The perceived impact of agency control on the performance of Zimbabwean small-to-medium enterprises

% of them fail to survive beyond the first 3 years (Mudavanhu et al. 2011). Business performance, especially amongst SMEs, is often attributed to factors such as government support and management competencies, ignoring other factors such as agency relationships prevailing in the businesses; yet, they create a unique business environment and a complexity (Kallmuenzer 2015) that has the potential to compromise business performance. Agency relationships are ubiquitous in business operations because they are a fundamental concept upon which business relationships are built (Eisenhardt 1989). Agency relationships were conceptualised in the seminal work by Jensen and Meckling (1976) as a contract whereby one or more individuals (the principal) employ another individual (the agent) to execute some task on their behalf, involving the delegation of decision-making to the agent. Agency relationships can also be understood as legal relationships in which the agent is authorised by the principal to perform on their behalf and is empowered to do what the principal could lawfully perform in person (Baze 2009). 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.