempered by
reference to the instrumental in?uences of self-
interest and opportunism in many sectors, such as
the supermarket sector in the UK. Dissembling as
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 649
well as wheeling and dealing were seen to be com-
mon within the sector; within certain limits, they
are expected and excused. In the sector, trust does
not extend to expansive notions of benevolence, or
trusting inter-organizational partners to never use
the option of exit. It is generally understood that
any mutual commitments are always conditional
upon being able to demonstrate quality, pro?tabil-
ity and competitiveness. Buyers frequently spoke of
negotiations as a ‘‘game’’ to be ‘‘won’’ and there
was widespread cynicism regarding the integrity
of accounting information shared under open book
accounting initiatives. Further, what appears to
indicate trust and trustworthiness may in fact be
largely a consequence of domination, lack of alter-
natives, or simple mutual dependency.
Trust and accounting control: uneasy bedfellows?
The interviews provide evidence suggesting that
certain forms of calculation and highly demanding
forms of accountability can be deployed in a way
that is incompatible with the constitution of
trust-based relations. Strict ?nancial and opera-
tional controls and tight performance targets
placed upon buyers brought great visibility to
costs and related ?nancial outcomes. Benchmark-
ing and trend analyses were performed to routinely
monitor the development of supply costs over time
and to intervene when necessary. The expansive
use of open book accounting to engender competi-
tion (through the provision of sensitive sales data
to a range of potential suppliers) and regular sur-
veillance did little to promote trust between orga-
nizational actors at ConCo and PulpCo.
This resonates with Frances and Garnsey (1996),
who explore the notion of accounting as a system of
accountability in networks. Examining the supplier
networks of supermarket chains, the authors pro-
vide a detailed account of how large retail corpora-
tions use formal accounting techniques and
information technology rather than purely trust-
based relations to control other network partici-
pants, tighten inter-organizational linkages to their
bene?t and increase their in?uence throughout the
network. Central to their analysis is the notion that
accounting (with its high degree of systemtrust) has
been implicated in the acquisition of power and eco-
nomic bene?t by supermarkets because it enables
‘‘an accountability from supplier to supermarket
in the name of the customer’’ (p. 596).
The ?eld study also suggests that the emerging
body of work in accounting dealing with trust
(e.g., Coletti et al., 2005; Tomkins, 2001) may have
under-played the signi?cance of power in the for-
mation and operation of business relationships.
Despite the rhetoric of the trade press and pro-
nouncements made in the public sphere, ConCo’s
punitive action against PulpCo for its failure to
conform to ConCo’s demands is re?ective of the
role of domination structures rather than mutual
trust. Structuration theory provides a useful tool
for exploring the dynamism of trust in?uenced
by communications (‘talk’), exercises of power
and the use of sanctions (‘walk’).
Trust as a discursive resource
Accounting scholars have been keen to point
out that accounting has a role to play in the con-
stitution of trust (e.g., Chenhall & Lang?eld-
Smith, 2003; Seal et al., 1999; Tomkins, 2001).
Certainly, the ?ndings of this study suggest that
regimes of accounting practices can play a crucial
role in constituting system trustworthiness in gov-
ernance structures due to the way calculative
regimes are perceived as objective, rigorous and
neutral. Further, respondents across the sector
also indicated that particular modes of supply
chain accounting – open book costing, joint per-
formance measurement and joint forecasting –
can provide a historical context within which
actors could situate interpretations, increase com-
mitment from both parties to a relationship and
help instill personal trust in actors’ competence
and intentions. Moreover, due to shared norms
relating to the acceptability of various forms of
accounting scrutiny and the extraordinary calcula-
tive and reporting capability of various category
management software systems, the mere act of col-
lecting performance data was not seen to be
broadly antithetical to the formation and mainte-
nance of long-term relationships.
