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International Small Business Journal
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Business Advisers' Impact on SMEs

An Agency Theory Approach

Kevin Mole

Warwick Business School, University of Warwick

The broad focus of this article concerns the UK Business Link policy to target business advice to small and medium-sized firms. This policy, which operated between 1993-9, encouraged Business Link to provide advice to firms with the potential to grow. The article considers the targeted policy from the perspective of the Business Link personal business adviser (PBA). Overall, from a principal-agent perspective, the article examines the incentives and relationships between various business advisers and their SME (small to medium-sized enterprise) clients to explain the impact of business advice. The article draws on a qualitative-quantitative study of business advice conducted by the author. Twenty-nine business advisers participated in individual semi-structured interviews and a focus group of ten public sector business advisers provided the qualitative element of the research. A survey of 175 Business Link personal business advisers (PBAs) provided the quantitative element to the research. The article suggests that Business Link PBAs' advice is likely to impact less on SMEs than that of accountants and solicitors simply because of the basis of their relationship.

Key Words: agency theory • business advice • business advisers • business links • business relationships

International Small Business Journal, Vol. 20, No. 2, 139-162 (2002)
DOI: 10.1177/0266242602202002
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L. M. Dyer and C. A. Ross
Advising the Small Business Client
International Small Business Journal, April 1, 2007; 25(2): 130 - 151.
[Abstract] [PDF]