Inter-organisational relationships with large enterprises as a source of competitive advantage for small and medium enterprises

SMEs are recognised to have potential to be the engine for job creation and economic growth of nation. However, the prevailing intense competitive business environment driven by globalisation and rapid technological developments poses challenges and therefore realisation of their potential. Enterprises require technological know-how, financial resources, human resources and leadership capabilities to build their competitive advantage, thus being able to compete effectively. However SMEs have limitations with regard to resources and capabilities that are required to achieve a competitive advantage, a prerequisite to survive and be successful in the globalised economy. This study examined how the resources and capabilities that SMEs access through inter-organisational relationships with large enterprises influence their competitiveness. A sample of 309 SMEs that have supply relationships with large mining enterprises in South Africa was used to collect primary data. This study found that SMEs can access the resources and capabilities required for competitive advantage through supply relationships with large enterprises and these resources and capabilities are significant for their competitive advantage. Finance was however found not to be significant for competitive advantage.