Value Orientation in Process Management

Hans Ulrich Buhl, Maximilian Röglinger, Stefan Stöckl, Kathrin S. Braunwarth
2011 Business & Information Systems Engineering  
There is no doubt that at least since the 1990s process orientation has evolved into one of the central paradigms of organizational design. Since then, all process management subtasks have matured. Process management decisions, however, lack economic foundation. They are usually based on qualitative or technical criteria or on plausibility considerations that do not necessarily comply with typical objectives in a market economy. Consequently, design alternatives are hardly comparable and an
more » ... grated valuation of a company's assets is impossible. The status quo is astonishing for several reasons: First, process management decisions usually imply investment projects with different risk/return positions and capital tie-up. Second, the need for designing processes according to their contribution to corporate objectives has been explicated repeatedly. Third, the paradigm of valuebased management is an accepted theoretical framework from economic research that enables to consistently valuate the risk/return effects of decisions across functional areas, hierarchy levels, and asset classes. This suggests the hypothesis that process management in general as well as the goal orientation of process management decisions in particular have evolved almost independently of value-based management. In the paper at hand, this hypothesis is confirmed based on a sample of process management publications. We therefore explicate the research gap as regards value orientation in process management. In order to bridge the gap between value-based management and processoriented organizational design, we transfer economically well-founded objective functions to process management decisions. Teaser: Although all process management subtasks have matured since the 1990s, process management decisions are usually based on criteria that only partially comply with objectives in a market economy. Relevant insights of economic research with respect to value-based management appear to be hardly considered. This hypothesis is confirmed by explicating the research gap with regard to value orientation in process management. To bridge the gap between value-based management and processoriented organizational design, economically well-founded objective functions are transferred to process management decisions. 1 Motivation and Object of Research More and more companies establish the role of a process owner at management level (BPM&O Architects GmbH 2009, p. 12), the majority of CIOs regard themselves as process owners (Witte 2010), and the continuous improvement of business processes has been taking a top position at CIO agendas for years (Capgemini 2006; Gartner 2010; Wolf and Harmon 2010) . The reason is that process orientationa flow-oriented and hence cross-functional way of thinking (Ferstl and Sinz 2008, p. 136; Becker et al. 2008, p. 4)has been central to organizational design at least since the 1990s. At that time already Hammer and Champy (1993) demanded that companies, in accord with their objectives, align more strongly with processes by using modern information and communication technology. At the same time, preliminary work on organizational theory (e.g., Nordsieck 1931; Kosiol 1976) was developed further in the German-speaking countries and approaches to process-oriented enterprise modeling as well as to application systems development were proposed (e.g., Ferstl and Sinz 1995; Scheer 1991; Österle 1995) . Moreover, it was critically discussed whether process orientation is a fad or not (
doi:10.1007/s12599-011-0157-5 fatcat:evbxizlaqbce3hpo32tsn3j4jy