The effects of process‐oriented organizational design on firm performance

Purpose Several organizations choose a process‐oriented organizational design as a source for competitive advantage. The purpose of this paper is to explore empirically the relationship between process orientation (PO) and firm performance. The paper considers PO as a multidimensional construct and examines how its underlying dimensions impact different aspects of organizational performance. Design/methodology/approach The paper uses an exploratory research design and investigates the effects of the different PO dimensions on profitability, customer satisfaction, product quality, and time‐based performance using a random sample of Austrian manufacturing firms. Findings The empirical findings reveal that process performance measurement, a process‐oriented organizational structure, the application of continuous process improvement methods, and – in particular – a culture in line with the process approach, are significantly and positively associated with organizational performance. Originality/value While a few studies examined the effects of PO on financial performance, there is a clear lack of quantitative studies investigating the effects of PO on other, non‐financial performance measures. In addition, since most of the existing studies treated PO as a single measure, there is a clear lack of studies that investigate the performance effects of individual PO dimensions. The paper incorporates the multidimensional nature of PO and examines the effects of individual PO dimensions on several firm performance aspects.