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Accountants as Sources of BusinessAdvice for Small Firms

PAUL N . GOODE RH AMNorwegian School of Economics and Business Administration (NHH), Norway

AN ITA TOB IASSE N , E R IK D VIN GInstitute for Research in Economics and Business Administration, Norway

O D D N O R D H A U GNorwegian School of Economics and Business Administration (NHH), Norway

In many countries small business accountants play an important role asbusiness advisers for small firms in addition to providing basic accountingservices. However, while some small firms make extensive use of externalaccountants as business advisers, a substantial proportion uses them only to

a minor degree. On the basis of small firms in Norway the aim of this articleis to contribute to our understanding of the determinants of such variations.Our study reveals that the quality, rather than the longevity, of therelationship between firm and authorized accountant is an importantantecedent of the degree to which small firms use accountants as businessadvisers. In addition, the study indicates that the competency orientation offirms also functions as an important determinant.

KEYWO RDS: accountants; business advisory services; small firms

Introduction

In a number of countries accountants who have small firms as their client basehave been developing services over and above traditional accountancy services.As such they have increasingly depicted themselves as multidisciplinary prac-tices, one-stop shops for an extensive array of services, including financialadvisory, management consulting, and legal services (Greenwood et al., 2002:58). In the case of Norway, which constitutes the setting for this study, NARF(Norges Autoriserte Regnskapsfreres Forening [The Norwegian Association ofAuthorized Accountants]), the main professional association for accountants

with a small firm focus, has for the past five years been actively encouraging itsmembership to regard itself as business advisers. The main task of this article is

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International Small Business JournalCopyright 2004SAGE Publications (London,

Thousand Oaks and New Delhi)DOI: 10.1177/0266242604039478

Vol 22(1): 522www.sagepublications.com

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to extend our knowledge of the characteristics of those small firms who usebusiness advisory services stemming from accountants.

To date little is known about which factors are important for small firms inmaking use of accountants as sources of business advice. On a general level what

is known is that the smaller the firm the less likely it is that external advice willbe sought (Bennett and Robson, 1999) and that it would be naive to assume thatmost owner-managers of small firms are particularly driven by a need to improvetheir skills bases (Stanworth and Gray, 1992). Chell and Baines (2000) studyindicates that it is entrepreneurs in the sense of individuals who are driven by aneed to create wealth and accumulate capital who are the most likely to useexternal sources of advice. But according to Chell and Baines these are aminority. For many small firm owners, autonomy and independence are moreimportant than growth (Low and Macmillan, 1988). The implication of researchinto public authority sponsored consultancy services to small firms (see for

example Kvitastein, 1997; Wilks, 2000) is that acting as a business adviser, in thesense of motivating small firms to adopt and integrate key competencies, is acomplex process that requires a high degree of relational competence.

In the first part of this article we first briefly discuss the most salient featuresof the Norwegian context. We then delineate the difficulties small firms face inobtaining critical competencies for business development. Thereafter we outlinethe conditions that have contributed to making the authorized accountant inNorway a significant source of business advisory services for small firms. In thefinal phase we derive three propositions regarding the likelihood of the small firmusing its accountant as a business adviser, which are then empirically tested.

Backdrop

The subject matter of this article is small firms in Norway. In Norway small firmsare defined as having 119 employees (Spilling, 2000). About 95 percent ofNorwegian firms occupy this category, and among these, about 80 percent aremicro-firms in that they have fewer than 5 employees. Our study analyzes varia-tions in the use these firms perceive they make of authorized accountants asbusiness advisers, that is to say services that exclude basic or statutory financialaccounting services.

In order to meet statutory requirements regulated by Norwegian law, firms areobliged to produce annual financial accounts. Rather than doing this in-housetwo-thirds of all small firms in Norway employ the services of an external author-ized accountant for this purpose (Dagens Nringsliv, 2003). It should be notedthat in Norway all persons that offer accounting services to others have to beauthorized in accordance with Norwegian law. A prerequisite for authorizationis a minimum of two years of higher education within economics and businessadministration, as well as two years relevant practice. There are approximately4000 authorized accountants in Norway serving in excess of 200,000, mostly small,firms. They typically work in practices of five or fewer associates.

