Sme Cooperation: An Analysis Of Five Barriers To Smes

Globalization occasioned by technological breakthroughs has increasingly stimulated SMEs corporations, which is defined as synergetic relationships between or among independent entities with the purpose of creating a value. SMEs corporations has been seen as one of the strategies to expand and develop a wider range of products, managerial skills, proprietary technologies and other market interests, even across transnational borders (Grant, & Baden-Fuller, 2004). By cooperating with other firms, SMEs firms increases confidence to enhance innovativeness, image and credit rating. Similarly, the resultant SMEs are likely to spread business risks, gain access to new technology, gain tacit knowledge, create economies of scale, save cost and achieve

They are those elements that inhibiting the achievement of the primary purpose of cooperation. According to (Todeva & Knok, 2005) there are many barriers to SMEs cooperation. The chief ones are lack of trust, conflict of interest and inadequate resources.

Conflict of interest: These occur when management styles, values and attitude of the SMEs operators that intend to involve in cooperation or have involved in cooperation mismatch. Todeva and Knok (2005) noted that when one party involved in cooperation have short term orientations and the other have long term orientations, the cooperation’s may never materialized. The purpose of cooperation’s are usually defeated when both parties have a different styles and values.

Fall in Trust: This is the expectation that an actor’s involve in cooperation can be relied on to fulfil obligations. However, low trust may result in withholding information, desiring to win conflicts, relying on past history for decision‐making, maintaining the status quo and resisting change and valuing independence, all which are also barriers to SMEs effective collaborations and