Business process modeling : perceived benefits

The process-centered design of organizations and information systems is globally seen as an appropriate response to the increased economic pressure on organizations. At the methodological core of process-centered management is process modeling. However, business process modeling in large initiatives can be a time-consuming and costly exercise, making it potentially difficult to convince executive management of its benefits. To date, and despite substantial interest and research in the area of process modeling, the understanding of the actual benefits of process modeling in academia and practice is limited. To address this gap, this paper explores the perception of benefits derived from process modeling initiatives, as reported through a global Delphi study. The study incorporates the views of three groups of stakeholders – academics, practitioners and vendors. Our findings lead to the first identification and ranking of 19 unique benefits associated with process modeling. The study in particular found that process modeling benefits vary significantly between practitioners and academics. We argue that these variations may point to a dangerous disconnect between research projects and practical demands.

Value-oriented process modeling : integrating financial perspectives into business process re-design

Purpose – Financial information about costs and return on investments are of key importance to strategic decision-making but also in the context of process improvement or business engineering. In this paper we propose a value-oriented approach to business process modeling based on key concepts and metrics from operations and financial management, to aid decision making in process re-design projects on the basis of process models. Design/methodology/approach – We suggest a theoretically founded extension to current process modeling approaches, and delineate a framework as well as methodical support to incorporate financial information into process re-design. We use two case studies to evaluate the suggested approach. Findings – Based on two case studies, we show that the value-oriented process modeling approach facilitates and improves managerial decision-making in the context of process re-design. Research limitations / implications – We present design work and two case studies. More research is needed to more thoroughly evaluate the presented approach in a variety of real-life process modeling settings. Practical implications – We show how our approach enables decision makers to make investment decisions in process re-design projects, and also how other decisions, for instance in the context of enterprise architecture design, can be facilitated. Originality/value – This study reports on an attempt to integrate financial considerations into the act of process modeling, in order to provide more comprehensive decision making support in process re-design projects.

Operationalizing the resource based view for nascent and young firms : developing scales for resource advantages and disadvantages

