Do Small and Medium-Sized IT Firms Form Service Partnerships with Non-Local IT Firms? An Assessment of Facilitators

Abstract

For small- and medium-sized IT firms, the service partnerships formed with other IT firms are strategic instruments to overcome their resource constraints, increase efficiency and offer complementary services to their customers. Although these firms have a tendency to form local partnerships due to ease of trust building, few of them are engaged in non-local partnerships. This research aims to explore the facilitators of this divergent firm behavior. The findings suggest that a firm’s alliance capabilities and organizational proximities between distant partners can substitute the lack of geographical proximity and enable IT SMEs' engagement in non-local service partnerships. More importantly, the type of IT service rendered through the partnership acts as a moderator and determines the extent of the organizational capabilities and proximities.

Keywords: Small-and-Medium-Sized Enterprises (SMEs), Information Technology Firms, Inter-organizational Partnerships