Business Process Management.

Case study regarding the course Business Process Management. Attached are both the article and the required questions to be answered regarding the case.
III. SUMMARY
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IV. KEY LEARNING POINTS
Identify the key learning points in the read and analyze assigned activity.
V. RELEVANT STATEMENTS TO THE SESSION
While you reading, identify the relevant statements to the session and insert them in order in the following space.
VI. CRITICAL ANALYSIS
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? Present arguments coherently, supported by evidence and facts to substantiate on why you may take a particular stance and/ or position towards a particular approach whether against or in support of it;
? Capable of bridging the gap between the theory and conceptual work with the application under consideration.

VII. PRACTICAL IMPLICATIONS
How could you apply the subject matter from the article in a real business case?
VIII. LEARNING REFLECTIONS
What have you learnt? Critical thinking is about lessons learnt to be drawn from the analysis.
Experiences of implementing
process management:
a multiple-case study
Klara Palmberg
Lulea° University of Technology, Lulea° , Sweden
Abstract
Purpose – Process management is becoming an essential part of contemporary organizations in
all industries. However, many organizations experience problems during the implementation of
a process management approach. The purpose of this paper is to explore and describe the
organizational implications when implementing process management, how to handle the relationship
between the functional organization and a process perspective, and the roles of managers, teams, and
individuals.
Design/methodology/approach – A multiple-case study approach is used to get an extensive
picture of and analyze how three Swedish organizations have worked with process management.
Findings – The studied organizations have introduced a process management structure into their
functional organizational structure, including the introduction of new management positions such as
process owners and process leaders. A discourse is identified in earlier research between those arguing
for a full transformation from a functionally oriented to a fully process-oriented organizational
structure, and those promoting a more moderate transformation where a process management
structure is “matrixed onto†the existing organization. The analysis could be interpreted as supporting
the second line of reasoning, where the functional and process structures co-exist in the organization,
creating a constructive dynamic.
Originality/value – The paper provides two major contributions. First, the empirical descriptions
and analysis of implementing process management contribute to the knowledge and understanding
among both practitioners and researchers. The second major contribution is the identified need of
co-existence of a process and functional perspective, and the implication that complexity is created
rather than reduced in organizations.
Keywords Process management, Business process re-engineering, Organizational structures, Sweden
Paper type Case study
1. Introduction
Processes and process management are becoming an essential part of contemporary
organizations in all industries. Quality management, Six Sigma and Lean all build on
components of working with and improving organizational processes (Andersson et al.,
2006; Dahlgaard and Dahlgaard-Park, 2006). The new ISO 9001:2008 standard is
placing considerable emphasis on processes (ISO, 2009), and process management is a
significant part of most excellence models, such as the Malcolm Balridge National
Quality Award (NIST, 2009) and the EFQM Excellence Model (EFQM, 2009). When
exploring if Six Sigma and Lean are new methods, or if they are repackaged versions
of previously popular methods – total quality management and just-in-time – Na¨slund
(2008) emphasises the importance of placing organizational change and improvement
methods in general under a process management umbrella.
Zairi (1997) stated, based on a literature review, that the word “process†had become
a part of everyday business language. Hammer and Stanton (1999) argued, on the basis
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-7154.htm
Process
management
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Business Process Management
Journal
Vol. 16 No. 1, 2010
pp. 93-113
q Emerald Group Publishing Limited
1463-7154
DOI 10.1108/14637151011017967
of a study of IBM and Microsoft among others, that for most companies there is no
real alternative to shifting from a traditional business to a process enterprise.
Organizations in Sweden have been working explicitly with process management since
the end of the 1980s. The methodology has been used in order to reduce lead times
and increase customer focus both inside and outside the organization, and this
development has been attributed to escalating demands from customers regarding
quality (Egnell, 1995).
Even though process management is a common approach today, many organizations
express concerns about problems with implementing and maintaining a process
management approach. In a study of quality award recipients in Sweden, Hansson
(2003) found that many small organizations perceive work with process management
to be problematic. Based on a survey of the application of process management
in Swedish organizations Forsberg et al. (1999) state that the expectations for results
are unreasonably high. Implementing process management appears to be rather
demanding: “In practice, however, the process approach seems difficult to understand
and to put into action†(Rentzhog, 1996, p. 13).