International Small Business Journal 22(1)

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Competence as a Strategic Resource

Business advisory services encapsulate a range of competencies that are criticalnot only for survival, but also for competitive advantage. Teece et al. (1997: 516)have argued that sustainable competitive advantage is dependent on the firmsability to integrate, build and reconfigure internal and external competencies toaddress rapidly changing environments. In general terms critical competenciesnecessary for competitive advantage, or at least competitive parity, must eitherbe developed internally and/or they must be accessed through the agency ofconsultancies engaged in the transfer of best practices across firms.

For small firms both of these are problematic (Langley and Traux, 1994). Theuncertainty under which they operate combined with their lack of resourcesmakes research and development problematic (Chell and Baines, 2000; Marshallet al., 1995; Nordhaug and Gooderham, 1996; Wynarczyk et al., 1993). Thismeans that small firms have a particular need to obtain business advice from

external sources (Birley and Westhead, 1992; Storey, 1994). However, in regardto availing themselves of mainstream consultancies, small firms, because of theirrelative lack of purchasing power, are viewed as unattractive clients. In a Nor-wegian survey 75 percent of the countrys established consultancies reported thatthey either had no or only sporadic contact with small or medium-sized firms(Jevnaker, 1996).

The significance of being able to access critical competencies was confirmed ina survey of a large sample of mostly small Norwegian firms (Nordhaug andGooderham, 1996). About 8 out of 10 firms in the sample ranked the competen-cies of their management and employees as crucial to the firm. In contrast the

resources that traditionally have been viewed as critical, such as financialresources, technology, machines and equipment, were generally regarded to beof relatively less importance for value creation. The study indicated that firmsemphasis on competence development stems from a need to improve and sustainintangible factors such as the quality focus of the firm and the quality of customerrelations (Nordhaug and Gooderham, 1996).

Research in the UK indicates that a majority of small firm owner-managershave no professional, management or other formal qualifications (Stanworth andGray, 1992). Given that the competence these qualifications represent is critical,this constitutes a problem for the growth and survival of the small firm. In

addition, many of the owner-managers of small firms lack financial skills andknowledge of how financial control systems might be used to aid decision-making(Deakins et al., 2001). It is reasonable to suppose that the situation is similar forsmall firms in Norway. One possible way for a small firm to acquire competen-cies is to employ qualified persons. However, smaller firms often have difficultiesin obtaining competent persons because of their inability to offer competitivesalaries and benefits (Jennings and Beaver, 1997). Consequently, they areparticularly dependent on being able to access their environment for businessadvice.

Gooderham et al.: Accountants as Sources of Advice

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Competencies and Learning in Small Firms

Jennings and Beaver (1997) maintain that small firm owner-managers requirespecific, transferable, managerial skills directly related to entrepreneurship andprofessional management within the operating environment of the business.According to Gibb (1997) a small firms learning will be located in the context ofthe external relationships of the firm, and in the context of sharing and develop-ing the collective and individual knowledge in the company. If we consider theexternal context, there are many possible business relationships small firms maylearn from: for example, customers, suppliers, lawyers, associations, authorities,bankers and accountants (Bennett and Robson, 1999; Curran et al., 1993; Gibb,1997).

Which supplier of business advisory services an owner-manager relies on whenit comes to advice is to a large extent dependent on the relationship of trustbetween the supplier of advice and the owner-manager (Bennett and Robson,

1999). This is particularly due to the fact that advice is a specific kind of businessservice that involves a largely intangible product. The process of production ofadvice is often an exchange process involving learning on both sides (OFarrelland Moffat, 1995). As a consequence, the quality of the personal relationship iscritical in these exchanges (Bennett and Robson, 1999). As we will discuss laterin this article, this quality of the personal relationship between Norwegianauthorized accountants and the owner-manager of small firms is potentiallygreater than that which can be achieved by consultants.

