The Value of Social Control in Small–Medium Firms’ Partnerships

Small-Medium Enterprises (SMEs) build relationships with other firms to achieve greater external economies of scale, market strength, or exploit new opportunities. Frequently these relationships rely more on social constrains than on formal controls to avoid opportunistic behaviour. The aim of this study is primarily investigating the functioning of SME’s long-term partnerships. In particular this research analyses the most widespread forms of SME’s partnerships and the use of the main elements of formal and social control. The general conclusion of this study is that partnerships are an important issue for small medium enterprises. Considering the general control configuration related to each type of partnership, social aspects prevail. In particular, the findings of this suggest that the use of social control in SMEs’ partnerships is positively correlated to a good evaluation of the relationship.