Effects of Strategic Partnership on Financial Performance of Mortgage Companies in Kenya

Abstract

The challenges of managing businesses in the 21st century require dynamic strategies for businesses to remain competitive and to sustainably generate returns for shareholders. The global environment, within which mortgage companies compete, is increasingly more competitive. Strategic partnership as a strategy for competitive advantage has become monumental as organizations scramble for survival to reduce costs and be stronger in order to compete. The mortgage sector like most other industries operates in turbulent conditions in the market place. Studies in this field provide insights of what capabilities mortgage companies require to develop and what resources they can leverage on to navigate the tidal times of changing technology and client expectations. Review addressed the existing research gap by showing how these partnerships affect the performance of mortgage companies. The study adopted a descriptive cross-sectional survey. The target population of this study comprised of three mortgage companies in Kenya Housing Finance Company, National Housing Corporation and S&L. The questionnaires were administered to every respondent. Inferential analysis sought to establish influence of strategic alliance on performance of the mortgage industry in Kenya through the use of multivariate analysis. Results of quantitative data analysis were presented using charts and tables. The study discovered positive correlation between decision sharing and the financial performance of mortgage companies in Kenya. The study established that there is a positive relationship between resource sharing and financial performance of mortgage companies in Kenya. The study discovered positive relationship between risk sharing and the financial performance of mortgage companies. Thus the study established joint research and development is positively related to financial performance of mortgage companies in Kenya. The study recommends that the management of the mortgage companies should adopt a mode of decision sharing among the employees and develop effective communication channels to involve the employees on the process of decision making. The study recommends that the management of the mortgages companies should set out clear guidelines governing the sharing of the resources to ensure that resources are shared appropriately among the concerned departments. The study recommends that the management of the mortgage companies should be keen on identifying risks that face the company and insure the company against adverse risk that may negatively influence its operations. The study recommends that the management of the mortgage companies should conduct joint research and development on a regular basis for the benefit of the company to ensure it operates appropriately on the changing environment it is in.