Strategic Alliance and Performance of Small and Medium Enterprises in Manufacturing Sector in Nairobi City County, Kenya.
Loading...
Date
2022
Authors
Muthoka, Richard Kioko
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Globally, the role played by Small and Medium Enterprises is critical in contributing towards industrialization and economic growth. However, this contribution is minimized by the numerous challenges experienced by Small and Medium Enterprises which also affect their performance. The general objective for the study was to investigate the effect of strategic alliance on performance of Small and Medium Enterprises in the manufacturing sector in Nairobi City County, Kenya. The specific objectives for the study sought to establish the effect of firm-based motives, environmental-based motives, and partner related motives on the performance of Small and Medium Enterprises in the manufacturing sector in Nairobi City County, Kenya. The study also sought to determine the mediating effect of level of collaboration and the moderating effect of institutional pressure on the relationship between strategic alliance and performance of Small and Medium Enterprises in the manufacturing sector in Nairobi City County, Kenya. The study was grounded on the resource-based view, resource dependence theory, dynamic capabilities theory, institutional theory, the model for inter-organizational network structures, strategic choice theory and the goal approach theory. A positivism research philosophy was adopted for this study while the study used a descriptive and explanatory research design which was cross sectional in nature. A census was done of all 74 Small and Medium Enterprises that formed the target population while the chief executive officer or a senior manager formed the respondents for the study. The survey used a structured questionnaire which was self-administered to collect primary data. The reliability of the research instrument was measured using Cronbach alpha coefficient and was considered reliable at 0.7 level. The survey data was analyzed using descriptive and inferential statistics and the study findings revealed that firm-based motives, environmental-based motives, and partner related motives had a positive and significant effect on performance of Small and Medium Enterprises in the manufacturing sector in Nairobi City County, Kenya. The level of collaboration had a partial mediating effect on the relationship between strategic alliance and organizational performance while institutional pressure had no significant moderating effect on the relationship between strategic alliance and organizational performance. The study concluded that diverse firm-based, environmental-based, and partner related motives motivate Small and Medium Enterprises in the manufacturing sector to form strategic alliances and that these motives have a positive and significant effect on the performance of Small and Medium Enterprises. The study also concluded that level of collaboration is a critical component that influences the contribution of strategic alliance towards organizational performance while institutional pressure, though an important factor that influences firm strategic behaviour, its effect was not significant on the relationship between strategic alliance and organizational performance. The study recommended that top managers in Small and Medium Enterprises should align their alliance formation motives to their value chain activities to enable them amass critical resources to support such activities. Future research can be undertaken targeting other sectors and counties to establish whether the same conclusion can be drawn.
Description
A Thesis Submitted to the School of Business in Partial Fulfillment for the Requirements for the Award of Degree of Doctor of Philosophy in Business Administration (Strategic Management) of Kenyatta University, June 2022
Keywords
Strategic Alliance, Performance, Small and Medium Enterprises, Manufacturing Sector, Nairobi City County, Kenya