Principal Topic: It is well known that most new ventures suffer from a significant lack of resources, which increases the risk of failure (Shepherd, Douglas and Shanley, 2000) and makes it difficult to attract stakeholders and financing for the venture (Bhide & Stevenson, 1999). The Resource-Based View (RBV) (Barney, 1991; Wernerfelt, 1984) is a dominant theoretical base increasingly drawn on within Strategic Management. While theoretical contributions applying RBV in the domain of entrepreneurship can arguably be traced back to Penrose (1959), there has been renewed attention recently (e.g. Alvarez & Busenitz, 2001; Alvarez & Barney, 2004). This said, empirical work is in its infancy. In part, this may be due to a lack of well developed measuring instruments for testing ideas derived from RBV. The purpose of this study is to develop a measurement scales that can serve to assist such empirical investigations. In so doing we will try to overcome three deficiencies in current empirical measures used for the application of RBV to the entrepreneurship arena. First, measures for resource characteristics and configurations associated with typical competitive advantages found in entrepreneurial firms need to be developed. These include such things as alertness and industry knowledge (Kirzner, 1973), flexibility (Ebben & Johnson, 2005), strong networks (Lee et al., 2001) and within knowledge intensive contexts, unique technical expertise (Wiklund and Shepard, 2003). Second, the RBV has the important limitations of being relatively static and modelled on large, established firms. In that context, traditional RBV focuses on competitive advantages. However, newly established firms often face disadvantages, especially those associated with the liabilities of newness (Aldrich & Auster, 1986). It is therefore important in entrepreneurial contexts to expand to an investigation of responses to competitive disadvantage through an RBV lens. Conversely, recent research has suggested that resource constraints actually have a positive effect on firm growth and performance under some circumstances (e.g., George, 2005; Katila & Shane, 2005; Mishina et al., 2004; Mosakowski, 2002; cf. also Baker & Nelson, 2005). Third, current empirical applications of RBV measured levels or amounts of particular resources available to a firm. They infer that these resources deliver firms competitive advantage by establishing a relationship between these resource levels and performance (e.g. via regression on profitability). However, there is the opportunity to directly measure the characteristics of resource configurations that deliver competitive advantage, such as Barney´s well known VRIO (Valuable, Rare, Inimitable and Organized) framework (Barney, 1997). Key Propositions and Methods: The aim of our study is to develop and test scales for measuring resource advantages (and disadvantages) and inimitability for entrepreneurial firms. The study proceeds in three stages. The first stage developed our initial scales based on earlier literature. Where possible, we adapt scales based on previous work. The first block of the scales related to the level of resource advantages and disadvantages. Respondents were asked the degree to which each resource category represented an advantage or disadvantage relative to other businesses in their industry on a 5 point response scale: Major Disadvantage, Slight Disadvantage, No Advantage or Disadvantage, Slight Advantage and Major Advantage. Items were developed as follows. Network capabilities (3 items) were adapted from (Madsen, Alsos, Borch, Ljunggren & Brastad, 2006). Knowledge resources marketing expertise / customer service (3 items) and technical expertise (3 items) were adapted from Wiklund and Shepard (2003). flexibility (2 items), costs (4 items) were adapted from JIBS B97. New scales were developed for industry knowledge / alertness (3 items) and product / service advantages. The second block asked the respondent to nominate the most important resource advantage (and disadvantage) of the firm. For the advantage, they were then asked four questions to determine how easy it would be for other firms to imitate and/or substitute this resource on a 5 point likert scale. For the disadvantage, they were asked corresponding questions related to overcoming this disadvantage. The second stage involved two pre-tests of the instrument to refine the scales. The first was an on-line convenience sample of 38 respondents. The second pre-test was a telephone interview with a random sample of 31 Nascent firms and 47 Young firms (< 3 years in operation) generated using a PSED method of randomly calling households (Gartner et al. 2004). Several items were dropped or reworded based on the pre-tests. The third stage (currently in progress) is part of Wave 1 of CAUSEE (Nascent Firms) and FEDP (Young Firms), a PSED type study being conducted in Australia. The scales will be tested and analysed with a random sample of approximately 700 Nascent and Young firms respectively. In addition, a judgement sample of approximately 100 high potential businesses in each category will be included. Findings and Implications: The paper will report the results of the main study (stage 3 – currently data collection is in progress) will allow comparison of the level of resource advantage / disadvantage across various sub-groups of the population. Of particular interest will be a comparison of the high potential firms with the random sample. Based on the smaller pre-tests (N=38 and N=78) the factor structure of the items confirmed the distinctiveness of the constructs. The reliabilities are within an acceptable range: Cronbach alpha ranged from 0.701 to 0.927. The study will provide an opportunity for researchers to better operationalize RBV theory in studies within the domain of entrepreneurship. This is a fundamental requirement for the ability to test hypotheses derived from RBV in systematic, large scale research studies.

Organizational ambidexterity and corporate entrepreneurship : the differential effects on venturing, innovation and renewal processes

Most corporate entrepreneurship studies have focused on either innovation, venturing or strategic renewal making comparison between the antecedents of all three aspects of corporate entrepreneurship difficult. Moreover, studies on corporate entrepreneurship hardly address organizational antecedents, while simultaneously managing and organizing CE and mainstream activities has been seen as a major challenge for incumbent firms. Our findings show that organizational ambidexterity has strong and differential effects on venturing, innovation and renewal. We find, for example, that innovation is affected by horizontal integration, while strategic renewal is significantly influenced by integration on top management team level.

Business Service Management

Business Service Management describes the emerging discipline dedicated to the IT-enabled management of services as corporate assets. Business Service Management deals with the service orientation of the organisation and the provisioning and use of business services. The term business service describes an autonomous transformational capability that is offered to and consumed by external or internal customers for their benefit. The prefix ‘business’ stresses that such a service has a market value, requires the ability to be managed internally as a corporate asset and that its implementation is technology-agnostic. While business services (or so called capabilities) have attracted the attention of many vendors and organisations, a lack of understanding of the activities required for the successful management of such business services remains a critical issue. In order to fill this gap, a framework consisting of Service Lifecycle Management, Service Value Management, Service Relationship Management and Service Enablement is proposed. This Framework has the potential to provide organisations with the much needed guidance in their attempts to convert current IT-driven service initiatives into successful service-centric business models.

