Effects of interfirm co-operation on performance of small and medium scale enterprises in Dormaa Central Municipality, Ghana

Abstract

Interfirm co-operation among organisations has become increasingly vital in modern business environments graced with immense unhealthy competitions. The study examines interfirm co-operation and performance of Small and medium-sized Enterprises in the Dormaa Municipality of Ghana. This quantitative study was underpinned by the network theory of social capital. The study employed the explanatory research design due to its research objectives. Out of a target population of 216 Small and Medium-sized Enterprises in the municipality, 140 of them were randomly sampled, using the Krejcie and Morgan (1970) sampling determination table. Questionnaires were then administered to owner/managers of these Small and Medium-sized Enterprises and obtained a response rate of 100 percent. Data obtained were processed, using Statistical Package for Service Solution version 22 and analysed, using both descriptive and inferential statistical tools such as frequencies, percentages, means, relative important index and multinomial logistics regression. The study found that some forms/types of Interfirm co-operation strategies included cluster, joint venture and networking. Also, interfirm co-operation was found to have a positive impact on firm performance such as improved sales margin and profit level. The study concluded that Small and Medium-sized Enterprises that continuously collaborate with other firms within or outside their geographical areas are able to enhance their overall performances. The study, therefore, recommended that, Small and Medium-sized Enterprises within the Dormaa Municipality should continuously integrate with other firms through clustering, networking and joint venturing to enhance their performance levels.