RISK FACTORS INFLUENCING THE SURVIVAL OF STRATEGIC ALLIANCES: EVIDENCE FROM KENYA

Charles M. Rambo

International Journal of Management and Marketing Research, 2012, vol. 5, issue 2, 77-88

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.

Keywords: Risk; Risk Factors; Small and Medium Enterprises; Alliance Survival; Alliance Failure (search for similar items in EconPapers)
JEL-codes: O16 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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