"Informality, Advice and Concerns: Business Advice as an Uncertainty Reduction Strategy"

We combine theory from organizational psychology with that of entrepreneurship to propose an uncertainty-identity theory of business advice. The uncertainty and anxieties present in entrepreneurship is represented by the number of concerns that a CEO has about their firm, which we relate to the propensity to seek advice from formal organizations that are external to the business. To test our theory we use a survey of 1202 UK CEOs to find the significant relation between greater concerns and more business external advice seeking behavior. In addition we find that informal and formal sources of advice are complementary rather than alternatives for each other. Informal advice is associated with greater concerns expressed by CEOs. We draw implications for entrepreneurship and the prospects for uncertainty-identity theory within entrepreneurship.