Public Policy and Small Firms

Due to the recognition of the importance of small firms to developed economies(Gallagher et al., 1990; Mitchell and Reid, 2000), public authorities in Norwayand other European countries have introduced a series of initiatives to improvetheir competence and business performance. Throughout the last decade a keyaim of the Norwegian authorities has been to stimulate small firms to invest incompetence resources. Core measures have involved ambitious businessdevelopment programmes under the management of the Regional DevelopmentAgency (SND) and The Institute for Applied Technology (TI). It has been

shown, however, that these programmes have had a negligible impact on thefirms that have been involved (Kvitastein, 1997). In addition, it has been shownthat public suppliers of business advice and training are among the least used bysmall firms in Norway for competence and technological development transfer(Nordhaug and Gooderham, 1996; NHO [Nringslivets Hovedorganisasjon(Confederation of Norwegian Business and Industry)], 1994). These outcomesare not unique to Norway. In the UK a majority of small firms are dissatisfiedwith government support services (Wilks, 2000). A survey carried out by theUniversity of Strathclyde concludes that government services intended to helpbusinesses fail to do so. Bennett and Robsons (1999) study indicates similar

outcomes: government support agencies have significantly less impact on smallfirm clients than private-sector consultants and business associations.


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There appears to be a number of reasons for these discouraging results. In theNorwegian case there is clear evidence that a substantial part of the problem isgetting the advice from SND and TI consultants integrated into the businessesthey are trying to serve. This is primarily due to a lack of insight into the idio-

syncratic cultures of their clients. Owner-managers of small businesses typicallyadhere to a self-employed or micro-firm culture of individualism (Gray, 1995cited in Chell and Baines, 2000), which contrasts to the culture of state fundedconsultants. A second problem is that the consultants employed by SND and TIoffer services that often assume order, standardization, accountability, control,systems and planning rather than the skills needed to thrive in the chaos inwhich small firms have to cope (Gibb, 1997). Accordingly, we will argue thatother value creation agents must be identified for the small firm sector. Of thepossible value creation business relationships external to small firms, we willfocus on the role of the authorized accountant.

The Role of the Accountant

Small accountancy practices as exemplified by Norwegian authorized accoun-tants are of significance as small firm business advisers for a number of reasons.First, as we have noted, unlike consultancies, their clients are primarily derivedfrom the small business sector. Second, small firms are willing to pay more forbusiness advisory services than standard accountancy services, so that authorizedaccountants have an incentive to develop such services (Gooderham andNordhaug, 2000). Third, because of the longevity of their client relationships

(Marriot and Marriot, 2000; Nordhaug, 2000) there is a potential to developrelational competence in respect to their clients characterized by intimacy andtrust (Gooderham and Nordhaug, 2000). In many instances, the small firm clientregards its authorized accountant as an integral part of the business. Fourth,another source of trust lies in the fact that accountants have, together with banksand solicitors, to work within a strong self-regulatory framework that generateshigh institutional trust among clients (Bennett and Robson, 1999). As we haveindicated, in Norway accountants can only practice if they are in receipt ofauthorization from the State. The purpose behind this authorization is to ensurethat the work of the accountant is executed in an adequate manner in accordance

with prevailing laws and regulations.In general research conducted in the UK supports the notion that accountantsplay a particularly important role for small firms, although the findings aresomewhat diffuse in regard to the precise nature of the role they play as businessadvisers. Kirby and King (1997) found that for small firms accountants are amongthe most frequently used external sources of advice. The factors that appearedto be most important for the use of the accountant for non-statutory work (non-auditing and taxation) were the relationship established through statutory workfollowed by perceived value for money and previous advisory work undertakenby the accountant. However, it should be noted that neither factor was decisive

for half of the firms in the sample.Similarly Bennett and Robson (1999) found that although most small firms


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used several different sources of advice, specialist professionals are the mostfrequent source of external advice for small firms. Of these, accountants are themost used (compared to banks and solicitors). In addition, accountants are,together with customers, ranked as those external sources of advice that have

greatest impact.Marriot and Marriot (2000) conclude in their study that there appears to be

significant potential for professional accountants to expand the managementaccounting services they provide to smaller companies. They conclude thataccountants have a role to play in increasing the financial awareness of the owner-mangers and can provide a management accounting service to meet their needsand abilities. The current demand for the accountants reporting services isdriven by regulatory requirements, but it is possible to extend these servicesbeyond these.