In a paper on the definitions and models of process management, the Palmberg (2009)
concludes that in both research and in applications in organizations there is a string
focus on the technical parts of process management; the definitions of a process, the
levels and categorizations of processes, and the techniques for mapping
and documenting processes on an activity level (Palmberg, 2009). Many organizations
devote extensive resources to web-based documentation systems, presenting their
processes in several levels, from main processes down to individual tasks, without
achieving the planned effects. This is combined with the often seen confusion and
discontent among senior management regarding the perceived lack of clear results from
implementing process management.
Through a literature review of the area, Hellstro¨m and Peterson (2005) conclude that
the literature is foremost built on theoretical reasoning, resulting in a large number of
how-to-do checklists. Furthermore, they argue that there is a lack of empirical research
into the effects of process management. Hellstro¨m and Peterson (2005) believe that
“despite a decade of experience of practicing process-oriented management, certain
fundamental problems still beset its successful application and causes practitioners
concern.†Based on a literature review, O’Neill and Sohal (1999) reach the same
conclusion, and state that more empirical research is needed.
Several empirical articles covering tools and methodologies for mapping and
improving single processes have been identified (Ku¨ng and Hagen, 2007; Sandhu
and Gunasekaran, 2004; Ongaro, 2004, among others). However, few empirically
based articles have been found on the organizational issues of implementing process
management, how to handle the relationship between the functional organization and a
process perspective, and on the roles of managers, teams, and individuals.
Based on the arguments above that process management is becoming essential in
organizations, that many organizations experience problems during implementation,
and the expressed need for empirical research, the purpose of the paper is to explore
and describe the organizational implications when implementing process management.
It describes the experiences of introducing process management in three different
organizations. The overarching questions have been:
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. What was the purpose and what were the results of implementing process
management?
. How is the ability to drive improvement affected when implementing process
management?
. What are the effects experienced by individuals when implementing process
management?
. How are organizational structures, roles and responsibilities affected when
implementing process management?
The paper is displayed as follows: as a part of a further introduction of process
management, the next sections present definitions of process management, the purposes
and results of implementing process management found in the literature, and different
process maturity models. The next section describes the methodology used when
performing the case studies, followed by case descriptions of the organizations studied.
The case descriptions are then summarized and analyzed. Finally, conclusions are
drawn and a discussion of the implications is presented.
1.1 Definitions of process management
The concept of process management is not something entirely new. Shewhart (1931)
was one of the first to argue for process control in favor of product control. During the
1970s, methodologies for working with processes were developed under labels such as
just-in-time and lean production (Schonberger, 1986). In the 1980s and 1990s, the scope
of process control was expanded to encompass a corporate emphasis, including all
functions of an organization. A great deal of attention was focused on business process
re-engineering, as described by, for example, Hammer and Champy (1993). Process
management has been on the agenda since the early 1980s, but unlike that of many
other management concepts, the interest in process management has remained high
(Hellstro¨m, 2006).
A recent literature review on process management (Palmberg, 2009), covering
77 articles, indicates that there are no common definitions of the concepts of processes
and process management.Aprocess definition is presented as “A horizontal sequence of
activities that transforms an input (need) to an output (result) to meet the needs of a
customer or stakeholder†(Palmberg, 2009, p. 207). When it comes to a definition of
process management, two different movements are identified. The first movement (A),
focusing on the management and improvement of single processes, is summarized as:
“A structured systematic approach to analyze and continually improve the processâ€
(Palmberg, 2009, p. 210). The second movement (B) shares a more holistic view on
process management as a part of managing the whole organization and is defined as:
“A more holistic manner to manage all aspects of the business and as a valuable
perspective to adopt in determining organizational effectiveness†(Palmberg, 2009,
p. 210).
1.2 Purpose and results of implementing process management
The purposes found in the literature review of implementing process management
(Palmberg, 2009) include: to remove barriers between functional groups and bond
the organization together (Jones, 1994; Llewellyn and Armistead, 2000); to control and
improve the processes of the organization (Melan, 1989; Pritchard and Armistead, 1999;
Process
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Biazzo and Bernardi, 2003; Sandhu and Gunasekaran, 2004); to improve the quality
of products and services (Melan, 1989; McAdam and McCormack, 2001; Sandhu
and Gunasekaran, 2004); to identify opportunities for outsourcing and the use of
technology to support business (Lindsay et al., 2003; Lock Lee, 2005); to improve the
quality of collective learning within the organization and between the organization and
its environment (Bawden and Zuber-Skerritt, 2002); to align the business process
with strategic objectives and customer needs (Lee and Dale, 1998); and to improve
organizational effectiveness and improve business performance (Jones, 1994;
Elzinga et al., 1995; Armistead et al., 1999).
