INTERNAL AND EXTERNAL COLLABORATION STRATEGIES AND THE NONFINANCIAL PERFORMANCE OF SMES IN LAGOS STATE, NIGERIA

Authors

  • A. C. Iherobiem Department of Business Administration, Faculty of Administration and Management Sciences, Olabisi Onabanjo University, Ago-Iwoye, Ogun State Author
  • M. E. Ariyibi Department of Banking and Finance, Faculty of Administration and Management Sciences, Olabisi Onabanjo University, Ago-Iwoye, Ogun State Author
  • O. O. Adeyemi Department of Business Administration, Faculty of Administration and Management Sciences, Aletheia University, Ago-Iwoye, Ogun State Author

Keywords:

Collaboration Strategy, Customer Retention, External Collaboration Strategy,  Internal Collaboration Strategy, PLS-SEM

Abstract

In the modern-day scenario of fierce competition and dynamic nature of client demands
along with limitations in resources in businesses, cooperation has become a common
approach followed by many SMEs in order to improve the organizational efficiency. This
research paper tried to examine the relationship between internal and external cooperation
approaches and non-financial performance of SMEs in Lagos State, Nigeria in terms of the
level of employee satisfaction and involvement, client retention and loyalty, and quality of
services/products provided. In line with the theories of RBV and Stakeholder Theory, a
descriptive survey research design was used in the research. Data were collected from 645
owners/managers of SMEs registered in Lagos State, Nigeria through a multistage sampling
procedure from four different industries: manufacturing, real estate, agriculture, and
services, and this led to a response rate of 86.93%. Data analysis was done by using partial
least squares structural equation modeling (PLS-SEM) technique to test measurement and
structural models. In the structural model, significant correlation was found between internal
collaboration strategy and employee satisfaction and engagement (β = -0.666, p < 0.001), as
well as customer retention and loyalty (β = -0.649, p < 0.001). On the other hand, external
collaboration strategy had a significant correlation with quality of service/product (β =
0.608, p < 0.001), but not with employee satisfaction and engagement and customer retention
and loyalty. However, the study concludes that internal and external collaborative activities
are related to the different aspects of non-financial performance of SMEs and recommends
that SMEs need to develop their collaborative efforts especially in terms of external
stakeholder collaborations and internal information exchange processes while future studies
need to address the problem of measurement validity and use long-term design and objective
measures.

Published

2026-06-26

Issue

Vol. 4 No. 1(B) (2026)

Section

Articles