Deakins et al.s (2001) study of small businesses also indicates that an import-

ant task for an accountant is to act as a consultant to the manager (invariably theowner). The tasks involved supplying advice on internal planning, decision-making and control, that is, in areas where an owner-manager of a small firmoften lacks competence, as discussed previously. Accountants were shown to beof significant help to the manager-owner in running the firm particularly when itcame to the introduction and implementation of changes. Such a role was alsoshown to be of critical importance in the early phase of the business. The contactbetween the accountant and the manager-owner was especially significant for thelearning processes that occur in the business.

While the above findings are generally positive about the accountant as a small

business adviser, they should be tempered by Greene et al.s study (1998) fromthe North of England that indicates that small business owner-managers see littleneed for external support and advice. When they do seek advice this is becausethe advice is viewed as necessary in meeting requirements set by the law ratherthan because it adds value to the business. In these situations it is, however,generally the accountant who is the source of advice, once again suggesting thataccountants are primary sources of business advice.

Propositions

Proposition 1The research we have reviewed suggests that the relational competence accoun-tants are able to develop is an important factor in explaining their use as businessadvisers by small firms. In addressing variations in their use by small firms wepropose therefore that:

The stronger the relationship between the small firm and its accountant, the more likelyit is that the accountant will be used as a business adviser.

As it is reasonable to suppose that relationships are developed over time wepropose that: (1a) small firms with long-term relationships to their accountant

are more likely to use their accountant as a business adviser.We propose further that the use of accountants as business advisers will be


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affected by the perception of the accountants competencies that has been devel-oped by the firm. In other words: (1b) the more competent the accountant isperceived to be in respect to the delivery of statutory services the more likely it isthat the small firm will use the accountant as a business adviser, and (1c) the more

competent the accountant is perceived to be in respect to non-statutory servicesthe more likely it is that the small firm will use the accountant as a business adviser.

Proposition 2The small firm research we have reviewed points to a number of dimensions thatmake small firms more vulnerable than larger firms. In large part this vulnera-bility is resource-based in the sense that small firms lack the necessary routinesand competencies for survival. However, resource-based theory would also leadus to suppose that the use small firms make of their accountants as sources ofbusiness advice will be a function of the resources at the disposal of the firm. That

is we propose that:The more resources, tangible and intangible, a firm disposes the more likely it is thatthe accountant will be used as a business adviser.

One indication of a firms resources is reflected in its size so that (2a) the largerthe firm the more likely it is that the accountant will be used as a business adviser.Another resource lies in a firms competency orientation or absorptive capacity,i.e. its willingness to absorb and to invest in new knowledge (Cohen andLevinthal, 1990). Thus (2b) the greater the receptiveness of the firm in regard tonon-statutory advisory services, the more likely it is that the accountant will be

used as a business adviser, and (2c) the more the firm is willing to pay for non-statutory advisory services, the more likely it is that the accountant will be usedas a business adviser.

Proposition 3The uncertainty faced by small firms does not only derive from endogenousfactors, but also from exogenous factors in the sense of competitive pressures.The more competition faced by a small firm the less likely it will able to survivebecause its narrow resource base does not permit it to adapt its product or servicespectrum. That is, small firms facing competitive pressures need to be able to

source critical competencies for survival and development so that:The stronger the competitive pressures faced by the firm, the more likely it is that theaccountant will be used as a business adviser.

In the next section of the article we will test these propositions while control-ling for industry sector.

Empirical Analysis

Sample

Using a structured questionnaire in May 1998 we conducted a survey of smallfirms in Norway by telephone. A sample of 320 firms was generated randomly


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using client lists from a random selection of authorized accountants. Non-response was minimal with 305 firms cooperating. Of these, 65 percent had fewerthan 5 employees, 24 percent had between 5 and 9 employees, and the remain-der between 10 and 20 employees. Ninety percent of the interviews were

conducted with the owner or manager of the firm. The remaining 10 percent wereconducted with the deputy manager.