Controlled flexibility and lifecycle management of business processes through extensibility

Vendors provide reference process models as consolidated, off-the-shelf solutions to capture best practices in a given industry domain. Customers can then adapt these models to suit their specific requirements. Traditional process flexibility approaches facilitate this operation, but do not fully address it as they do not sufficiently take controlled change guided by vendors' reference models into account. This tension between the customer's freedom of adapting reference models, and the ability to incorporate with relatively low effort vendor-initiated reference model changes, thus needs to be carefully balanced. This paper introduces process extensibility as a new paradigm for customizing reference processes and managing their evolution over time. Process extensibility mandates a clear recognition of the different responsibilities and interests of reference model vendors and consumers, and is concerned with keeping the effort of customer-side reference model adaptations low while allowing sufficient room for model change.

Identification and analysis of business and software services : A consolidated approach

Although the benefits of service orientation are prevalent in literature, a review, analysis, and evaluation of the 30 existing service analysis approaches presented in this paper have shown that a comprehensive approach to the identification and analysis of both business and supporting software services is missing. Based on this evaluation of existing approaches and additional sources, we close this gap by proposing an integrated, consolidated approach to business and software service analysis that combines and extends the strengths of the examined methodologies.

Business and software service lifecycle management

Although the service-oriented paradigm has been well established in the technical domain for quite some time now, service governance is still considered a research gap. To ensure adequate governance, there is a necessity to manage services as first-class assets throughout the lifecycle. Now that the concept of ser-vice-orientation is also increasingly applied on the business level to structure an organisation’s capabili-ties, the problem has become an even bigger chal-lenge. This paper presents a generic business and software service lifecycle and aligns it with the com-mon management layers in organisations. Using ser-vice analysis as an example, it moreover illustrates how activities in the service lifecycle may vary on lower levels of granularity depending on the focus on business or software services.

Accounting : building business skills, 3rd ed.

The new edition of this widely used and respected introductory accounting textbook continues to provide students and academics with a well written and accessible resource, with ample illustrations and applications to business for a first study of accounting. The text effectively maintains the balance between a 'user' and 'preparer' perspective by integrating real financial information and business decisions throughout. Through the use of real company information and financial statements students will quickly appreciate the use and users of accounting information. The textbook clearly outlines to students how a financial statement - such as a balance sheet, income statement, cash flow statement - communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for further studies in accounting. The integral role of financial statements for decision making is also emphasised in this text and is reinforced throughout by the Decision Toolkit in each chapter. Students are provided with an extensive set of tools necessary to make business decisions based on financial information.

Business Drivers for BIM

his report describes in detail a project aimed at providing a better understanding of the business drivers and barriers to the adoption of Building Information Modelling (BIM) in the Architecture Engineering and Construction (AEC) and facility management (FM) industry sectors. The objectives of the project were to investigate the nature of economic, process and industry constraints to BIM adoption and then - if possible - to identify business strategies, and cost/benefit models that may support adoption of BIM in AEC/FM industry. The research was based on case studies from the property, construction and facility management sectors as well as other industries and interviews with business leaders and users of advanced applications of CAD in the industry.

E-business adoption in construction : international review on impediments

The adoption of e-business by the Australian construction industry lags other service and product industries. It is assumed that slow adoption rate does not reflect the maturity of the technology but is due to adoption impediments peculiar to the nature of construction. This chapter examines impediments to the uptake of e-business nationally and internationally. A systematic and extensive literature search of impediments (also referred to as obstacles, impediments or hindrances) to adoption has been undertaken and the findings discussed in this chapter. This review included more that 200 documents and these have been published in a searchable database as part of a larger research initiative funded by the Cooperative Research Centre for Construction Innovation. The influence of levels of e-business maturity seen in other sectors such as retail, tourism and manufacturing was also captured and a number of major impediments were identified some including: privacy, trust, uncertainty of financial returns, lack of reliable measurement, fraud, lack of support and system maintenance. A total of 23 impediments were assessed in terms of impact to organisational type and size across reviewed documents. With this information it was possible to develop a reference framework for measuring maturity levels and readiness to uptake e-business in construction. Results have also shown that impediments to e-business adoption work differently according to organisational type and culture. Areas of training and people development need to be addressed. This would include a more sensitive approach to the nature of construction organisations, especially to those small and medium enterprises. Raising levels of awareness and creating trust for on-line collaboration are other aspects that need attention, which current studies confirm as lacking. An empirical study within construction, to validate these findings, forms the subsequent phase of this research.

