Inter-organizational control and firm boundaries in close relationships: Evidence from car sales in Sweden

Abstract: Addressing two separate but related research gaps, this study contributes to the field of inter-organizational control (IOC) in the contextually distinct dealer setting, exploring the relation between IOC and different forms of firm boundaries. Building on prior research on market-based, hierarchical and relational control patterns and on theories of firm boundaries, we develop an analytical framework. Using a qualitative case study of the inter-organizational relationship between a premium car brand and its dealer network in Sweden, we first find that the dealer setting puts specific demands on relational control patterns to mitigate hierarchical rigidity. Second, we apply our analytical framework and conclude that the combination and integration of control patterns is driven by the need to set strategic firm boundaries that permeates legal boundaries, stressing the importance of boundary spanning actors and forums.