Business Advice

Abstract

This chapter frames the transfer of advice as a special case of traditional cooperative decision making, in which group members proffer preferences (advice) to one another as a means of reaching consensus. Although the transfer of advice differs from group decision making on a number of acknowledged factors, the underlying processes of the two are analogous, such that the group decision-making literature can usefully inform the study of advice. Using this theoretical perspective, the chapter examines how advice is offered and accepted as a function of demonstrability—that is, the degree to which a decision environment facilitates shared conceptual systems, the willingness and ability to include the input of others in one’s decision making, and the willingness and ability of those with expertise to attempt to transfer their knowledge to others. This understanding is then applied to two cases: the craft beer industry and travel hacking. Best practices in business are discussed.

From adversity to advice: Survival threats as a trigger for sustained engagement with external business support in small firms

“…Experiencing a crisis can arguably be a powerful motivator for a firm to seek external business advice. A dynamic environment, such as that experienced during a crisis, is characterised by uncertainty, complexity and discontinuous change and has been positively associated with external advice seeking in business leaders as they engage with the non-routine decision-making required (Heyden et al, 2013; Bonner et al, 2018). Uncertainty may also provoke external advice seeking because it obstructs the attainment of goals (Lim et al, 2019).…”

“…While some studies question the link between advice seeking and positive business outcomes (Coad et al, 2016;Mole and Capelleras, 2017), others point to a range of benefits for SMEs who seek external advice and support (Cole and Fernando, 2021;McKenzie, 2021). Advisory services can contribute to a firm's knowledge, reduce business risks and improve strategy decisions (Mole et al, 2009(Mole et al, , 2011 and can offer support and reassurance for business leaders dealing with complex and multi-dimensional issues (Bonner et al, 2018). In SMEs, where external support is particularly relevant given their limited internal knowledge and resources (Johnson et al, 2007), the use of external business advice has been associated with higher sales growth, innovation, finance and alliance participation (Cumming and Fischer, 2012).…”