Controlling Case study

Faculty of Business and Economics

Management control of supplier relationships in manufacturing:
A case study in the automotive industry
Eli Pernot and Filip Roodhooft

DEPARTMENT OF ACCOUNTANCY, FINANCE AND INSURANCE (AFI)

AFI_0717

Management control of supplier relationships in manufacturing:
A case study in the automotive industry

Eli Pernot*
Aspirant of the Funds for Scientific Research Flanders
Katholieke Universiteit Leuven
Naamsestraat 69
3000 Leuven - Belgium
E-mail: [e-mail]

and

Filip Roodhooft
Katholieke Universiteit Leuven &
Vlerick Leuven Gent Management School
Naamsestraat 69
3000 Leuven - Belgium
E-mail: [e-mail]

*

Corresponding author

Management control of supplier relationships in manufacturing:
A case study in the automotive industry

Abstract
This paper studies management control design of supplier relationships in manufacturing, a supply chain phase currently under-explored. Compared to supplier relations during procurement and R&D, which research found to be governed by a combination of formal and informal controls, supplier relations in manufacturing are more formal, so that they could be governed by more formal and less informal controls.
To refine the management control system and influencing contingencies, we propose a theoretical framework specifically adapted for the manufacturing stage. This framework is investigated by an in depth case study of the supplier management control of a Volvo Cars production facility. We identify three types of suppliers visualizing the associations in the framework and illustrating the framework’s explicative power in
(automotive) manufacturing. Furthermore, the case contradicts that supplier relations in the manufacturing phase are governed by little informal control, because the automaker highly values the role of trust building and social pressure. Most notably, a structured supplier team functions as a

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