Small and medium sized businesses (SMEs), and family firms

Research shows that SMEs and family-owned businesses are less likely to partner

The motives for strategic alliances are of particular relevance to Small and Medium Sized Enterprises (SMEs). Characterised by limited resources and restricted market access, SMEs are even more vulnerable to the effects of globalisation and rapid technological change. Faced with the need to overcome resource shortage, penetrate new markets, and increase their viability in difficult times, SMEs seem to be well positioned to benefit from the alliance option.

Studies show that SMEs propensity to form alliances is less than that of large companies and that SMEs do not fully utilise alliances to improve their competitive position (Haagedorn and Schakenraad 1994; Hoffman and Schlosser 2001).

Research also suggests that family businesses, which typically represent a large number of SMEs, tend to be less willing to enter into cooperation arrangements as many characteristics of family businesses have a hindering effect on cooperation (Roessl 2005).

See definition of small and medium-sized enterprises (SMEs), and definition of family businesses.