Although in the context of our sampling strategy non-response was minimal,the sampling strategy itself may be criticized in that the one-third of small firmsthat do not outsource the production of their annual financial accounts to author-ized accountants were excluded from our sample. Given the cost involved inusing an authorized accountant it is conceivable that the very smallest firmsprefer to perform this task in-house. This might account for our sample beingsomewhat skewed in relation to micro-firms. As we noted earlier in the article,about 80 percent of small firms in Norway have fewer than 5 employees, whereas

in our sample the proportion is 65 percent. By controlling for size in our empiri-cal analysis this bias is taken into account.

Operationalization of VariablesIn this section we present the operationalization of the variables.

Dependent VariableThe degree to which a small firm uses its authorized accountant as a businessadviser: Scale from 16; 1 = not at all and 6 = to a very large degree.

Independent Variables1a. Long-term Relationship with AccountantDichotomous variable: 1 = changed accountant in the last 5 years2 = have not changed accountant in the last 5 years.

1b. Perceived Competence in Statutory Accountancy ServicesThe degree to which the firm perceives its authorized accountant as a competentsource of statutory accountancy services. Scale from 16; 1 = very limitedcompetence and 6 = very highly competent.

1c. Perceived Competence in Business Advisory ServicesThe degree to which the firm perceives its authorized accountant as a competentsource of business advisory services. Scale from 16; 1 = very limited competenceand 6 = very highly competent.

2a. Firm SizeNumber of employees:1 employee = 124 employees = 359 employees = 7

1020 employees = 15.


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2b. Receptiveness for Business Advisory ServicesThe degree of interest small firms have in their authorized accountants attempt-ing to sell them advisory services on a scale from 16; 1 = very little interest and6 = very large interest.

2c. Maximum Rate for Business Advisory ServicesThe upper hourly billing rate the firm is willing to pay for business advisoryservices.Do not know or under NKr 300 = 1NKr 300450 = 2NKr 451650 = 3NKr 651 or more = 4

3. Degree of Competition

Scale from 16 with 1 = negligible and 6 = very hard.

Control VariableIndustry SectorRetail sector, manufacturing industry and services sector.

Testing of PropositionsPrior to testing our propositions let us examine our dependent variable, that isthe extent to which small firms use authorized accountants as business advisersfor issues beyond statutory services. Table 1 indicates that nearly 45 percent ofsmall firms claim that they use their accountant as a business consultant to a

large or very large degree, while nearly 30 percent either do not use theiraccountant at all in this respect or do so only to a small degree. These findingsindicate substantial variations.

However, given that these are subjective ratings there is a possibility that whatis very large for one firm may be just large for another. Similarly some forone small firm may be small for another. To guard against this possibility we willconduct an additional analysis wherein we use a dichotomized version of thedependent variable with very large and large forming the one value and theother categories forming the other.


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Table 1. The Degree to which Small Firms use Authorized Accountants as BusinessAdvisers (N= 305)

Degree Percentage

Very large 18.4

Large 26.2

Some 26.2

Small 13.8

Very small 9.2

Not at all 6.2

Total 100


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Table 2. Correlation Matrix for Variables Featured in the Propositions

N Mean SD Dependent 1a 1b 1c

Variable

Dependent Degree to which authorized

accountant is used as business adviser 305 4.12 1.43 1.00

1a. Long-term relationship with accountant 301 1.76 0.43 0.05 1.00

1b. Perceived competence in statutory

accountancy services 295 5.29 0.83 0.23*** 0.06 1.00

1c. Perceived competence in businessadvisory services 277 4.22 1.31 0.30*** 0.05 0.30***

2a. Firm size 304 4.87 4.16 0.05 0.01 0.05 0

2b. Receptiveness for business advisory

services 293 3.95 1.39 0.25*** 0.08 0.16** 0

2c. Maximum rate for business advisory

services 305 2.07 1.13 0.02 0.02 0.06 0

3. Degree of competition 299 4.24 1.25 0.11* 0.02 0.01 0

*p < .05 **p < .01 ***p < .001


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Table 2 features a correlation matrix containing the variables derived from ourpropositions. It indicates particular support for propositions 1b, 1c and 2b. Inaddition there is a significant correlation between degree of competition and thedegree to which authorized accountants are used as business advisers. This lendssome support to proposition 3 in that it suggests that competitive pressures dostimulate small firms to use their accountants as business advisers. The table indi-cates that small firms receptiveness for business advisory services and theirperception of their accountants competence in statutory accountancy and

