The impact of business process orientation on financial and non‐financial performance

Abstract

Purpose – Extensive literature on business process management suggests that organizations could enhance their overall performance by adopting a process view of business. However, there is a lack of empirical research in this field. The purpose of this paper is to investigate the understanding of the process view and process maturity levels in a transition economy and to test the impact of process orientation maturity level on organizational performance. Design/methodology/approach – Empirical investigation combined an exploratory-confirmatory approach using factor analysis and structural equation modeling. Findings – The investigation confirms the impact of business process orientation on organizational performance in a transition economy. The link is even stronger than in the original investigation. The results show that business process orientation leads to better non-financial performance and indirectly to better financial performance. Practical implications – The research confirms that business process orientation is advantageous for companies since it has a positive influence on organizational performance. The finding that the impact on financial performance is indirect through non-financial performance suggests that the companies have to take that view of performance into consideration as well. Originality/value – The paper is valuable for academics and practitioners because the impact of business process orientation on organizational performance has been confirmed for a transitional economy. Its originality is in the measurement of organizational performance, for which a more detailed specification of organizational performance based on the balanced scorecard concept that includes non-financial performance measures has been used.