Competence development in a strategic partnership: A case study of distributor-manufacturer alliance in emerging market

Abstract

This thesis was written to improve the understanding of how competence is developed in a strategic partnership relation, in terms of what are the operational and relational factors that either facilitate or hinder the development between a manufacturer and a distributor in emerging market context, from the distributor's perspective. The studied phenomenon was chosen due to the increasing trend to establish alliances with companies from emerging market because of to the high growth potential emerging market economies have at the moment. As knowledge has become a key competitive asset in business, it is needed to investigate how competencies are developed in an alliance relation when other partner organization operates under developing country premises.

To achieve the research objectives, an extensive literature review was conducted. A theoretical framework was developed based on three key theories: institutional theory, resource-based view and internalization model. The three theoretical frames were chosen because of their complementary nature between each theory on the researched phenomenon.

The study was conducted as a qualitative single case study, in which the case organization was a Finnish- based multinational corporation and the partner organization was a Nigerian distributor. The empiric research included semi-structured interviews conducted with the Nigerian distributor's employees. In addition, a minor online survey was utilized.

The findings suggest that the resource-based view is a suitable approach to study the phenomenon as knowledge was seen as the most valuable resource received from the manufacturer. The partnership enabled the company from developing country to access knowledge, which is not available within their own organization or country. However, in order to fully benefit of the partnership, provided resources such as competence development activities are required to be adjusted carefully for the other partner organization's needs. Consequently, a systematic evaluation of the distributor organization's competencies should be done on a regular basis. Moreover, the formal institutional environment is demanding in emerging market economies and the findings revealed that informal institutions are substituting the undeveloped formal institutions. Thus, systematic competence development is particularly crucial for partners from emerging economies.