Challenges Fostering Unwillingness to Form Strategic Alliances among Medium-Sized Manufacturing Firms in Tanzania

Abstract

For many years, strategic alliances have attracted the attention of researchers. The most researched area is the challenges facing the development and maintenance of strategic alliances. Most studies on alliance challenges have concentrated on strategic alliances among large firms in developed economies. Little research has been done on the link between these challenges and firms’ unwillingness to form strategic alliances. We therefore want to find whether the unwillingness to form strategic alliances among Medium-Sized Enterprises (MEs) from the manufacturing industry in least developed economies like Tanzania are fostered by the prevailing challenges facing strategic alliances. This study examines the views of manufacturing MEs on whether the challenges associated with developing and maintaining strategic alliances discourage them to form strategic alliances. We have adopted both cross-sectional survey design and multistage probability sampling technique to allow the participation of 398 out of 485 CEOs from three zones of Tanzania through questionnaires. A multiple regression analysis reveals the influence of the challenges associated with both cultural incompatibility and risks on firms’ unwillingness to form strategic alliances. We recommend that manufacturing MEs in Tanzania must design an effective plan on how to mitigate these challenges before partner selection process begins instead of becoming reluctant to strategic alliance formation due to prevailing challenges.