Strategic Alliances and Performance of Firms in the Motor Vehicle Industry in Nairobi County

Abstract

The current study sought to establish the effects of strategic alliances on performance of firms in the motor vehicle industry in Nairobi County, Kenya. The study specifically focused on assessing how technological alliances, marketing alliances, production alliances and logistics alliances affect performance of firms in motor vehicle industry in Nairobi County. The study was anchored on Resource Dependency Theory, Transaction Cost Theory, Knowledge Management Theory and Organizational Learning Theory. The study adopted a descriptive research design and targeted 18 firms in the automobile industry and operating in Nairobi County. The unit of observation comprised of 315 employees from the selected motor vehicle firms and occupying managerial positions. The study employed Slovenes Sampling formula in deriving a sample size of 158 respondents. Primary data was collected through a 5-point Likert scale questionnaire and analysed through both inferential and descriptive statistics. The statistics were generated by the help of SPSS and Ms Excel. The results of the analysis were presented using tables. The study established that producttion alliances and logistics alliances positively and significantly affect performances of motor vehicle industry (Beta=0.410, sig=0.000<0.05 and beta 0.301, sig=0.001<0.05). The study further established that technological alliances and marketing alliances positively but insignificantly affect performance of motor vehicle industry ((Beta=0.128, sig=0.089>0.05 and beta 0.109, sig=0.126>0.05). The results imply that enhancing increasing each of the variables with their one unit results to performance increase of the motor vehicle industry with the respective beta values. The study recommended that for there to be an enhanced performance amongst motor vehicle industry players in Nairobi County, there is a need for the firms to engage in alliances that contributed to operational effectiveness in areas of technology, marketing, production and logistics. Keywords: Technological Alliances, Marketing Alliances, Production Alliances, Logistics Alliances and Performance of Motor Vehicle Firms