An enterprise cost management conceptual model for strategic alliances - a case of Zambia of the telecommunications sector

Abstract

The evolution of strategic alliances in the recent past has been a perennial phenomenon congruent with shifts in the contemporary international business environment, where inter-firm collaboration approach is a new paradigm for strategy managers. Despite the growing popularity of strategic alliances, collaborative success remains elusive for many companies with instances of premature failure attributed to poor cost management approaches, among other contributing factors. Therefore, the primary purpose of this study was to develop an enterprise cost management conceptual model that practitioners could apply in managing costs in strategic alliances to improve corporate performance, thereby improving the alliance success. The study adopted a positivist and interpretivist research philosophy with a concurrent embedded strategy of mixed-method design with evidence drawn from the eight telecoms companies in Zambia. The primary data collected was qualitative and quantitative through interviews and questionnaires. The research questions were successfully answered and propositions proved/disproven in the study with results modelled into the Enterprise Cost Management (ECM) conceptual model.The study found that the specific main standard activities that give rise to costs were life cycles and costs drivers in strategic alliances. The focus on processes, system and decisions of capturing costs in strategic alliances determine how costs should be measured. Further, success and risk factors must be determined through strategic alliances' benefits and performance metrics to operationalise the conceptual model. The study’s theoretical and practical contribution to the corpus of knowledge is broad and immense in scope by proposing an enterprise cost management conceptual model. The study makes recommendations for valuable insights for alliance managers in implementing value-creating strategies in dynamic competitive environments and improve cost management approaches thereby increasing the chance of strategic alliances success. The conceptual model can be converted into a useful software program to assist managers in effectively managing costs and be utilized as a due diligence checklist to conclude partnership agreements. This study focused on strategic alliances partnership and excluded other partnerships such as joint ventures. Future investigations into cost approaches in joint ventures could be explored.