Successful Partnerships in Emerging Markets: The Moderating Role of Operational Performance

Abstract

Purpose – With the reported high failure rate among Small and Medium-sized Enterprises (SMEs) in the professional service sector of emerging markets, coalescing their resources via strategic partnerships to effectively compete in the market place is seen as crucial to their growth and survival. This paper investigates the impact of attributes of partnership, communication behaviour and collaborative conflict resolution on partnership success among Professional Service Firms (PSFs) in emerging markets. It further contributes to the body of knowledge by exploring the moderating role of operational performance in the hypothesised relationships. Design/methodology/approach – Relying on a positivistic paradigm, 300 small and medium-sized PSFs were surveyed, yielding a 79% response rate. Descriptive statistics, hierarchical regression and exploratory factor analysis were used to analyse the collected data. Findings – A positive significant relationship was found between two of the three dimensions of attributes of partnership (commitment and coordination) and the success of partnerships. Despite their importance for partnerships, trust and information sharing negatively impacted partnership success in this study. A positive significant impact was however realised for trust and information sharing when operational performance moderated the relationship. Practical implications – PSFs must develop innovative and workable tools to effectively monitor their operational performance given its significant influence on the relationship between attributes of partnership, communication behaviour and partnership success. Social and cultural competence training is needed for staff to improve the relationship bond, trust and collective goals of partnerships. Originality/value – This paper introduces operational performance as a moderating variable to investigate the hypothesised relationships. It offers insights into how PSFs can manage the pertinent issues critical to the effective management of partnerships in emerging markets.