Changing Use of External Business Advice and Government Supports by SMEs in the 1990s

Abstract

BENNETT R. J. and ROBSON P. J. A. (2003) Changing use of external business advice and government supports by SMEs in the 1990s, Reg. Studies 37 , 795-811. This paper uses cross-sectional surveys of 1991 and 1997, a panel survey of firms surviving between 1991 and 1997 and comparison with a further cross-sectional survey in 1999, to compare the levels of use by SMEs of external business advice. The resource-based theory of the firm indicates that SMEs seek advice in order to increase their competitive capacity. Over time, increasing competition between SMEs is expected to lead to increasing use of advice. However, the paper demonstrates that only modest changes over time have occurred in aggregate use of external advice by SMEs, and these are not statistically significant. This suggests that earlier growth in external business advice services may now have plateaued. There are some significant changes of use by source (increasing for advertising, personnel and recruitment, new technology and computer services; and decreasing for taxation and financial management advice). The paper is one of the first to assess sector patterns. Publishing, manufacturing and other business activities are the largest users of advice. Sector differences are shown to be considerable and need to be taken account in future analyses. For government advice services, the shift from a centralized and fragmented structure (Small Firms Service and Enterprise Initiative) to a decentralized and coordinated structure (Training and Enterprise Councils and Business Link) had no impact on greater market penetration except for the greater participation by the larger SMEs in use of Investors in People. Increased use of government sources has occurred, however, through enterprise agencies and regional development bodies. Further comparison of developments up to 1999 suggests a possible decline in use of advice as a whole, and a significant decline in use of Business Link. This indicates that the new bodies of the Small Business Service and the Learning and Skills Council may struggle to meet their market penetration targets. BENNETT R. J. et ROBSON P. J. A. (2003) La variation de l'acces des PME aux cabinets conseil en gestion externes et au soutien de l'Etat dans les annees 1990, Reg. Studies 37 , 795-811. Cet article emploie des enquetes transversales menees en 1991 et en 1997, une enquete a echantillon constant aupres des entreprises qui ont survecu entre 1991 et 1997, et une comparaison avec une autre enquete transversale menee en 1999, afin de comparer l'acces des PME aux cabinets conseil en gestion externes. La theorie de l'entreprise fondee sur la notion de ressources laisse supposer que les PME cherchent des conseils afin d'augmenter leur capacite competitive. Sur le temps, on s'attend a ce que la concurrence croissante entre les PME entraine un acces plus important aux conseils. Cependant, cet article demontre que, pour ce qui est de l'acces gobal des PME aux conseils externes, il ne s'est produit que des changements limites qui ne s'averent pa...

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“…There has, however, been considerable research exploring the impact of advisory networks on small and medium-sized enterprises (SMEs) as a whole. This research has found that SMEs make greater use of such advice than do large businesses (Forth et al 2006, p. x), with SME use of external advice on personnel and recruitment issues having more than doubled in the 1990s (Bennett and Robson 2003). This is perhaps unsurprising given the lack of HR expertise within such businesses and the extent to which external advice can reduce the search costs associated with finding solutions to employment-related problems.…”

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Use of Professional Accountants’ Advisory Services and its Impact on SME Performance in an Emerging Economy: A Resource-based View

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Factors Influencing Accounting Outsourcing Practices among SMEs in Pakistan Context: Transaction Cost Economics (TCE) and Resource-Based Views (RBV) Prospective

“…RBV describes the use of external services interrelates with the size and age of the company (Bennett & Robson, 2003). Empirical studies indicated that the use of external advisory services by SMEs is significantly positively related to the size and age of the firm (Dyer & Ross, 2008;Bennett & Robson, 1999).…”