Realizing knowledge sharing in strategic alliance: case in Islamic microfinance

Abstract

Purpose – The purpose of this paper is to understand the influence of social capital, trust and commitment in fusing the various elements in a strategic alliance through the knowledge-sharing process. The unit of analysis is the relationship between Islamic banks and baitul maal wa tamwil (BMT), where each carries with it a back-ground of differing institutional culture and management style. The theory regarding knowledge sharing and interdependence will be developed in the model and tested with structural equation modelling (SEM) to evaluate the direct and indirect effects of the connection between relationship bonding (social capital) and trust and commitment in a formed alliance. Design/methodology/approach – In this study, we have used a confirmatory approach through survey using a structured questionnaire distributed to 131 BMT throughout the region of Central Java and Yogyakarta. The sampling criteria used are: has operated for a minimum of two years and does not experience any financial problems in those two years; has been in a financing contract with an Islamic bank; has channelled a part of their funds to micro, small and medium enterprises; and is in the form of a cooperative and not micro financial institution. The data treatment used is list-wise deletion. From the initial sample, 89 BMT were found that fulfilled the sampling criteria. Data are analyzed using SEM with linear structural relations (LISREL) software version 8.80. To validate the data analysis result, we have also run a focus group discussion (FGD) with the Directorate of Islamic Banking – Bank Indonesia, as well as in-depth interview (IDI) with the BMT parent cluster (Inkopsyah). Findings – Empirically, conflict, coordination and trust are a positive and significant contributor in the success of transfer of knowledge. A strategic alliance relationship between Islamic banks and BMT is still contractual in character, where trust is tied down by a contractual agreement. Other than that, trust and transfer of knowledge is significantly influenced positively by the building of coordination, agreement, interdependence and social capital. Originality/value – The unit of analysis is the relationship between Islamic banks and BMT, where each carries with it a background of differing institutional culture and management style. The theory regarding knowledge sharing and interdependence will be developed in the model and tested with SEM to evaluate the direct and indirect effects of the connection between relationship bonding (social capital) and trust and commitment in a formed alliance.

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