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.