business advisory services are interrelated.In Table 3 column (a) we have employed linear regression analysis to test ourpropositions. Because the dependent variable is measured on a six-point rankedscale (see Table 1), the appropriateness of ordinary linear regression may bequestioned. In order to accommodate possible deviations from the assumptionsunderlying ordinary regression analysis, we have also conducted an orderedlogit regression analysis according to the methodology developed by McCullagh(1980). The ordered logit model used in Table 3 column (b) is similar to logisticregression for a binary dependent variable with the additional assumption thatthe impact of an independent variable is constant across levels of the dependent

variable. Finally, we formed a binary dependent variable by collapsing verylarge and large into one category and all other responses into another (see


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Table 3. Determinants of the Degree to which Small Firms Currently use theirAuthorized Accountants as Business Advisers

(a) Linear (b) Ordered (c) Binary

regression logitb logitc

1a. Long-term relationship with accountant 0.080 0.065 0.218

1b. Perceived competence in statutory

accountancy services 0.255** 0.373** 0.441**

1c. Perceived competence in business

advisory services 0.230*** 0.351*** 0.381***

2a. Firm size 0.019 0.014 0.003

2b. Receptiveness for business advisory

services 0.155** 0.211** 0.196*

2c. Maximum rate for business advisory

services 0.021 0.018 0.073

3. Degree of competition 0.085 0.108 0.081Manufacturinga 0.085 0.285 0.703*

Servicesa 0.088 0.123 0.171

R2 0.147 0.163d 0.142d

F 4.80***

2 Log likelihood 816.5 319.5

Chi-square (d.f. = 9) 46.6*** 39.9***

aReference category: retailing; bCut points omitted for simplicity; cDependent variable recoded

into two categories; *p < .05 **p < .01 ***p < .001 one-tailed;dCox & Snell pseudo R2; N =

261; Unstandardized coefficients


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Table 1). The results of binary logistic regression with regard to the new dichot-omous variable are reported in Table 3 column (c).

Although the magnitude of coefficient estimates from ordinary regression,ordinal regression and binary logistic regression is not directly comparable, the

sign and significance for each explanatory variable based on each of thesealternative methods are identical with a single exception. The only notable differ-ence is the coefficient for manufacturing in the binary logit estimation; this is dueto a nonlinearity of the dependent variable within manufacturing. This stronglysupports the assumption that the robustness of ordinary regression for a samplethis large is strong enough to be confident in the sign and significance of theresults. A comparison of Spearman and Pearson correlations does not reveal anysubstantial differences (not shown here), further strengthening our belief thatalthough our measurement of the dependent variable possibly violates regressionassumptions, these violations give rise to negligible errors only.

The analysis indicates that the relationship between the small firm and itsaccountant is important in that both propositions 1b and 1c are supported.However, the analysis indicates that the actual longevity of the relationship(proposition 1a) is not important.

In terms of the resources the firm disposes only one aspect of this, thereceptiveness of the firm in regard to advisory services (proposition 2b), is signifi-cant.

With regard to the effect of competition (proposition 3) there is no significanteffect. Tests were conducted for a possible inverse-U effect, but none was found.In regard to the control variable, apart from the binary logit estimation, the table

indicates no sector differences.Finally, it is important to note that with explained variance (R2) at 0.147 thereclearly remains a considerable research effort to acquire a more comprehensiveunderstanding of the determinants of small firms use of authorized accountantsas business advisers. Logistic regression, whether binary or ordinal, does notprovide a measure of explained variance directly comparable to R2; the pseudoR2 does however suggest the same conclusion.

