IDEAS home Printed from https://ideas.repec.org/a/ibf/ijmmre/v5y2012i2p77-88.html
   My bibliography  Save this article

Risk Factors Influencing The Survival Of Strategic Alliances: Evidence From Kenya

Author

Listed:
  • Charles M. Rambo

Abstract

Between one-half and two-thirds of strategic alliances formed by Small and Medium Enterprises (SMEs) fail to realize their purpose due to unmitigated risk factors. Most studies on strategic alliances and associated risks focus on developed economies. Using the Kenyan case, this study sheds light on risk factors influencing the survival of SME alliances in the Sub-Sahara Africa (SSA). This study sourced primary data from 120 SMEs involved in strategic alliances. Quantitative and qualitative techniques were used to analyze the data. Results indicate that the survival of SME alliances is a function of factors including the proportion of skilled staff, explaining up to 8.7 percent of variance, transportation cost (8.1%), information sharing (7.5%), level of trust among partners (6.6%) and integration of computers to support business activities (5.5%). The results show that SME strategic alliances remain risky ventures, requiring a concerted effort of all stakeholders to initiate appropriate mitigative measures to avert economic losses resulting from alliance failure. The study underscores the need for SSA governments to provide tax incentives, improve infrastructure and explore cheaper energy alternatives.

Suggested Citation

  • Charles M. Rambo, 2012. "Risk Factors Influencing The Survival Of Strategic Alliances: Evidence From Kenya," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 5(2), pages 77-88.
    • Handle: RePEc:ibf:ijmmre:v:5:y:2012:i:2:p:77-88
    as

