The effects of task and information asymmetry on business process redesign

Abstract The effective design of business processes is a subject of considerable importance to corporations today. Our research develops a theoretical framework for process design that is aimed at providing practical guidelines for process managers. The abundance of context-specific case studies which exist today share many success stories but provide little in terms of a general methodological approach. In this paper, we describe our general framework for the analysis and design of business processes. We outline a typical business process and critically evaluate typical pre- and post-reengineering process design issues. Explicit aspects of our analysis address workflow design, task bundling, technological enablers, and performance-based incentives. We examine the effects of task size asymmetry and performance information asymmetry on the optimal process design. Our results indicate that, with increased asymmetry, certain types of process designs become more desirable. Furthermore, we look at the interaction between job asymmetry and other process design factors such as knowledge intensity and level of job customization. Finally, we show when asymmetry can cause process reengineering efforts to complement the classic performance-based incentive compensation model. Practical implications of our results are illustrated for a variety of process design cases.