Strategic Alliances and Performance of Information Communication Technology Companies in Kenya

Abstract

The aim of the study was to investigate the influence of strategic alliances on organizational performance of ICT companies in Kenya. Specfic objectives were to determine strategic alliances used by Information Communication Technology companies in Kenya and to find out the effect of strategic alliances on organizational performance of Information Communication Technology companies in Kenya. The descriptive cross-sectional survey research design was applied in this study. The population of this study was the ICT companies in Nairobi. The study adopted stratified random sampling technique to select the 150 ICT companies as the target population which was 25% of the target population. Primary data was collected through the use of self administerd questionnaires. Organizational Performance was measured using market share, efficiency of the ICT companies. Based on the findings, the study concluded that ICT companies in Kenya entered into strategic alliances with other firms for a number of reasons all meant to improve their survival, competitiveness and bottom-line performance. The main strategic alliances used by ICT companies were; joint ventures; franchises; joint research and development; joint marketing; supply partnerships and outsourcing. Majority of the ICT firms used the balanced scorecard to ascertain their performance both financially and non-financially. Strategic alliance has enabled the ICT companies to improve their market share and achieve improvement in their operational efficiency. From the regression analysis, strategic alliances contribute significantly to the organizational performance of ICT companies and that strategic alliances significantly influence the organizational performance of ICT companies. The study recommended that the management of the ICT companies should be keen to uncover manipulative behaviors and should institute ‘air-tight’ deals that protect their firms from such exploitative maneuvers in strategic alliances. The management should organize for seminars and workshops where its top management employees can be trained on new insights on alliance management tools and strategies with a focus on leveraging differences with partners to create value. Organizations should form strategic alliance driven by the need to differentiate their products and services within one or a number of target market segments. Finally, the study recommends that the company’s management should initiate an appraisal of all the strategic alliances entered into with other firms