Individual firms and regional business clusters : the HRM advantage in rent generation

Much of the literature on clusters has focused on the economic advantages of clusters and how these can be achieved in terms of competition, regional development and local spillovers. Some studies have focused at the level of the individual firm however human resource management (HRM) in individual clustered firms has received scant attention. This paper innovatively utilises the extended Resource Based View (RBV) of the firm as a framework to conceptualise the human resource processes of individual firms within a cluster. RBV is argued as a useful tool as it explains external rents outside a firm’s boundaries. The paper concludes that HRM can assist in generating rents for firms and clusters more broadly when the function supports valuable interfirm relationships important for realising inter-firm advantages.

Value creation and value capture fro open source software publisher : a new business model based on mutualisation

Key topics: Since the birth of the Open Source movement in the mid-80's, open source software has become more and more widespread. Amongst others, the Linux operating system, the Apache web server and the Firefox internet explorer have taken substantial market shares to their proprietary competitors. Open source software is governed by particular types of licenses. As proprietary licenses only allow the software's use in exchange for a fee, open source licenses grant users more rights like the free use, free copy, free modification and free distribution of the software, as well as free access to the source code. This new phenomenon has raised many managerial questions: organizational issues related to the system of governance that underlie such open source communities (Raymond, 1999a; Lerner and Tirole, 2002; Lee and Cole 2003; Mockus et al. 2000; Tuomi, 2000; Demil and Lecocq, 2006; O'Mahony and Ferraro, 2007;Fleming and Waguespack, 2007), collaborative innovation issues (Von Hippel, 2003; Von Krogh et al., 2003; Von Hippel and Von Krogh, 2003; Dahlander, 2005; Osterloh, 2007; David, 2008), issues related to the nature as well as the motivations of developers (Lerner and Tirole, 2002; Hertel, 2003; Dahlander and McKelvey, 2005; Jeppesen and Frederiksen, 2006), public policy and innovation issues (Jullien and Zimmermann, 2005; Lee, 2006), technological competitions issues related to standard battles between proprietary and open source software (Bonaccorsi and Rossi, 2003; Bonaccorsi et al. 2004, Economides and Katsamakas, 2005; Chen, 2007), intellectual property rights and licensing issues (Laat 2005; Lerner and Tirole, 2005; Gambardella, 2006; Determann et al., 2007). A major unresolved issue concerns open source business models and revenue capture, given that open source licenses imply no fee for users. On this topic, articles show that a commercial activity based on open source software is possible, as they describe different possible ways of doing business around open source (Raymond, 1999; Dahlander, 2004; Daffara, 2007; Bonaccorsi and Merito, 2007). These studies usually look at open source-based companies. Open source-based companies encompass a wide range of firms with different categories of activities: providers of packaged open source solutions, IT Services&Software Engineering firms and open source software publishers. However, business models implications are different for each of these categories: providers of packaged solutions and IT Services&Software Engineering firms' activities are based on software developed outside their boundaries, whereas commercial software publishers sponsor the development of the open source software. This paper focuses on open source software publishers' business models as this issue is even more crucial for this category of firms which take the risk of investing in the development of the software. Literature at last identifies and depicts only two generic types of business models for open source software publishers: the business models of ''bundling'' (Pal and Madanmohan, 2002; Dahlander 2004) and the dual licensing business models (Välimäki, 2003; Comino and Manenti, 2007). Nevertheless, these business models are not applicable in all circumstances. Methodology: The objectives of this paper are: (1) to explore in which contexts the two generic business models described in literature can be implemented successfully and (2) to depict an additional business model for open source software publishers which can be used in a different context. To do so, this paper draws upon an explorative case study of IdealX, a French open source security software publisher. This case study consists in a series of 3 interviews conducted between February 2005 and April 2006 with the co-founder and the business manager. It aims at depicting the process of IdealX's search for the appropriate business model between its creation in 2000 and 2006. This software publisher has tried both generic types of open source software publishers' business models before designing its own. Consequently, through IdealX's trials and errors, I investigate the conditions under which such generic business models can be effective. Moreover, this study describes the business model finally designed and adopted by IdealX: an additional open source software publisher's business model based on the principle of ''mutualisation'', which is applicable in a different context. Results and implications: Finally, this article contributes to ongoing empirical work within entrepreneurship and strategic management on open source software publishers' business models: it provides the characteristics of three generic business models (the business model of bundling, the dual licensing business model and the business model of mutualisation) as well as conditions under which they can be successfully implemented (regarding the type of product developed and the competencies of the firm). This paper also goes further into the traditional concept of business model used by scholars in the open source related literature. In this article, a business model is not only considered as a way of generating incomes (''revenue model'' (Amit and Zott, 2001)), but rather as the necessary conjunction of value creation and value capture, according to the recent literature about business models (Amit and Zott, 2001; Chresbrough and Rosenblum, 2002; Teece, 2007). Consequently, this paper analyses the business models from these two components' point of view.