Sentanin et al. (2008) present a case in a Brazilian public research center where the
purpose of implementing process management was to understand its core processes
in order to continue operating effectively and gaining competitive advantage. A survey
from manufacturing plants in the USA shows that process management is one of the
core quality principles that have significant impacts on quality (Zu, 2009).
Armistead and Machin (1998) present a description of the adoption of process
management at Royal Mail, UK, where the driver was declining market shares and
dissatisfied customers and employees. The result described was that the process
view allowed for a genuine understanding of what quality is from the viewpoint of
the customer, and that the employees in the operations understand where they fit
(Armistead and Machin, 1998).
The results achieved from implementing process management in a Swiss bank
are described by Ku¨ng and Hagen (2007) as reduced cycle time, increased output
per employee, and increased quality of work products. Process re-engineering and
management logic and techniques are used as enablers for the successful introduction
of one-stop shops in a number of Italian municipalities; the approach resulted in
reduced throughput times and a single interface with entrepreneurs was established
and empowered (Ongaro, 2004).
Empirical research at Volvo Cars between 1994 and 2000 (Hertz et al., 2001) describes
the results of the work with process management as decreased inventory cost, shorter
lead times, increased delivery precision, and higher customer satisfaction. Forsberg et al.
(1999) found, based on a survey of the application of process management in Swedish
organizations, that the introduction of process management gave positive results in the
following areas: common language, cooperation, customer orientation, cost, lead time,
learning abilities, holistic view, and standardization.
Findings similar to those of Forsberg et al. (1999) have also been reported by Garvare
(2002). Telephone interviews with managers of 62 Swedish small and medium-sized
enterprises revealed that in their opinion the general response from the personnel when
implementing process management had been positive or very positive.Amajority of the
respondents claimed that since the introduction of process management their company
had improved its financial result, recognized increased customer satisfaction, increased
its customer base, become more efficient and had reached a higher level of delivery
accuracy. The main problem areas due to the implementation of process management
included bureaucratic documentation procedures and difficulties when trying to involve
older personnel and middle managers.
DeToro and McCabe (1997) state that a change towards process management
requires not just the use of a set of tools and techniques, but a change in management
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style and way of thinking. According to Rentzhog (1996), the implementation of
process management includes both structural and cultural changes to the organization.
1.3 Process maturity models, organizational structures, and roles
Several models of process maturity have been described in the literature; see examples
in Table I. Sentanin et al. (2008) present a maturity model developed by Goncalves
(2000), describing five stages (A-E) of companies moving towards a process-based
organization, from a strictly functional model to a stage essentially based on processes
(the original article has not been used because it is written in Spanish). Sentanin et al.
(2008) use this model to identify the process maturity level of their case, a Brazilian
public research center that is placed in the second stage (B).
The second process maturity model is presented by Lockamy and McCormack
(2004), describing the stages from an ad hoc to an extended maturity level. The third
model is based on empirical research at the Swedish car company Volvo between 1994
and 2000 (Hertz et al., 2001). Hertz et al. (2001) present a three-level model combining
the orientation (production, cost, and network) with the organizational focus
(functional, project, and process).
The first two maturity models by Goncalves (2000) in Sentanin et al. (2008)
and Lockamy and McCormack (2004) argue for a full transition from a traditional
functional organization (Stage A or ad hoc) to an organization fully based on the
processes (Stage E or extended); see Figure 1 and the transition all the way from Stage I
– a strictly functional organizational structure – to Stage III – a strictly process-based
organizational structure.
Hertz et al. (2001) describe a conflicting, more moderate transformation, where a
process management structure is “matrixed onto†the existing organization, as in
Stage II – a matrix with both a process and a functional organizational structure – of
Figure 1. In the same line of reasoning, Ongaro (2004) concludes that process
management should not be seen as a question of all or nothing, but as a continuum
between better process-related knowhow of the employees to an organizational and
technological solution. Also supporting a more moderate line ares Ku¨ng and Hagen
(2007, p. 86), who state that: “Process management does not entail the absence of
traditional hierarchical relations [. . .] Process management usually leads to a matrix
framework.â€
Hammer and Stanton (1999) argue that most companies overlay new processes on
established functional organizations, with possible negative consequences since the
traditional organization – with job definitions, performance measurement systems,
and managerial hierarchies – do not always support the performance of processes.
