Abstract
There is a perception that the development of SMEs’ and their role as engines of socioeconomic growth in developing countries like Nigeria is being constrained by changes in international trading systems of goods and services. It is believed that SMEs’ competitive abilities are being restricted by the impact of international trade policy on liberalised markets.
This is a particular issue in the Nigerian textile industry were at its peak, and before the impact of liberal policies, the Nigerian textile industry was the third largest in Africa; it was the second largest employer of labour after the government, contributed immensely to the GDP of the country, and was an important source of revenue to the government. However, from the 1990s, the Nigerian textile industry started experiencing some challenges often linked to trade liberalisation policy under the General Agreement on Tariffs and Trade/World Trade Organisation (GATT/WTO). This placed SMEs’ textile fabric manufacturing firms under immense pressure to attain long-term sustainability while creating social and economic value in their operative environments as these challenges led to the loss of competitiveness, collaborative abilities in inter-organisational relationships, and closure of numerous SMEs’ textile fabric-manufacturing firms across the country. Given the potential impact of these challenges on SMEs’ competitive and collaborative abilities; this research examines what constitutes SMEs’ in the country’s textile industry, the issues they face as a result of trade policies; how these issues impact on their productivity and competitiveness; and finally, areas of collaborative partnership between SMEs’ and key inter-organisational stakeholders in the industry.
Literature around business relationship and value creation was examined, but found to be deficient because it failed to yield insight into the role of multiple actors such as stakeholders in SMEs’ inter-organisational relationship. Hence, the research drew on the theoretical foundation of creating shared value (CSV), which embodies the principles of business relationship, value creation and reflects the roles of multiple actors in inter-organisational relationships. In addition, CSV was adopted as the theoretical underpinning of this study because it aligns with the research objective. This approach also allies with the growing body of literature suggesting that SMEs’ survival and prosperity are reliant on their business networks and relationships in and out of their value chain in order to adapt and respond to competitive pressures from the global business environment and simultaneously create socioeconomic value. Given the shared value perspective of this research, the study was examined from multiple stakeholders’ perspectives in the Nigerian textile industry and informed by a qualitative mode of inquiry and case study research strategy. In-depth case studies were employed because it is useful in areas where little or no research has been done, as is the case of this research from a developing country’s perspective. Data was collected using semi-structured in-depth interviews.
In terms of the research questions, the findings from the first research question indicate that there is no shared consensus on what constitutes an SME in the Nigerian textile industry. In addition, the study found that the implementation of international and regional trade policies in Nigeria did not take into account the relevance of a shared value perspective. Thus, the absence of efficient, supportive and measurable policies such as; macroeconomic, trade-related infrastructure and institutional policies led to inconsistent banning and unbanning of textile fabrics, the influx of textiles, and high production cost in the Nigerian textile industry.
Findings from the second research question show that macroeconomic, trade-related infrastructure and institutional policy issues identified in research question one led to the loss of market share and textile manufacturing firms and massive unemployment. The outcome of which led to low patronage of locally manufactured fabrics and changes in buyer behaviour which had a huge impact on SMEs’ productivity and competitiveness in the Nigerian textile industry.
Findings from the third research question identified some elements of collaboration between SMEs’ and some inter-organisational stakeholders in areas of value co-creation with customers; collaboration between educational institutions and the industry in areas of innovation and knowledge transfer that previously existed; and areas of collaborative planning and outcomes between the government and practitioners in the Nigerian textile industry. However, these collaborative efforts have yielded little or no result due to the lack of shared understanding and values among key stakeholders in the industry. Hence, the central findings suggest that the lack of shared values between key inter-organisational stakeholders immensely contributed to current issues facing SMEs’ in the Nigerian textile industry. Based on these findings, the study reveals that it is difficult for firms to compete and operate efficiently in an unfavourable business environment. Therefore, SMEs’ operating in the Nigerian textile industry will have to engage in a collaborative relationship with key stakeholders in and out of the textile value chain in order to co-create shared value efficiently.