Is the sum more than the corporate entrepreneurship parts? the different effects of social capital on innovation, venturing, and renewal processes

Principal Topic Although corporate entrepreneurship is of vital importance for long-term firm survival and growth (Zahra and Covin, 1995), researchers still struggle with understanding how to manage corporate entrepreneurship activities. Corporate entrepreneurship consists of three parts: innovation, venturing, and renewal processes (Guth and Ginsberg, 1990). Innovation refers to the development of new products, venturing to the creation of new businesses, and renewal to redefining existing businesses (Sharma, and Chrisman, 1999; Verbeke et al., 2007). Although there are many studies focusing on one of these aspects (cf. Burgelman, 1985; Huff et al., 1992), it is very difficult to compare the outcomes of these studies due to differences in contexts, measures, and methodologies. This is a significant lack in our understanding of CE, as firms engage in all three aspects of CE, making it important to compare managerial and organizational antecedents of innovation, venturing and renewal processes. Because factors that may enhance venturing activities may simultaneously inhibit renewal activities. The limited studies that did empirically compare the individual dimensions (cf. Zahra, 1996; Zahra et al., 2000; Yiu and Lau, 2008; Yiu et al., 2007) generally failed to provide a systematic explanation for potential different effects of organizational antecedents on innovation, venturing, and renewal. With this study we aim to investigate the different effects of structural separation and social capital on corporate entrepreneurship activities. The access to existing and the development of new knowledge has been deemed of critical importance in CE-activities (Floyd and Wooldridge, 1999; Covin and Miles, 2007; Katila and Ahuja, 2002). Developing new knowledge can be facilitated by structurally separating corporate entrepreneurial units from mainstream units (cf. Burgelman, 1983; Hill and Rothaermel, 2003; O'Reilly and Tushman, 2004). Existing knowledge and resources are available through networks of social relationships, defined as social capital (Nahapiet and Ghoshal, 1998; Yiu and Lau, 2008). Although social capital has primarily been studied at the organizational level, it might be equally important at top management level (Belliveau et al., 1996). However, little is known about the joint effects of structural separation and integrative mechanisms to provide access to social capital on corporate entrepreneurship. Could these integrative mechanisms for example connect the separated units to facilitate both knowledge creation and sharing? Do these effects differ for innovation, venturing, and renewal processes? Are the effects different for organizational versus top management team integration mechanisms? Corporate entrepreneurship activities have for example been suggested to take place at different levels. Whereas innovation is suggested to be a more bottom-up process, strategic renewal is a more top-down process (Floyd and Lane, 2000; Volberda et al., 2001). Corporate venturing is also a more bottom-up process, but due to the greater required resource commitments relative to innovation, it ventures need to be approved by top management (Burgelman, 1983). As such we will explore the following key research question in this paper: How do social capital and structural separation on organizational and TMT level differentially influence innovation, venturing, and renewal processes? Methodology/Key Propositions We investigated our hypotheses on a final sample of 240 companies in a variety of industries in the Netherlands. All our measures were validated in previous studies. We targeted a second respondent in each firm to reduce problems with single-rater data (James et al., 1984). We separated the measurement of the independent and the dependent variables in two surveys to create a one-year time lag and reduce potential common method bias (Podsakoff et al., 2003). Results and Implications Consistent with our hypotheses, our results show that configurations of structural separation and integrative mechanisms have different effects on the three aspects of corporate entrepreneurship. Innovation was affected by organizational level mechanisms, renewal by integrative mechanisms on top management team level and venturing by mechanisms on both levels. Surprisingly, our results indicated that integrative mechanisms on top management team level had negative effects on corporate entrepreneurship activities. We believe this paper makes two significant contributions. First, we provide more insight in what the effects of ambidextrous organizational forms (i.e. combinations of differentiation and integration mechanisms) are on venturing, innovation and renewal processes. Our findings show that more valuable insights can be gained by comparing the individual parts of corporate entrepreneurship instead of focusing on the whole. Second, we deliver insights in how management can create a facilitative organizational context for these corporate entrepreneurship activities.

