Strategic Alliances and Performance of Commercial State-Owned Enterprises in Nairobi City County, Kenya
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Date
2025-08
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Publisher
Kenyatta University
Abstract
State-owned enterprises (SOEs) have been posting poor performance, with a sizable being constantly seeking financial support and bailouts from the exchequer. This calls for strategies to enhance their performance, with Strategic Alliance being a promising strategic route. The study examined the effect of strategic alliances on the performance of commercial state-owned enterprises in Nairobi City County, Kenya. Specifically, the research evaluated the effect of resource sharing, risk sharing, regulatory compliance and cost efficiency-based alliances on the performance of commercial state-owned enterprises in Nairobi, Kenya. Public interest, resource-based view, transaction cost and resource dependency theories underlie this study. A descriptive survey design was adopted, with the study targeting all 46 firms. A census of the firms was undertaken, with purposive sampling being adopted to select one senior manager from each commercial state-owned enterprise. Structured questionnaires were adopted to source data. The study examined the reliability of a questionnaire based on the internal consistency measure of Cronbach at 0.7 threshold. Further, face and content validity were ensured via the pre-study and strategic management expert opinion, respectively. Filled questionnaires were verified for completeness, after which the questionnaire was coded before the data were keyed into the Statistical Package for the Social Sciences version 25. Percentages and frequency distribution were generated. Pearson correlation and multivariate regression were used to establish the strategic alliance-performance nexus. The coefficient of determination showed that strategic alliance aspects explained 88.7% of the total variation in performance of the firms studied. Further, the F-calculated (f =63.043) was greater than f-critical (f=2.69), implying that strategic alliances undertaken among commercial state-owned enterprises had significantly affected their performance. Performance of commercial state-owned enterprises was strongly predicted by resource sharing based alliance (β1= .321, t= 3.309, p=.001<.05). Performance of commercial state-owned enterprises was strongly predicted by risk sharing based alliance (β2= .369, t= 2.979, p=.005<.05). Regulatory compliance-based alliance strongly enhanced commercial state-owned enterprises performance (β3=1.171, t= 8.387, p=.000<.05). Finally, performance of commercial state-owned enterprises was strongly explained by cost efficiency-based alliance (β4= .454, t= 5.091, p=.000<.05). Thus, the performance of commercial state-owned enterprises in Kenya was strongly predicted by strategic alliances. The study findings inform top management and parent ministries of commercial SOEs to enter into more strategic alliances with the motive to access resources controlled by strategic partners, share risks, achieve cost efficiency and operate in accordance with sectoral and regulatory pronouncements and frameworks.
Description
A Research Project Submitted to the School Of Business, Economics, and Tourism as a Partial Fulfilment of the Degree of Master of Business Administration (Strategic Management) of Kenyatta University. August, 2025
Supervisor
Nahashon Langat