Definitions

Certain terms used throughout this site may have different meanings when presented in different contexts. It is therefore useful to provide a definition of certain key terms as intended by the proponents of PROPAT.

Business alliance

The terms alliance, business alliance, strategic alliance, partnership, collaboration, and cooperation are used interchangeably in this website to refer to “purposive strategic relationships between independent firms who share compatible goals, strive for mutual benefit, and acknowledge a high level of mutual interdependence” (Spekman and Mohr 1994). There are numerous other definitions emanating from the vast research on the subject which are equally valid in the context of this study. These include:

"Voluntary arrangements between firms involving exchange, sharing, or co-development of products, technologies, or services. They can occur as a result of a wide range of motives and goals, take a variety of forms, and occur across vertical and horizontal boundaries." (Gulati 1998)

"A formal agreement between two or more business organisations to pursue a set of private and common interests through the sharing of resources in contexts involving uncertainty over outcomes." (de la Torre 2001)

"Coordinated behaviour between agents, the advantages of which will not manifest themselves until some point in the future, depending on the (uncertain) behaviour of the other agent.”  (Roessl 2005)

“A close, collaborative relationship between two or more firms with the intent of accomplishing mutually compatible goals that would be difficult for each to accomplish alone” (Spekman, Isabella and MacAvoy 2000).

Entrepreneur

‘Entrepreneur’ is used interchangeably with ‘manager’, ‘owner’, ‘owner-manager’ and ‘business-owner’ in this study to refer to the individual who is directly involved in strategic decision making and has the authority to enter the business into a strategic alliance.

Characteristics of the entrepreneur

The terms characteristics of the entrepreneur, personal characteristics or individual characteristics refer to personal attributes and includes those attitudes, traits, perceptions and behaviours which may affect the entrepreneur’s readiness to enter into successful business alliances. As an example, such characteristics, which are identified and examined in the leading to PROPAT, include the capacity to learn, trust, commitment, the ability to coordinate and communicate, the willingness to take risks, patience, and comfort with interdependence.

Small and medium-sized enterprises (SMEs)

In this website small enterprises are business entities employing between 10 and 49 people, whereas medium enterprises are firms employing between 50 and 249 persons. Businesses employing less than ten persons are termed ‘micro-enterprises’ while those with a staff complement of 250 and above are considered as large.

Family business

Despite the overwhelming volume of research on family businesses it appears that there is still no single generally-accepted definition of a family business (Sharma 2004).

Roessl (2005) views the family business as a firm in which ownership risk and decision making power is held by members of the same family, and on which several family members are financially dependent. The author identifies three criteria which differentiate family businesses from other firms, namely: (1) several family members (not necessarily within the same immediate family) hold share capital in the business; (2) the majority of capital and decision-making power is held by one or more family members; (3) several family members are financially dependent on the business because the business generates most of their income.

This definition was considered suitable for the purpose of the research underlying PROPAT and is the one which has been adopted.