However, it should be noted that accounting
practice may become disconnected frompublic pro-
nouncements about trust and images of trustwor-
650 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
thiness projected by organizations (see Hardy et al.,
1998). Institutional theorists have long noted the
possibility of a disparity between the technical work
performed internally and the image projected to
external parties by means of making appropriate
symbolic displays (Oliver, 1991). There appeared
to be a very loose coupling between public state-
ments about trusting relations and the practice of
buyer–supplier relations in the ConCo and PulpCo
?eld study. In the relationship, it is clear that there
was considerable reference to the words ‘‘trust’’
and ‘‘trustworthiness’’ in both inter-organizational
communications, public statements and interviews.
However, it is di?cult to reconcile this discussion
with the intended action and the prevailing domina-
tion structures in the relationship. Rather than a
trusting atmosphere, an opportunistic tone came
to pervade the relationship, particularly at the level
of the Trading Director at ConCo and the Account
Manager at PulpCo.
13
Open book accounting, a
mode of supply chain accounting argued by advo-
cates to increase inter-organizational commitment
Table 3
Notions of trust mobilized by the major retail players in the UK retail sector
Retailer Exemplar comment Website
Tesco ‘‘We have developed long-term working relationships with our suppliers
and by working together to meet customer needs we have both grown our
market share. For example our existing supply base for beef has been in
place for over 10 years . . . [We] treat people how we like to be
treated. . . [and] trust and respect each other’’
www.tesco.com
Sainsbury ‘‘We are working to improve relationships with our suppliers and our
success is shown in our independently conducted, suppliers’ survey. Our
suppliers generally rate us better than our competitors. In particular we
score well for product quality and in conducting fair negotiations. Most
recently, we have improved the openness of sharing information and
improved communications. This has taken the form of joint consultative
business plans with our key suppliers’’
www.j-sainsbury.co.uk
Safeway ‘‘Our objective is to achieve a mutually pro?table relationship with our
suppliers. We collaborate with them on the development of new ideas in
product development and supply chain operations. . .’’
www.safeway.co.uk
Waitrose ‘‘Each of our buyers is an expert in his or her own ?eld. Their job is to seek
out the best sources of the best quality food and unusual ingredients that
can’t be found in other supermarkets. Much of their time is spent with the
farmers, growers and suppliers, building relationships based on trust and
respect . . .’’
www.waitrose.com
Marks & Spencer ‘‘We and our suppliers have found from experience that when people are
treated with respect, in decent working conditions and fair rates of pay,
then both they and their companies bene?t from increased commitment
and productivity. . . Our relationships with suppliers are conducted within a
published set of standards and every year we commission a survey of how
our suppliers see us. The results of this survey are communicated at a
conference for our largest 150 food suppliers. We also run farmers listening
groups at agricultural shows . . .’’
www.marksandspencer.com
Co-Op ‘‘The Co-operative Group seeks to build partnerships with our suppliers,
developing relationships that are based on trust and are to our mutual
advantage. We also want our suppliers to share our values and, wherever
possible, will encourage them to put these into practice. . .’’
www.co-op.co.uk
13
It is interesting to note that the trajectory of the relationship
may have been di?erent simply with more frequent communi-
cation between more senior managers from both organizations.
Murakami and Rohlen (1992, pp. 70–73) argue that trust is
enhanced by actions that occur over and above the strict
observance of rules and contracts. This possibility underlines
the importance of active management of processes rather than
simply establishing a process and relying on accounting tools
and technology to guide relationships.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 651
and provide a forum for fruitful learning and dia-
logue, was used in the case to induce competitive
bids from rivals. Through incentives and targets
on buyers, the Trading Director in the case actively
sought to enhance the visibility of particular ?nan-
cial performance indicators deemed to be
‘‘unacceptable’’.
Trust as a discursive resource results from a
deliberate manipulation of signi?cation structures
to mask the consolidation rather than dispersion
of power. Both generated trust and trust as a discur-
sive resource involve attempts to create signi?cation
structures that increase stability and foster a sense
of community. Where they crucially di?er is in
terms of reciprocity of trusting behaviour. The ?eld
study contains several attempts to signal trustwor-
thiness (through public pronouncements, ‘‘partner-
ship’’ commitments and inter-organizational
correspondence) motivated by a desire to secure
agreement and reduce the chances of opposition
by creating legitimacy for both actor and actions.