    Download full text from publisher

    File URL: http://www.theibfr2.com/RePEc/ibf/ijmmre/ijmmr-v5n2-2012/IJMMR-V5N2-2012-7.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bruce Kogut, 1988. "Joint ventures: Theoretical and empirical perspectives," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 319-332, July.
    2. Rosemary Atieno, 2009. "Linkages, Access to Finance and the Performance of Small-Scale Enterprises in Kenya," WIDER Working Paper Series RP2009-06, World Institute for Development Economic Research (UNU-WIDER).
    3. Tailan Chi, 1994. "Trading in strategic resources: Necessary conditions, transaction cost problems, and choice of exchange structure," Strategic Management Journal, Wiley Blackwell, vol. 15(4), pages 271-290, May.
    4. Kent D Miller, 1992. "A Framework for Integrated Risk Management in International Business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(2), pages 311-331, June.
    5. Rosemary Atieno, 2001. "Formal and informal institutions’ lending policies and access to credit by small-scale enterprises in Kenya: An empirical assessment," Working Papers 111, African Economic Research Consortium, Research Department.
    6. Das, T. K. & Teng, Bing-Sheng, 2001. "A risk perception model of alliance structuring," Journal of International Management, Elsevier, vol. 7(1), pages 1-29.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victor Chukwunweike Nwokocha & Christopher Emmanuel Nwankwo & Ijeoma Gladys Nwosu & Ignatius Ani Madu, 2020. "An Appraisal of Production Subcontracting Toward Small and Medium Scale Enterprises Development in the Nigeria Industrial Sector: A Review Approach," SAGE Open, , vol. 10(3), pages 21582440209, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Juasrikul, Sakdipon & Sahaym, Arvin & Yim, Hyunsoon (Sean) & Liu, Richie L., 2018. "Do cross-border alliances with MNEs from developed economies create firm value for MNEs from emerging economies?," Journal of Business Research, Elsevier, vol. 93(C), pages 98-110.
    2. Robson, Matthew J. & Paparoidamis, Nicholas & Ginoglu, Dimitrios, 2003. "Top management staffing in international strategic alliances: a conceptual explanation of decision perspective and objective formation," International Business Review, Elsevier, vol. 12(2), pages 173-191, April.
    3. Jiuh-Biing Sheu, 2014. "Green Supply Chain Collaboration for Fashionable Consumer Electronics Products under Third-Party Power Intervention—A Resource Dependence Perspective," Sustainability, MDPI, vol. 6(5), pages 1-44, May.
    4. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    5. Iavor Marangozov, 2005. "From Practice to Theory of the International Joint Ventures," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 44-77.
    6. Cuypers, I.R.P., 2009. "Essays on equity joint ventures, uncertainty and experience," Other publications TiSEM 8dc79e86-c625-467f-a450-8, Tilburg University, School of Economics and Management.
    7. Hsieh, Linda H.Y. & Rodrigues, Suzana B. & Child, John, 2010. "Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner," Journal of International Management, Elsevier, vol. 16(3), pages 288-303, September.
    8. Minyoung Yea & Seokhyun Chung & Taesu Cheong & Daeki Kim, 2018. "The Sharing of Benefits from a Logistics Alliance Based on a Hub-Spoke Network: A Cooperative Game Theoretic Approach," Sustainability, MDPI, vol. 10(6), pages 1-16, June.
    9. Holger Patzelt & Dean A. Shepherd, 2008. "The Decision to Persist with Underperforming Alliances: The Role of Trust and Control," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1217-1243, November.
    10. Clemencia Osa Ouma & Charles M. Rambo, 2013. "The Impact Of Microcredit On Womenowned Small And Medium Enterprises: Evidence From Kenya," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(5), pages 57-69.
    11. Patzelt, Holger & Shepherd, Dean A. & Deeds, David & Bradley, Steven W., 2008. "Financial slack and venture managers' decisions to seek a new alliance," Journal of Business Venturing, Elsevier, vol. 23(4), pages 465-481, July.
    12. Han Smit & Enrico Pennings & Sjoerd Bekkum, 2017. "Real options and institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(5), pages 620-644, July.
    13. Malik, Tariq H. & Zhao, Yanzhi, 2013. "Cultural distance and its implication for the duration of the international alliance in a high technology sector," International Business Review, Elsevier, vol. 22(4), pages 699-712.
    14. Essien, Ubon Asuquo & Arene, Chukwuemeka John & Nweze, Noble Jackson, 2013. "An Investigation into Credit Receipt and Enterprise Performance among Small Scale Agro Based Enterprises in the Niger Delta Region of Nigeria," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 3(4), pages 1-14, December.
    15. Charles M. Rambo, 2013. "Time Required To Break-Even For Small And Medium Enterprises: Evidence From Kenya," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 6(1), pages 81-94.
    16. Essien, Ubon Asuquo & Arene, Chukwuemeka John, 2014. "An Analysis Of Access To Credit Markets And The Performance Of Small Scale Agro- Based Enterprises In The Niger Delta Region Of Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(3), pages 1-16, July.
    17. Eduardsen, Jonas & Marinova, Svetla, 2020. "Internationalisation and risk: Literature review, integrative framework and research agenda," International Business Review, Elsevier, vol. 29(3).
    18. Jonas Eduardsen & Svetla Marinova, 2016. "Decision-makers' risk perception in the internationalisation of small and medium-sized firms," International Journal of Export Marketing, Inderscience Enterprises Ltd, vol. 1(1), pages 4-26.
    19. Lewis, Yimai & Bozos, Konstantinos, 2019. "Mitigating post-acquisition risk: the interplay of cross-border uncertainties," Journal of World Business, Elsevier, vol. 54(5), pages 1-1.
    20. Alvaro Cuervo-Cazurra & C. Annique Un, 2023. "Beauty in the Eyes of the Beholders: How Government- and Consumer-Based Country-of-Origin Advantages and Disadvantages Drive Host Country Investment Dynamics," Management International Review, Springer, vol. 63(2), pages 285-312, April.

    More about this item

    Keywords

    Risk; Risk Factors; Small and Medium Enterprises; Alliance Survival; Alliance Failure;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibf:ijmmre:v:5:y:2012:i:2:p:77-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mercedes Jalbert (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.