SUSTAINING NIGERIA FIRMS THROUGH STRATEGIC ALLIANCE IN THE BUSINESS ENVIRONMENT.

SUSTAINING NIGERIA FIRMS THROUGH STRATEGIC ALLIANCE IN THE BUSINESS ENVIRONMENT.

 

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ABSTRACT

It is no longer news to say that the world has become a global village. This transformation has been ensured by the immense advancements and breakthroughs achieved in the field of technology the world over. With this have come different phenomenal changes that have affected all spheres of human existence, more particularly the world of business. As a result, many aspects of business have changed and many are in the process of this transformation. Ultimately, these transformations have resulted in businesses operating in an environment that is totally beyond their control. Meaning? The . business entities have to fight for a place in the global market place – whether or not they are prepared to play in this market. This is the situation many Nigerian firms have found themselves in. but more to that, the nigeria firms operating in a ‘third world economy; have found themselves in an environment that has not very much encouraged their business operations. But they have to survive. They have to survive the harsh economic realities of the time; they have to run the business amidst the non-availability of the necessary facilities” and resources with which to support their operations. Thus the research aimed at showing the firms one sure way of amassing the resources they need and strengthening themselves to contain the charging competition. The study was carried out using both primary and secondary data.

The primary data was obtained using questionnaires which sought opinions from respondents from some selected firms in Lagos – the commercial hub of the nation, while the secondary data were obtained from textbooks, periodicals and web publications. Study sample was selected using the judgement and convenience non-probabilistic sampling techniques.

Data obtained from the questionnaires were further analyzed and the formulated hypotheses were tested using the Chi-Square method. From the information obtained from the study, it was discovered amongst other things that while many businesses outside the polity are already at home with strategic business relationships, The phenomenon has already gained widespread acceptance in more developed countries because of its advantage in helping the aligning firms garner more strength and position themselves to compete better in the market. And this is bearing in mind that the business atmosphere of these economies are not so different from that of Nigeria.

Very importantly, it-was noted that strategic^ alliances reshape competition. In view of these and more, it was suggested that both the government and management technocrats in_the__ country should work to encourage alliances amongst Nigerian firms through re­orientating our entrepreneurs, guiding aligning firms through the process and providing some form: of incentives to encourage aligning firms through the process and providing some form of incentive to encourage alignment such that the firms’ experiences and testimonies will encourage more firms to opt for the strategic alliance option.

 

 

 

CHAPTER ONE

 

1.1 INTRODUCTION

Events and experiences in the historic governance of the evolving Nigerian nation have invariably left scars in the mental consciousness of the average Nigerian that so affects his disposition to life. His hold on what belongs or appears to belong to him is vice-tight – and is often tainted with a dose of covetousness and a hunger for more. His hold on his business is a case in point.

Naturally, Nigerian entrepreneurs establish their businesses and sit atop it as executive management. Their sweat and struggle to set up the business, a fundamental distrust for the next man, and the desire to satisfy their ego, make it pretty difficult for them to engage the services of a management technocrat to run the business— more so, even now when these technocrats have craftily usurped some organizations. Therefore Nigerian entrepreneurs are unwilling to relinquish control of their firms and rarely welcome ideas / causes that will entail their having so to do. Therefore alliances are not very common practices amongst—-firms in Nigeria. But the scenario is changing and the trend is shifting.

 

 

 

Background of The Study

1.1.1 The Nigerian Entrepreneur

An entrepreneur is one who can assume the risk of pulling resources Together to turn an idea into a profitable business venture that can satisfy human needs. In as much as, ,not many Nigerian businessmen are entrepreneurs in terms of innovativeness,- certain characteristics, amongst others, cannot be taken away

  • Egoistic
  • Short-term profit orientation
  • Resilience
  • Profit-maximization orientation

These features describe the average Nigerian businessman, especially his short-term profit orientation. But understandably, circumstances prevalent in his operating environment contribute to this disposition. Certain conditions and facilities necessary for the smooth running of economic activities are unarguably unavailable, thus necessitating businesses taking drastic measures to stay afloat, including measures to ensure that the little facilities and conveniences available are not lost – and such measures include such a hold on the management and control of their organizations. The, typical Nigerian businessman will not give up control and management of his organization to anybody – the most he may do is to allow a relation (say wife, child, brother) to ran the organization – someone he can control from the background.

 

The reason for this is not far from the afore-listed factors of distrust, fear, the” quest to protect investment, to satisfy their egos. The Nigerian entrepreneur, deep down, does not .believe, that the next person will not want to take advantage of him and mismanage his money (and possibly sink his funds) in the name of his organization . this fear and distruct have contributed in no small measure to the almost non-existent alliances in Nigerian businesses. For many entrepreneurs, they have not taken time to understand the importance of joining forces with other firms to strengthen themselves and place themselves more strategically to contain the ‘charging’ competition in the market place. Rather, they have hitherto seen themselves as vitally in competition with every other firm especially if they are in the same industry.

 

This must have been the thought in the writer’s mind when he, Akingbola (2006: 14) asserted about the Nigerian business owners that:

“… they would rather own 100% of nothing, than 10% of a thriving entity “.

For this reason, many firms have continued to go round in circles, unable to rise

beyond their states of just breaking even , when they could have easily becomeblue chips by taking advantage of the strengths of their ‘opponents’ by forming alliances with them and expanding their spheres of influence and taking charge of their area. This is definitely not a healthy state for firms operating in the present global market place where the rules of the game, even in your own local market, is determined not by the local players, but by players from anywhere in the world who have the wherewithal to play whenever they please – a satiation that is beyond the control of local firms. And so Welch (1987) advised:

 

“Alliances are-a big part of this game (of global competition)… they are critical to win on a global basis. The least at…

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