In this sense, the deliberate manipulation of claims
to commitment, legitimacy, sincerity and clarity
represent a sophisticated attempt to secure co-oper-
ation rather than the pursuit of trust generation.
There is mounting evidence from the UK retail
sector to corroborate elements of the ConCo and
PulpCo ?eld study. The notion of trust receives
much attention in declarations of intent in the
retail sector. Although there are di?erences in
emphasis, many supermarkets profess a desire to
pursue the bene?ts of partnership with suppliers
in o?cial channels. Table 3 is representative of
the preponderance of public statements made by
the major multiples.
This recourse to ideas surrounding trust in the
sector is di?cult to reconcile with many commonly
reported practices.
14
In 1999, the UK Competition
Commission launched an inquiry into supermarket
operations following ongoing and widespread alle-
gations of pro?teering from both consumers and
suppliers. However, according to many commen-
tators, the investigation was shrouded in an atmo-
sphere of fear and distrust (see Hingley, 2005).
Most suppliers were unwilling to be named, and
in many cases were also unwilling to identify the
retailer that was the subject of their complaints
Table 4
Practices engaged in by multiples
Practice Never Rarely Sometimes Fairly often Often No answer
Delay payments by 15 days more than terms 44 33 18 2 2 2
Delay other amounts due by more than 15 days 32 34 22 7 4 2
Break other contract terms 39 30 12 4 0 16
Change quality agreed without adequate notice 58 25 11 0 0 7
Change other agreed requirements without adequate notice 35 19 26 7 2 11
Threaten delisting without reasonable cause 21 42 32 2 0 4
Require charitable contributions to be made 32 16 37 9 4 4
Require payments/discounts when main party’s
pro?t from products is less than the main party
expected
26 25 30 11 5 4
Require buyback of unsold goods 47 35 11 4 0 4
Make deductions from returns to cover wastage 54 23 12 2 4 5
Impose slotting charges 44 11 18 5 16 71
Charge for any shelf space 49 19 18 4 7 4
Charge for listing 37 19 25 9 5 5
Source: Adapted from Competition Commission (2000, p. 235).
14
For example, the practice of regular buyer rotation militates
against the type of deep personal interaction traditionally
associated with trust-based accounts. More than two-thirds of
the retailers interviewed stated that to some extent they try to
‘‘maintain a competitive edge’’ by periodically rotating buyers
between categories. Further, though open book accounting is
venerated by many scholars (Cooper & Slagmulder, 2004; Dyer,
1996), interview responses across a range of large supermarkets
and branded manufacturers suggest that it is more often
gestured at than seriously practiced.
652 C. Free / Accounting, Organizations and Society 33 (2008) 629–662
for fear of reprisals. In one speci?c instance, a sup-
plier stated that it would be commercial suicide for
them to give a true and honest account of all
aspects of their relationships with supermarkets.
Notwithstanding, the report of the inquiry (Com-
petition Commission, 2000) revealed a range of
practices that are di?cult to reconcile with the
trust-related posturing in the sector (as well as
called for a code of practice to govern relation-
ships between retailers and suppliers). These prac-
tices are displayed in Table 4.
Conclusion
Recent social and political economic theory has
been very taken with the role of trust in economic
relations, often in reaction against neo-liberal
exaggerations of the su?ciency of self-interest
and contract in producing successful economic
performance (see, for example Fukuyama, 1995;
Misztal, 1996). While mainstream economic
theory’s emphasis on self-interest has led it to
ignore or overlook the role of trust in economic
relationships, trust as an explanatory variable of
inter-organizational interactions can also be over-
estimated, especially where markets and competi-
tive economic behaviour are concerned. If actors
cloak their actions in terms of the partnership
and mutual interest, then there are major di?cul-
ties in attributing motives, making trustworthiness
judgments and distinguishing between trust talk
and walk. To complicate matters further, real-life
situations are likely to involve mixed motives.
Accordingly, measures of trust that rely on Likert
scale responses to a single question about trust-
worthiness (Coletti et al., 2005) or manager tenure
as a proxy (Gibbs et al., 2004) should be inter-
preted with caution.
