Investigating the applicability of strategic alliances in Uganda's Construction Industry.

Abstract

Strategic alliances can be effective ways to rapidly enter a new market, to gain competitive advantage, improve performance and to learn quickly from the leading firms in a given field. In the construction industry, complexity and uncertainty have increased to the point that competing autonomously is no longer an option. Well established strategic alliances with viable organizational form and strategy of implementation provide direct and indirect benefits to the partners. However, strategic alliances are not simple or easy to create, develop, and support. There are many factors that hinder their applicability and formation despite the associated benefits. This paper provides an analysis of major issues and research questions involving the applicability of strategic alliances. The major issues discussed include the nature of existing strategic alliances in Uganda’s construction industry, the drivers to the formation of strategic alliances, the benefits associated with the use of strategic alliances, the challenges that have affected the formation and efficiency of strategic alliances in Uganda’s construction industry and proposes a framework needed to improve the applicability of strategic alliances. Generally, the research findings show construction firms engage in different types of strategic alliances due to the strategic motives for organizations to engage in alliance formation which vary according to firm-specific characteristics and the multiple environmental factors and these included gaining competitive advantage and market seeking among others. Although organizations form strategic alliances for diverse motives, and partners generally expect to benefit from their collaboration in form of sharing risks, increasing competitive advantage, improved productivity and greater consistency in delivery. Once organizations decide to form a strategic alliance, the partners face serious challenges of turning their good intentions into a viable enterprise at all levels, from routine activities to strategic policies. Therefore, strategic alliance partners should try to devote considerable time to plan thoroughly to achieve successful project alliance; quality understanding, communication between partners will help to dissolve mistrust and doubt.