Trust and strong ties in the selection and evaluation of business advisors by small firms

Principal Topic A small firm is unlikely to possess internally the full range of knowledge and skills that it requires or could benefit from for the development of its business. The ability to acquire suitable external expertise - defined as knowledge or competence that is rare in the firm and acquired from the outside - when needed thus becomes a competitive factor in itself. Access to external expertise enables the firm to focus on its core competencies and removes the necessity to internalize every skill and competence. However, research on how small firms access external expertise is still scarce. The present study contributes to this under-developed discussion by analysing the role of trust and strong ties in the small firm's selection and evaluation of sources of external expertise (henceforth referred to as the 'business advisor' or 'advisor'). Granovetter (1973, 1361) defines the strength of a network tie as 'a (probably linear) combination of the amount of time, the emotional intensity, the intimacy (mutual confiding) and the reciprocal services which characterize the tie'. Strong ties in the context of the present investigation refer to sources of external expertise who are well known to the owner-manager, and who may be either informal (e.g., family, friends) or professional advisors (e.g., consultants, enterprise support officers, accountants or solicitors). Previous research has suggested that strong and weak ties have different fortes and the choice of business advisors could thus be critical to business performance) While previous research results suggest that small businesses favour previously well known business advisors, prior studies have also pointed out that an excessive reliance on a network of well known actors might hamper business development, as the range of expertise available through strong ties is limited. But are owner-managers of small businesses aware of this limitation and does it matter to them? Or does working with a well-known advisor compensate for it? Hence, our research model first examines the impact of the strength of tie on the business advisor's perceived performance. Next, we ask what encourages a small business owner-manager to seek advice from a strong tie. A recent exploratory study by Welter and Kautonen (2005) drew attention to the central role of trust in this context. However, while their study found support for the general proposition that trust plays an important role in the choice of advisors, how trust and its different dimensions actually affect this choice remained ambiguous. The present paper develops this discussion by considering the impact of the different dimensions of perceived trustworthiness, defined as benevolence, integrity and ability, on the strength of tie. Further, we suggest that the dimensions of perceived trustworthiness relevant in the choice of a strong tie vary between professional and informal advisors. Methodology/Key Propositions Our propositions are examined empirically based on survey data comprising 153 Finnish small businesses. The data are analysed utilizing the partial least squares (PLS) approach to structural equation modelling with SmartPLS 2.0. Being non-parametric, the PLS algorithm is particularly well-suited to analysing small datasets with non-normally distributed variables. Results and Implications The path model shows that the stronger the tie, the more positively the advisor's performance is perceived. Hypothesis 1, that strong ties will be associated with higher perceptions of performance is clearly supported. Benevolence is clearly the most significant predictor of the choice of a strong tie for external expertise. While ability also reaches a moderate level of statistical significance, integrity does not have a statistically significant impact on the choice of a strong tie. Hence, we found support for two out of three independent variables included in Hypothesis 2. Path coefficients differed between the professional and informal advisor subsamples. The results of the exploratory group comparison show that Hypothesis 3a regarding ability being associated with strong ties more pronouncedly when choosing a professional advisor was not supported. Hypothesis 3b arguing that benevolence is more strongly associated with strong ties in the context of choosing an informal advisor received some support because the path coefficient in the informal advisor subsample was much larger than in the professional advisor subsample. Hypothesis 3c postulating that integrity would be more strongly associated with strong ties in the choice of a professional advisor was supported. Integrity is the most important dimension of trustworthiness in this context. However, integrity is of no concern, or even negative, when using strong ties to choose an informal advisor. The findings of this study have practical relevance to the enterprise support community. First of all, given that the strength of tie has a significant positive impact on the advisor's perceived performance, this implies that small business owners appreciate working with advisors in long-term relationships. Therefore, advisors are well advised to invest into relationship building and maintenance in their work with small firms. Secondly, the results show that, especially in the context of professional advisors, the advisor's perceived integrity and benevolence weigh more than ability. This again emphasizes the need to invest time and effort into building a personal relationship with the owner-manager, rather than merely maintaining a professional image and credentials. Finally, this study demonstrates that the dimensions of perceived trustworthiness are orthogonal with different effects on the strength of tie and ultimately perceived performance. This means that entrepreneurs and advisors should consider the specific dimensions of ability, benevolence and integrity, rather than rely on general perceptions of trustworthiness in their advice relationships.