The evidence and analysis presented here begin
to lay the groundwork for a conceptualization of
trust that has both academic and practical bene-
?ts. The intent to build trust and tighten relations
should not be uncritically con?ated with more
open modes of accounting and social controls. It
is important that researchers distinguish between
generated trust and the use of trust as a discursive
resource to produce a more nuanced understand-
ing of the relationship between accounting prac-
tice and notions of trust and trustworthiness.
While forms of accounting practice and trust need
not be opposing alternatives, considerable care
must be taken with interpreting statements about
trust and the symbolic management of trust-
worthiness.
Several ideas are implied in this paper as an
agenda for further research. In particular, future
research dealing with the role accounting can play
in generating trust and trustworthiness is wel-
come. Linking trust to communication and mean-
ing in naturalistic settings allows researchers to
better distinguish between trust and power-based
co-operation. Both rest on shared meaning how-
ever, in the case of trust, shared meaning is either
pre-existing or is mutually constituted; in power-
based relationships, meaning is either manipu-
lated or imposed by dominant partners. Further
research is also required into the way that open
book accounting operates in practice. The evi-
dence presented here suggests that heavy-handed
forms of accountability and the indiscriminate
demands for open book accounting are unlikely
to create trust and, moreover, provide strong
incentives for manipulated management account-
ing information. More in-depth studies through-
out the world, covering a time horizon of
several years and staying in close contact with
the actual development of relationships, would
permit the validation of the insights gained from
the case studies and provide an even deeper
understanding of not only the interplay between
accounting, trust and relationship development,
but also the nature of category management
arrangements.
Acknowledgments
The author wishes to acknowledge comments
by Chris Chapman, Anthony Hopwood and John
Cullen as well as participants at workshops at
She?eld Hallum University, the Sa? ¨d Business
School, Oxford University and Queen’s School of
Business.
C. Free / Accounting, Organizations and Society 33 (2008) 629–662 653
Appendix 1. An overview of articles in the accounting literature deploying the concept of trust
Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Armstrong
(1991)
A critique of agency theory
proposing revisions to its
epistemology, theorization
of social action and
conceptualization of
organization
Theoretical Critical No speci?c de?nition of trust is
provided. Trust is conceived in terms
of relationships that complement and
partially contradict existing agency
incentives and monitoring systems
of control between principals and agents.
The trustworthiness of agents is
di?erentiated from interpersonal trust
Trust is argued to be a means of control
that is socially produced in a costly
manner. Given these costs, incentives
exist for owners to displace trust from
agency relationships by monitoring
agents, arguably impeding the
production of economic surplus on
which the system depends
Neu (1991) Examines the production of
trust in the process of new
stock issues
Field study Interpretive Trust is de?ned as ‘‘social and constitutive
expectations common to all exchange
participants’’ and consists of process-based
(strongest), character-based and institutional-
based (weakest) mechanisms that produce
expectations. Trust is argued to be necessary
for contracting, though contracts are
imperfect substitutes for trust
The case study suggests that the Canadian
institutional environment consists of
multiple loosely-coupled trust-producing
institutions. The institutionalization of
process and character-based information
does not lead to process-based trust and
in fact it can have unintended consequences
6
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i
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t
y
3
3
(
2
0
0
8
)
6
2
9
–
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6
2
Ross (1994) Examines the role of trust
‘‘as a moderator of the e?ect
of using accounting
information for performance
evaluation on job-related
tension’’
Archival Positivist No speci?c de?nition of trust is provided. Trust
is used as an exogenous variable. It is measured
empirically through a four-item measure
The ?ndings support the notion that trust
moderates the e?ect of accounting-based
performance evaluation styles (budget-
constrained, pro?t-conscious and
non-accounting) on job-related tension
Jonsson and
Macintosh (1997)
Considers the tensions
between ethnographic,
critical and rational
accounting research, and
how ethnographic research
may be advantageous in
certain settings
Theoretical Critical No speci?c de?nition of trust provided. The
authors note that trust is a di?cult concept
for research, since its intuitive meanings get
in the way of discursive understanding
Trust is viewed di?erently in di?erent types
of accounting research. It is suggested that
ethnographic research may hold advantages
in researching trust in relation to accounting
Seal and Vincent-
Jones (1997)
Examines the impact on trust
as contracting relations and
the impact of particular
governance mechanisms
Field study Interpretive No speci?c de?nition of trust provided. The
authors note a lack of consensus on what trust
actually is and discuss risk and vulnerability
