Investigating the role of trust in the formation and implementation of strategic alliances between local SMEs and multinational companies in Africa: a study of two cases from Ghana

The aim of this study is to investigate the role of trust in the formation and implementation of strategic alliances between Local SMEs and MNCs in African countries using two case studies from Ghana. Using a case study method, the analysis of qualitative data was used to establish whether trust is a key factor in the success and failure of a strategic alliance, and to determine the level of its effects on the formation stages and the implementation process of an alliance. It also investigated the extent to which trust established at the senior management level has the same effect of that of employees at different levels within the alliance. It was found that: 1) trust can be built and lost at different stages of the alliance; 2) it can be the cause and the outcome of a successful partnership depending on the terms and conditions of the alliance and the compatibility of the partners; and that 3) alliance between local firms and foreign organizations is impacted to a great extent by the cultural differences. This study will help managers appreciate the importance of trust in all stages of an alliance formation and implementation and make informed decisions. Policy makers and government officials will also benefit from this study because it will help them understand the reasons for having failed and successful alliances, and produce legislation that guides the formation of successful alliances.