Harish V. Ruparel
Powerica Ltd – Mumbai.
P. Corporate HR + Org. systems
PROCESS BASED ORGANIZATION & PERFORMANCE MANAGEMENT
In modern Business world, organizations are shifting towards the process based structures as they are more efficient than functional working. There are some obvious advantages
- No functional silos.
- Clear – cut responsibilities, giving no chance of excuse to any one
- Clear – cut authority to ensure effectiveness.
- Better span of control – not more than 5 – 6 people reporting to any one
- Delegation and accountability
Transforming from functional or product based organization to a process based organization needs significant changes based on careful consideration of both the pros & cons of each structure.
FUNCTINAL BASED STRUCTURE
- Activities or employees are grouped according to function.
- Functional expertise to support core competency.
- Focus on narrow range of skill or expertise.
- Applicable when technology is routine & small number of products.
- R & D
- Supply chain
PROCESS BASED STRUCTURE
- Business organized horizontally around linked & end to end process.
- Teams define the structure.
- Employees are empowered to decide at point of contact.
- Decentralizes with few supervisors.
- Functional expertise maintained through center of excellence.
- New product development (Innovation)
- Demand generation & customer acquisition & retention
- Order fulfillment
- HR & administration
|1. Ideal when specialized resources are required.||Difficult to manage for a big product range|
|2. Can be efficient given economy of scale &cost controls||Quick actions & decision difficult.|
|3. Collaboration &quality with each function.||Performance management difficult.|
|4. Supervision easier||Functional silos can be problematic|
|5. Easier to mobilize special skill|
|1. Customer forcus||Operating culture difficult to change|
|2. Focus on value chain & value addition.||Roles & responsibilities must be correctly redefined.|
|3. Productivity, speed, quality||Training very important|
|4. Empowerment||Co-ordination of center of excellence can be difficult.|
|5. Effective cost management|
BALANCED SCORE CARD
In the modern business scenario, companies are rated not only on the basis of top line & bottom line but on many other factors which are covered in this concept.
- The Learning and Growth Perspective
- The Business Process Perspective
- The Customer Perspective
- The Financial Perspective
For better management of performance the above guideline cane used to establish corporate goals & objectives & they must be cascaded down to the process owners & their teams for more effective business.