The role of subcontracting on innovation: an assessment of small and medium enterprises in Nigeria

Abstract

This paper investigated the influence of subcontracting on innovation and its impact on the performance of small and medium enterprises (SMEs) in Onitsha, Nigeria. The paper adopted a number of methods comprising of field observations, reference to relevant literature, and a questionnaire survey of 113 SMEs. Regression, mean and standard deviation were used to analyse the data. In line with the literature, this paper identified seven (7) dimensions of subcontracting assistance from large scale industries to small business firms. The paper found that subcontracting relationship between large scale industries and SMEs is inclined to production and product-related cooperation where the contractors are concerned with meeting fluctuation in demand and shortening long delivery times. This paper concluded by suggesting that subcontracting relationship between SMEs and large scale industries should not be restricted to production, purchase, finance and marketing assistance. It should also be extended to human resource development and organisational-know-how. ARTICLE HISTORY

Strategic Choices and Organizational Challenges in Times of Crisis: Illustration of the Experience of Two Moroccan SMEs

“…Nowadays, to be successful, companies must acquire and create new knowledge, disseminate it inside and quickly incorporate it into new technology and products, as to continuously develop innovations (Martínez-Costa et al, 2019). Innovation opportunities are strategic components through the combination of know-how between the contractor and the subcontractors which are considered as suppliers with innovation and absorptive capacities (Nwokocha et al, 2019).…”

Recommending blue ocean technologies for subcontractors: A framework based on business reports of prime contractors and patents

“…However, subcontractors like SMEs have a better chance to try radical innovation than their prime contractors, and the technological development of the subcontractors helps their prime contractors expanding their technologies as well. Therefore, subcontractors have become key factors of technological business and should build up their technical capabilities and prepare for both their own and their prime contractors’ future businesses through technological innovation [ 13 , 14 ].…”

“…This study provides a framework, as shown in Fig 1 , for subcontractors to identify advanced technologies by considering not only their technological capabilities and market competition, but also the new technological areas that their prime contractors are seeking to develop. As subcontractors are highly dependent on their prime contractors [ 13 , 16 , 18 ], it would be risky for them to set the direction of new technologies to be developed on their own. Since our approach satisfies the stakeholders’ innovation needs, it would enable subcontractors to reduce the uncertainty of investment costs and make significant contributions to their supply chain [ 25 ].…”

The after-sales strategy of an industrial equipment manufacturer: evaluation and control

“…Sometimes, intermediary agents, that is, companies that have specific abilities related to the equipment, provide the AS package, which reduces the transaction cost of the service, as these companies can provide services for more than one machine supplier (Legnani et al, 2009;Cavalieri et al, 2007;Saccani et al, 2006;Kurata and Nam, 2013). In this case, the main contractor (the machine supplier) requests the service of a subcontractor (the independent agent) to undertake the execution of the services (Nwokocha et al, 2019). Eventually, the agent may even assume the manufacture of parts or subassemblies necessary for installation as well as to gain access to key technologies provided by the main contractor (Nwokocha and Madu, 2015).…”