The influence of process-oriented organisational design on operational performance and innovation: a quantitative analysis in the financial services industry

Market competition requires that organisations excel at both operational performance and innovation. Though process orientation is intended to benefit operations in general, the impact of specific elements remains unclear. The purpose of this study is to identify the specific organisational design components of process orientation that simultaneously influence operational performance and innovation. We survey employees in the financial services sector (N = 1069) regarding the influence of six process-oriented organisation design components on operational performance and innovation using PLS-SEM. The results indicate that organisational structure and process improvement encourage both operational performance and innovation. Personal autonomy is partially beneficial, while the others have no joint influence on operational performance and innovation. This study is first in providing evidence regarding the influence of a broad variety of organisational design components of process orientation on operational performance and innovation. The study contributes to theory on how process orientation improves operational performance and innovation. The findings can serve as a guideline for managers and organisations as to which organisational design components should be implemented to improve operations.

[1]  M. Scheerer,et al.  Problem Solving , 1967, Nature.

[2]  K. Sheikh,et al.  Investigating non-response bias in mail surveys. , 1981, Journal of epidemiology and community health.

[3]  Andy Neely,et al.  Performance measurement system design , 1995 .

[4]  Marc Antoni,et al.  Process orientation: The Swedish experience , 1999 .

[5]  Anders Gustafsson,et al.  The impact of quality practices on customer satisfaction and business results: product versus service organizations , 2001 .

[6]  Mary J. Benner,et al.  Process Management and Technological Innovation: A Longitudinal Study of the Photography and Paint Industries , 2002 .

[7]  Anders Gustafsson,et al.  The Role of Quality Practices in Service Organizations , 2003 .

[8]  Eitan Naveh,et al.  The effect of integrated product development on efficiency and innovation , 2005 .

[9]  A. Koutsomanoli-Filippaki,et al.  Competition and Concentration in the New European Banking Landscape , 2006 .

[10]  Henk W. Volberda,et al.  Exploratory Innovation, Exploitative Innovation and Peformance: Effects of Organizational Antecedents and Environmental Moderators , 2006, Manag. Sci..

[11]  Hajo A. Reijers,et al.  Implementing BPM systems: the role of process orientation , 2006, Bus. Process. Manag. J..

[12]  Tamar Frankel.  [The theory and the practice...]. , 2001, Tijdschrift voor diergeneeskunde.

[13]  Robert D. Klassen,et al.  The process management triangle: An empirical investigation of process trade-offs , 2007 .

[14]  M. Hammer.  The process audit. , 2007, Harvard business review.

[15]  J. Rossiter,et al.  The Predictive Validity of Multiple-Item versus Single-Item Measures of the Same Constructs , 2007 .

[16]  Mojca Indihar Stemberger,et al.  The impact of business process orientation on financial and non-financial performance , 2008, Bus. Process. Manag. J..

[17]  Andy C.L. Yeung,et al.  Specific customer knowledge and operational performance in apparel manufacturing , 2008 .

[18]  Ronald J. M. M. Does,et al.  Lean Six Sigma in financial services , 2008 .

[19]  V. Allee.  Value network analysis and value conversion of tangible and intangible assets , 2008 .

[20]  Roger Maull,et al.  Understanding Business Process Management: Implications for Theory and Practice , 2009 .

[21]  Georg von Krogh,et al.  Perspective - Tacit Knowledge and Knowledge Conversion: Controversy and Advancement in Organizational Knowledge Creation Theory , 2009, Organ. Sci..

[22]  Yi Li,et al.  Exploratory innovation, exploitative innovation, and performance: Influence of business strategies and environment , 2010 .

[23]  Markus Kohlbacher,et al.  Business Process Management Journal The effects of process orientation : a literature review , 2015 .

[24]  Suresh K. Nair,et al.  Operations in Financial Services—An Overview , 2010 .

[25]  Markus Kohlbacher,et al.  Process orientation: conceptualization and measurement , 2011, Bus. Process. Manag. J..

[26]  Siyuan Chen,et al.  A comparison of four methods for cognitive load measurement , 2011, OZCHI.

[27]  P. Garengo,et al.  Managerial processes: business process that sustain performance , 2011 .

[28]  Marko Sarstedt,et al.  PLS-SEM: Indeed a Silver Bullet , 2011 .

[29]  F. Damanpour,et al.  Managerial Innovation: Conceptions, Processes and Antecedents , 2012, Management and Organization Review.

[30]  Vesna Babi-Hodovi,et al.  THE INFLUENCE OF QUALITY PRACTICES ON BH COMPANIES' BUSINESS PERFORMANCE , 2012 .

[31]  Peter Rohner,et al.  Achieving impact with clinical process management in hospitals: an inspiring case , 2012, Bus. Process. Manag. J..

[32]  M. Spörrle,et al.  Work Motivation and Job Satisfaction as Antecedents of Research Performance: Investigation of Different Mediation Models , 2013 .

[33]  Sunhwa Choi,et al.  Changes in Operational Efficiency and Firm Performance: A Frontier Analysis Approach , 2012 .

[34]  Henrik Eriksson,et al.  Among Fumblers, Talkers, Mappers and Organisers: four applications of process orientation , 2013 .

[35]  Peter Trkman,et al.  Increasing process orientation with business process management: Critical practices' , 2013, Int. J. Inf. Manag..

[36]  Dante Pinheiro Martinelli,et al.  Business process management: a systemic approach? , 2013, Bus. Process. Manag. J..

[37]  Markus Kohlbacher,et al.  The Impact of Dynamic Capabilities through Continuous Improvement on Innovation: the Role of Business Process Orientation , 2013 .

[38]  L. G. Pee,et al.  Investigating the effects of business process orientation on organizational innovation performance , 2013, Inf. Manag..

[39]  Kevin McCormack,et al.  Improving performance aligning business analytics with process orientation , 2013, Int. J. Inf. Manag..

[40]  Hajo A. Reijers,et al.  The effects of process-oriented organizational design on firm performance , 2013, Bus. Process. Manag. J..

[41]  Amir Hossein Ghapanchi,et al.  Investigating the Relationship between Business Process Orientation and Social Capital , 2014 .

[42]  Jayanth Jayaram,et al.  The antecedents and consequences of product and process innovation strategy implementation in Australian manufacturing firms , 2014 .

[43]  Kevin W. Linderman,et al.  Process management, innovation and efficiency performance: The moderating effect of competitive intensity , 2014, Bus. Process. Manag. J..

[44]  Michael Leyer,et al.  How lean are financial service companies really? Empirical evidence from a large scale study in Germany , 2014 .

[45]  Mark Pagell,et al.  Impact of operational and marketing capabilities on firm performance: Evidence from economic growth and downturns , 2014 .

[46]  S. Afshin Mansouri,et al.  The lean-performance relationship in services: a theoretical model , 2014 .

[47]  C. Maier,et al.  The impact of business process management and applicant tracking systems on recruiting process performance: an empirical study , 2014, Journal of Business Economics.

[48]  V. S. Pai.  Nokia Ltd: Travails of a Market Leader , 2015 .

[49]  Xin David Ding,et al.  The impact of service design and process management on clinical quality: An exploration of synergetic effects ☆ , 2015 .

[50]  Michael Leyer,et al.  A framework for systemising services from an operations management perspective , 2016 .

[51]  U. Kumar,et al.  Operational excellence through business process orientation: An intra- and inter-organizational analysis , 2016 .

[52]  E. Larsson,et al.  Process Orientation , 2022 .