Hammer (2007) states that the horizontal processes pull people in one direction, and the
traditional vertical management system might pull them in another.
There is possibly a danger if working too hard on building a prominent process
management structure within an organization, a new hierarchical structure, going
horizontally through the organization instead of top-down, could be created. Silvestro
and Westley (2002) present an analysis of functional and process structures and
conclude that both structures have both benefits and limitations.
A similar discourse can be seen in the area of roles and responsibilities. On one side,
Ongaro (2004) argues that the process owner must have authority over process aims
and staff resources. On the other side, Hertz et al. (2001) identify process managers
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Goncalves (2000) in Sentanin et al. (2008, p. 485) Lockamy and McCormack (2004, p. 275) Hertz et al. (2001, p. 138)
Stage A: no decisive steps towards a processbased
organization. Can only perceive their
manufacturing/core process
Ad hoc: processes are unstructured and ill defined.
Organizational structure is based on traditional
functions
Production orientation/functional organization:
focus on labor productivity, delivery to stock, and
product quality
Stage B: identified processes and sub-processes,
but focuses on functions. Started reducing
bottlenecks
Defined: basic processes are defined and
documented. Organizational structure includes a
process aspect
Stage C: identified and improved core processes.
Functional mentality with power in the functional
units. Might add technology to core processes and
eliminate non-value-adding activities
Linked: process management is employed with a
strategic intent. Broad process structures are put
in place outside traditional functions
(breakthrough level)
Cost orientation/project organization: focus on
delivery speed, total quality management and
process reengineering
Stage D: distribution of resources in core
processes. Appointment of process owner
responsible for managing each core process.
Traditional organizational structure. Success in
improving isolated processes
Integrated: organizational structure is based on
processes; traditional functions begin to
disappear. Process measures and management
systems are deeply embedded in the organization.
Cooperation with suppliers and customers on
process level
Stage E: organizational structure designed based
on the logic of core processes
Extended: multi-firm networks with collaboration
between legal entities built on trust and mutual
dependency
Network orientation/process organization: focus
on speed and precision, customer satisfaction and
network effectiveness
Table I.
Process maturity models
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without formal authority. Hammer and Stanton (1999) argue that the process owner
has to be a permanent role and must have the responsibility for and authority over;
designing the process, measuring its performance, and training the frontline workers.
From the case of a Brazilian research center, Sentanin et al. (2008) present a reason for
resistance to a process organizational structure among managers, as they lose authority
and power as well as their financial losses caused by the reductions of hierarchical levels
in the organization. The same line of reasoning is presented by Hammer and Stanton
(1999) who argue that it is usually senior functional executives who are the biggest
opponents to process management because of their loss of autonomy and power.
Another type of maturity model is presented by Hammer (2007) who describes the
features of process enablers and enterprise capabilities. The process enablers determine
how well single processes are able to function over time, and are presented as: design,
performers, owner, infrastructure, and metrics (Hammer, 2007, p. 113). Organizations
that are able to put the enablers in place are described to possess enterprise capabilities,
presented as; leadership, culture, expertise, and governance (Hammer, 2007, p. 113).
Further, Hammer (2007) presents four levels of maturity within each enabler and
capability. In an earlier paper Hammer and Stanton (1999) preset the infrastructure of
the process enterprise to be; measurements, compensation, facilities, Training &
Development, and career paths.
As presented above, there are several possible perspectives to be used when studying
the implementation of process management in organizations. The focus of this study, as
stated earlier, is the organizational structure, roles and responsibilities – corresponding
to the enabler “owner†and the capabilities of “leadership†and “governance†according
to Hammer (2007).
2. Methodology
The purpose of this paper and study is to explore and describe the implementation of
process management in order to increase understanding among practitioners and
researchers.Acase study approach is used, as it is an empirical inquiry that investigates
a contemporary phenomenon within its real-life context (Yin, 2003).
2.1 Purposeful selection
The selection and execution of the case studies were made in collaboration with a study
examining organizations using the SIQ Model for Performance Excellence as a tool for
quality improvement (Eriksson and Garvare, 2005). A multiple-case strategy was used
to get a more extensive picture of how the organizations have worked with process
management.
Figure 1.