as key components of trust. They observe that
though trusting relationships are assumed to be
welfare enhancing, negative aspects also exist
The study makes minimal conclusions
regarding trust, concluding that ‘‘trust and
contract are not antithetical in practice’’
Seal et al. (1999) Examines the constitutional
role accounting plays, through
costing and performance
measurement technologies,
in establishing and managing
trusting and collaborative
business relationships
Field study Interpretive No speci?c de?nition of trust is advanced
The study contrasts Lorenz’s (1988) sceptical
approach to trust and Sako’s (1998) analysis
of trust as contractual trust, competence trust
and goodwill trust. Various uses of trust and
approaches to trust are explored within the
particular case study. The authors conclude
that, both in inter- and intra-organizational
environments, accounting may play a
constitutional role in the establishment
and management of trusting and collaborative
business relationships that goes beyond the
technical to a more symbolic level
(continued on next page)
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Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Whitley (1999) Examines the variance of
management control systems
across various institutional
contexts, including ?rms,
sectors and societies
Theoretical Positivist No speci?c de?nition of trust provided. The
focus of the study is ‘‘systemic trust’’, that is
trust in an economic system, as a control
mechanism
Trust is used as a cross country exogenous
variable that in?uences the type of
management control system. When trust
is high, formal rules are e?ective,
whereas when trust is low, systems
should be based on personal control and
supervision
Van der Meer-
Kooistra and
Vosselman (2000)
Examines di?erences in
management control
patterns for structuring
inter?rm relationships
Field study Positivist No speci?c de?nition of trust provided.
Trust is argued to be a type of control
mechanism that arises through
learning and adaptation processes because
of repeated transactions between actors in
a network
The authors use a transaction cost economic
framework to identify three factors –
transaction characteristics, transaction
environment characteristics and transacting
party characteristics – that may a?ect control
systems design.
These are then ‘matched’ with three control
patterns – market-based, bureaucracy-
basedand trust-based. Their two ?eld
studies did provide some support for
their transaction cost economics-based
hypotheses, however the high risk alliance
was not found to be managed via a trust-
based pattern of control
Appendix 1 (continued)
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i
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t
y
3
3
(
2
0
0
8
)
6
2
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–
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6
2
Tomkins (2001) Examines the interaction
between accounting
information and trust in
inter-organizational
relationships, alliances
and networks
Theoretical Positivist Trust is de?ned as ‘‘the adoption of a belief by
one party in a relationship that the other party
will not act against his or her own interests,
where this belief is held without undue doubt
or suspicion and in the absence of detailed
information about the actions of that other
party’’
Tomkins theorizes that trust
intensity is a fundamental factor
in determining the types, amount
and focus of an organization’s
information and accounting
systems. In particular, Tomkins
suggests that a functional, U-shaped
relationship exists between trust and
information needs
Jacobs and
Kemp (2002)
Examines the relationship
between social capital
and accounting
Case study Interpretive No speci?c de?nition of trust
provided. Trust is equated with
social capital or socially accepted
norms
The study suggests that where
social capital is strong enough,
accounting records are not necessary
King (2002) Studies the e?ect of non-
credible communication and
group a?liation on auditors’
self-serving biases through
a game theory experiment
Experimental Positivist No speci?c de?nition of trust is
provided. Trust is incorporated
into an experimental design using
a pu?ery manipulation where
managers make non-binding
promises to signal commitment
and facilitate the formation of
reciprocal trust. Trust is equated
with the lowest audit cost and
probability of detecting fraud
The study ?nds that managers
can increase auditors’ willingness
to trust managers through pu?ery
(continued on next page)
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Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Chenhall and
Lang?eld-Smith
(2003)
Examines the way in which
synergies or incompatibilities
between trust and control
systems may a?ect
organizational performance
Field study Interpretive Trust is de?ned as ‘‘a psychological
state comprising the intention to
accept vulnerability based on
positive expectations of the
intentions or behaviours of another’’
The study ?nds that gain sharing, a
mechanistic form of control, may be
compatible with organizational trust
(though inconsistent with the
development of personal trust) and that
the adoption of teams promotes personal
trust and the sharing of values and goals
Johansson and
Baldvinsdottir
(2003)
Examines the role of
accounting and accountants
as creating trust or acting as
carriers of trust in the
performance evaluation
process
Field Study Interpretive Trust is de?ned based on the de?nition
provided by Tomkins (2001) (see above).
