Strategic Partnerships and Performance of Cooperative Societies in Vihiga County, Kenya

Abstract

Strategic partnerships are considered as one of the best ways to deal with stiff competition, limit the cost of business operations, acquire new markets and use of technology to effectively utilize resources and ultimately maximize performance. Thus, to provide quality services and improved performance, cooperative societies in Vihiga County have embraced strategic partnership. The study’s objective was to investigate the effect of strategic partnerships on performance of Cooperative Societies in Vihiga County. This study was anchored on the Stakeholder, Social – Network and Transaction Cost Economics theories respectively. This study made use of cross-sectional descriptive survey design. The population of the study was 33 cooperative societies in Vihiga County and therefore a census survey was adopted. The study collected primary data through the use of a self-administered questionnaire. Both descriptive and inferential statistics was used to analyze the gathered. The descriptive statistics showed that while cooperative societies in Vihiga County have been existence for twenty years, majority being savings and credit cooperatives and with majority having between 10 to 50 employees, their main objective of entering partnership agreements were to maximize profits and to protect and enlarge its market share. The regression findings revealed that marketing relations partnerships had the most significant influence on performance. Research and development partnerships had a moderately strong influence on performance. On the contrary banking and equity investments and suppliers’ relationship had no significant influence on performance. The study concluded that while marketing relations partnerships played a significant and positive role in determining performance of cooperative societies in Vihiga County, research and development partnerships had a moderately strong relationship with performance. These findings confirmed the Stakeholder theory in which the overall goal of an organization is to identify key strategic partnerships that significantly affect performance. The findings also confirmed the Social Network and Transaction theories respectively where organizations as social systems, directly or indirectly connect with other organizations through strategic partnerships for performance through various mechanisms such as information flow and knowledge and resource sharing. The study recommends that cooperative societies in Vihiga County must not only embrace innovative marketing relations partnerships, but further embrace research and development, supplier and banking and equity investment partnerships to improve their market share and performance. The study was limited due to its focus on cooperative societies in Vihiga County and whose interpretations could not be generalized to cooperative in other counties as they operate in different environments. There is need for more studies to investigate the relationship between strategic partnerships and performance by including all cooperative societies in Kenya.