Conclusions and Future Research Directions

It is often argued that long-term relationships often result in a high degree oftrust between the parties involved (Ring and Van de Ven, 1992). It might, there-fore, be deduced that because trust is an important factor in the purchase ofadvisory services (Bennett and Robson, 1999), the longevity of the relationshipbetween the small firm and the accountant would be important in determiningtheir use as business advisers. However, in terms of our study this is not the case.This means that a small firms satisfaction with its accountant is actually inde-pendent of the duration of the relationship. Trust therefore seems to be more aresult of the quality of the services delivered rather than the duration of therelationship. That finding is in line with previous research and our results indicate

that small firms are reluctant to change accountant even when they are dis-satisfied (Marriot and Marriot, 2000). One possible explanation for this inertia


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may be the asymmetry of the information that may be assumed to exist betweenan accountant and a small firm. This asymmetry makes it difficult for an owner-manager to assess whether a new accountant will do a better job, so that the smallfirm chooses to stay with its existing accountant. Moreover, even though an

owner-manger is not satisfied with her accountant, she may consider that theregulatory responsibilities are being sufficiently attended to.

Unsurprisingly our study indicates that the small firm must perceive its accoun-tant as a credible deliverer of business advisory services if they are to be used inan advisory capacity. However, for a small firm to purchase business advice fromits accountant the results of our study indicate that there are at least twoconditions that must be fulfilled. First, the statutory service of the authorizedaccountancy must be perceived as being of high quality. Second, in line withSpillings (2000) research, the small firm itself must have an ambition to grow orto develop in the sense that it is receptive to the advisory services being offered

to it. If these two conditions are met, there is a significant increased tendency thatowner-managers will use non-statutory services from authorized accountancyfirms. Of these two conditions, it is the latter that we regard as representing animportant challenge for future research.

It would appear that for a small firm to source business advisory services fromits accountant it must have some critical degree of strategic intentconcerninggrowth ambitions. Strategic intent is the willingness to set goals and aspirationsthat create a motivating gap between ambition and existing resources (Gooder-ham, 1995; Hamel, 1995; Hamel and Prahalad, 1989). The concept encompassesan active management process and provides consistency to short-term action

while at the same time leaving room for reinterpretation as well as the emerg-ence of new opportunities. A firm characterized by strategic intent will be morefocused on developing its own competence (Rumelt, 1984), and therefore beparticularly interested in business advice over and above statutory accountancyservices because it may result in competence development within the firm.

However, we suggest that strategic intent alone will not lead to competencedevelopment and the use of business advisory services. The firm must also havea certain degree of absorptive capacity (Cohen and Levinthal, 1990; Gooderham,1995). Absorptive capacity is a dynamic capability that is embedded in a firmsroutines and processes making it possible to recognize the value of new infor-

mation, assimilate it, and apply it to commercial ends (Cohen and Levinthal,1990: 128). Our future research will seek to further explore the significance ofthese two factors that is strategic intent and absorptive capacity for thepurchase of business advisory services and to explore their amenability toexternal influence.

Acknowledgements

We wish to thank the Norwegian Research Council (NFR) for its generous funding of ourresearch and NARF for its unstinting cooperation with our project. We also wish to

express our appreciation to two unknown referees for critical but very constructivecomments at the various stages in the development of this article.


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PAUL GOODERHAM is a Professor in the Department of Strategy and

Management at the Norwegian School of Economics and Business Administration

(NHH). He is currently heading a project aiming at stimulating small accountants

to develop as SME business advisers. The project is jointly funded by theaccountancy industry and the Norwegian Reseach Council (NFR). With Odd


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Nordhaug he has recently written a book on International Management published

by Blackwell. [email: [email protected]]

ANITA TOBIASSEN is a Research Fellow at the Institute for Research inEconomics and Business Administration (SNF). Her doctoral research examined

the use of internal markets in large organizations. [email: [email protected]]

ERIK DVING is a Senior Research Fellow at the Institute for Research in

Economics and Business Administration (SNF). His doctoral research focused on

learning in organizations and he has since conducted a number of evaluations of

learning investments by firms. [email: [email protected]]

ODD NORDHUAG is a Professor in the Department of Strategy andManagement at the Norwegian School of Economics and Business Administration

(NHH). He has published a number of books within the field of organizational

learning including Human Capital in Organizations (Oxford University Press).