Trust is created and accumulates
through ongoing processes
The study argues that performance
evaluation and enactment processes
are dependent upon trust between
all parties. It highlights importance
of individuals within organizations
as carriers of trust
Lang?eld-Smith
and Smith (2003)
Drawing upon prior
research, the compatibility
between trust and tight
accounting-based controls
Field Study Interpretive The article reviews a variety of
de?nitions advanced in prior
research, focusing on con?dent
expectations
In a single case study, the
development of trust, and particularly
goodwill trust, was essential to achieve
control in the relationship, at all stages.
Tight accounting controls and social,
trust-based controls are found to be
compatible
Appendix 1 (continued)
6
5
8
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c
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,
O
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g
a
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a
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t
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3
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8
)
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2
Dekker (2004) Examines the control of
inter-organizational
relationships
Field study Interpretive Trust is de?ned as ‘‘a psychological
state comprising the intention to accept
vulnerability based upon positive
expectations of the intentions or
behaviour of another.’’ Trust is
seen as an informal, social control
mechanism that may take various
forms such as calculus- based trust,
relational trust and institution-based
trust
The study considers the relationship
of formal controls and trust and ?nds
that trust and accounting controls are
not mutually exclusive. The study
concludes that ?rms may use di?erent
con?gurations of governance
mechanisms to attend to appropriation
concerns and co-ordination requirements
Gibbs et al. (2004) Examines the role of
subjectivity in incentive
systems
Archival Positivist The authors use tenure measured as the
number of years that a department
manager has been at the dealership as
a proxy for trust
The study ?nds that trust moderates
the use and acceptance of subjective
incentives
Seal, Berry, and
Cullen (2004)
Uses Gidden’s structuration
theory to analyze how
inter-?rm accounting, an
expert system, is re?exive
in terms of supply chain
actors
Field study Interpretive No speci?c de?nition of trust is
provided
Using structuration theory, trust
is viewed as a faith in expert,
abstract systems, such as accounting.
Trust and risk are seen to drive
social processes of dis- and re-embedding
that characterize late modernity
(continued on next page)
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,
O
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a
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a
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n
s
a
n
d
S
o
c
i
e
t
y
3
3
(
2
0
0
8
)
6
2
9
–
6
6
2
6
5
9
Citation Research
focus
Method Research
perspective
De?nition of trust and
?ndings with respect to trust
Barrett, Cooper, and
Jamal (2005)
Examines the co-ordination
of global audits through an
examination of co-ordinating
mechanisms, inter-o?ce
instructions and risk-based
audit methodology
Field study Interpretive No speci?c de?nition of trust is provided.
Trust is discussed largely in the context
of specialist experts and expert systems
(drawing on Giddens’ notion of trust
in abstract systems)
The study ?nds that trust is an important
factor in the co-ordination of multi-site
audits and emphasizes the importance
of trust between superiors and
subordinates in audit interview
procedures
Coletti et al. (2005) Examines the e?ect of
control systems on co-
operation and trust in
collaborative settings
Experimental Positivist Trust is de?ned as ‘‘one’s perception
of another’s trustworthiness (which is
in turn de?ned as ‘‘an innate personal
characteristic re?ecting one’s preference
for upholding some social norm of
behaviour, regardless of economic
initiatives’’). Trustworthiness is measured
as the observers’ agreement with that
statement ‘‘The participant is a trustworthy
individual’’ on a 10-point Likert scale
The study ?nds that in collaborative
settings, a strong control system can
enhance the level of trust and
co-operation among collaborators
Appendix 1 (continued)
6
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2
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