PROCESS BASED ORGANIZATION & PERFORMANCE MANAGEMENT

 

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

  1. No functional silos.
  2. Clear – cut responsibilities, giving no chance of excuse to any one
  3. Clear – cut authority to ensure effectiveness.
  4. Better span of control – not more than 5 – 6 people reporting to any one
  5. 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

  1. Activities or employees are grouped according to function.
  2. Functional expertise to support core competency.
  3. Focus on narrow range of skill or expertise.
  4. Applicable when technology is routine & small number of products.
  5. Functions-
  6. Finance
  7. HR
  8. Marketing
  9. R & D
  10. Operations
  11. Supply chain

PROCESS BASED STRUCTURE

  1. Business organized horizontally around linked & end to end process.
  2. Teams define the structure.
  3. Employees are empowered to decide at point of contact.
  4. Decentralizes with few supervisors.
  5. Functional expertise maintained through center of excellence.
  6. Processes
  1. New product development (Innovation)
  2. Demand generation & customer acquisition & retention
  3. Order fulfillment
  4. HR & administration
                     STRENGTH                                WEAKNESS
FUNCTIONAL

 

 
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  
   
PROCESS

 

 
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.

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.

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