[email: [email protected]]


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Comptables en tant que sources de conseils en affaires pour les petites entre-

prises Paul N. Gooderham

Ecole norvgienne dconomie et dadministration des affaires (NHH), Norvge

Anita Tobiassen, Erik Dving

Institut pour la recherche sur lconomie et ladministration des affaires, Norvge

Odd Nordhaug

Ecole norvgienne dconomie et dadministration des affaires (NHH), Norvge

Dans de nombreux pays, les petits comptables jouent un rle important en tant queconseillers en affaires pour les petites entreprises en plus de fournir des services de compt-

abilit de base. Toutefois, tandis que certaines petites entreprises font beaucoup appel auxcomptables extrieurs en tant que conseillers en affaires, un grand nombre dentre eux neles utilisent que dans une petite mesure. Sur la base de petites entreprises en Norvge, cetarticle a pour but de nous aider mieux comprendre les dterminants de ces variations.Notre tude rvle que la qualit, plutt que la longvit, des rapports entre lentrepriseet le comptable est un important antcdent de la mesure dans laquelle les petites entre-prises utilisent les comptables en tant que conseillers en affaires. De plus, ltude indiqueque les orientations des entreprises fonctionnent galement en tant que dterminantsimportants.

Mots cls: comptables; services conseils en affaires; petites entreprises

Los contables como fuentes de asesoramiento comercial para las pequeas

empresas Paul N. Gooderham

Escuela Noruega de Economa y Administracin de Empresas (NHH), Noruega


Instituto de Investigacin en materia de Economa y Administracin de Empresas,

Noruega

Odd Nordhaug

Escuela Noruega de Economa y Administracin de Empresas (NHH), Noruega

En muchos pases los pequeos contables desempean un papel preponderante comoasesores para las pequeas empresas adems de prestar los servicios bsicos de contabil-idad. Aunque algunas pequeas empresas corrientemente emplean a los contablesexternos como asesores comerciales, gran parte de ellas slo depende de sus servicioshasta cierto punto. Basndose en las pequeas empresas en Noruega, este artculo sepropone contribuir a nuestro entendimiento de los factores determinantes de tales

variaciones. Nuestro estudio demuestra que ms bien la calidad que la longevidad de las


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relaciones entre la empresa y el contable profesional es un antecedente importante delgrado en que las pequeas empresas emplean a los contables como asesores comerciales.El estudio indica, adems, que la orientacin hacia la competencia de las firmas tambincumple la funcin de un factor determinante significativo.

Palabras claves: contables; servicio de asesoramiento de empresas; pequeas empresas

Wirtschaftsprfer als Unternehmensberatungsquelle fr mittelstndische

Betriebe Paul N. Gooderham

Norwegische Hochschule fr Volkswirtschafts- und Betriebswirtschaftslehre

(NHH), Norwegen


Forschungsinstitut fr Volkswirtschafts- und Betriebswirtschaftslehre, Norwegen

Odd Nordhaug

Norwegische Hochschule fr Volkswirtschafts- und Betriebswirtschaftslehre

(NHH), Norwegen

Zustzlich zu ihrer Funktion der Bereitstellung grundlegender Dienstleistungen desRechnungswesens spielen einzelne Wirtschaftsprfer in vielen Lndern eine wichtigeRolle als Unternehmensberater fr mittelstndische Betriebe. Whrend manche mittel-stndischen Betriebe externe Wirtschaftsprfer weitlufig als Unternehmensberaternutzen, gibt es trotzdem einen hohen Anteil an Betrieben, die einen Wirtschaftsprfer nurzu einem sehr geringen Grad nutzen. Auf der Grundlage von mittelstndischen Betriebenin Norwegen ist es Ziel dieses Beitrags, zum Verstndnis der Bestimmungsfaktorensolcher Abweichungen beizutragen. Unsere Studie zeigt, dass es eher die Qualitt undnicht so sehr die Langlebigkeit einer Beziehung zwischen einer Firma und einem zu-gelassenen Wirtschaftsprfer ist, die eine wichtige Voraussetzung dafr bildet, inwieweitmittelstndische Betriebe Wirtschaftsprfer als Unternehmensberater nutzen. Darberhinaus weist die Studie darauf hin, dass die Kompetenzorientierung von Firmen ebenfallseinen wichtigen Bestimmungsfaktor darstellt.

Schlagwrter: Wirtschaftsprfer; Unternehmensberatungsdienste; mittelstndische

Betriebe


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accountatnt as source 4 small business

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