I – A strictly functional
organizational structure
II – A matrix with both a process and
a functional organizational structure
III – A strictly process based
organizational structure
Notes: Three different organizational structures from a strictly functional organizational structure. (Stage I)
to a matrix structure with both a process and a functional organization (Stage II), and finally a strictly
process-based organizational structure (Stage III)
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Both managers and employees have been chosen as informants. The managers have
foremost been those responsible for the process management initiative. The employees
have been selected based on recommendation from the managers because it eases
the sampling process, but with the awareness of risk of bias. This is a kind of
triangulation in social sciences described by Johannessen and Tufte (2003) as looking
at a phenomenon from different perspectives.
2.2 Data collection
The primary sources for data collection in these studies have been interviews and
observations. This choice was made on the basis of wanting to hear the “stories†of
the organizations, and wanting to hear these stories from different angles. Before each
study, the organizations were contacted and agreed to participate in the study.
A date was set for the visit and the organization received information about the areas
that would be investigated. The interviews were prepared through tests of the questions
with colleagues. Case study protocols, stating what areas to investigate and questions to
ask, were used to ensure that the same procedures were followed at all the organizations.
This strengthens the reliability of the study, according to Yin (2003).
Semi-structured interviews were conducted with representatives from different
hierarchical levels, both managers responsible for the work with process management,
and employees who had been involved in the work. The visits to the organizations
were extended to one day, which gave time to observe and understand the environment
in the organizations.
In addition, Organization C has been closely examined over a period of two years
following the multiple-case study. For a period of three months in 2003 and between
September 2004 and February 2006, I was partly positioned at the company, actively
participating in the development of their process management work through action
research. This is important, as it enables access, collection, analysis, and validation of
empirical material.
2.3 Data analysis
When conducting data analysis, Yin (2003) suggests that there are two general
strategies when approaching the material: relying on theoretical propositions, and
developing a case description. In this paper, case descriptions were developed (see the
next section) as a means of presenting the material for the readers. The case descriptions
are based on transcripts of the interviews and notes from observations. Coding has been
used in the text analysis, with codes that evolved during the work (Miles and Huberman,
1994). The case descriptions have been analyzed using the frame of reference presented
in the earlier sections with results from previous, mainly empirically based, research.
A summary of the analysis is presented in Table II.
3. Results – case descriptions
3.1 Organization A
Organization A is a logistic company owned by the organizations whose products
they are transporting. In 2003, the turnaround was almost e1,700 million and they
had about 400 employees in Sweden. In 1994, the company was the first organization
in their branch of trade that received an ISO 9001 certification. At the time of the study,
they had a market share approaching 50 percent.
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Organization A Organization B Organization C
Purpose of process management Initiated by declining results and
demands for improved results from
new owner
Wanting to develop the organization,
not because of (external) pressure or
crisis
Aiming for 25 percent growth and 25
percent saving on total cost
Organizational structure Process organization in parallel to
functional organization
Process and competence organization
instead of functional organization
A matrix of functional organization and
process organization
Roles and responsibilities First approach:
Process owners. Working with flows
throughout the company, an “honorary
titleâ€
Functional managers. Budget and
staff
Second approach:
Functional manager also process
owner. Responsible for staff, budget
and performance
In each department:
Team leaders. Responsible for staff
Process leaders. Responsible for
development of processes, facilitating
process improvement groups of
employees
Process leaders, soon renamed process
owners. Former department managers
with new titles, responsible for
operations and performance of
processes
Competence owners. Responsible for
personnel, the whole individual
Process leaders. Reporting to process
owner, aided by improvement teams
that might include customers
First approach:
Functional managers. Responsible
for results, budget and staff
Process owners. Working part time
on improving the processes
Process developer. Part time,
supporting the process owner on
specific problems
Second approach:
Functional managers. Same as above
Process owner. Full time, without
process developer. Responsible for how
operations are performed and long-term
development
Team leaders. Coaching employees
day-to-day, short perspective
Changes at team level Very few changes at team level N/A Autonomous teams were tested with
mixed employees from different market
areas with the objective of aligning
procedures, and the ability to learn
from each other
Difficult to realize because of the need
to be placed closely with those working
with the same products to share
knowledge
Back in specialized teams
(continued)
Table II.
A summary of the
case studies of
Organizations A-C
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Organization A Organization B Organization C
Experienced results of process
management
Increased strategic understanding
A shared responsibility
Sharper economic control
Increased understanding between coworkers
from different departments
Easier to drive improvement
A more effective use of employees
A better general picture
A unified way of working between
market areas, standardization of w

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