The Perceived Impact of Agency Control on the Performance of Zimbabwean Small-To-Medium Enterprises

Abstract

Background: Agency control has been studied in the context of large public listed businesses and is linked to business performance. However, very limited studies have validated such a role in small-to-medium enterprises (SMEs), especially in a developing economy. Aim: The current study aimed at ezstablishing the perceived impact of agency control on performance, as measured by return on investment (ROI) and innovation in SMEs in Harare Province, Zimbabwe. Setting: Primary research was conducted amongst owners or managers of SMEs in Harare Province, Zimbabwe. Methods: The final sample consisted of 106 owners or managers of SMEs. The study was purely quantitative and adopted the survey design. Structured questionnaires were used for data collection. Results: The study established that the most used control mechanisms were frequent monitoring and face-to-face deliberations with subordinates. Weak and statistically insignificant relationships were found to exist between agency control and business performance measured by both ROI and innovation. Conclusion: It is best to solicit expert advice to coach owners or managers on how best agency control mechanisms could be formally instituted and managed to leverage on them.