Relevance of organizational culture in context of BPR

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Business Process Reengineering (BPR) is a radical change in processes in order to achieve dramatic improvements in quality and reduction in cost and time. Organizational culture is one of the elements that have given an emphasis in preparing the organization for radical changes. Organizational culture is an essential supposition, principles, and viewpoint that are shared by its members which can also compel its member's attitudes and actions. Nowadays successful organizations are the ones, who are giving importance to their organizational culture because it's very much relevant with respect to adapting, organizing, reengineering processes and behavioral structures according to changing circumstances. Usually organizations skip this critical aspect and don't bother to consider the adaptability level that in turns affects its efficiency. The standards for adaptability are: Strong and committed leadership, Organizational learning, empowering behavior, Goals and objective alignment. Not only the Business Process Re-engineering (BPR) in the presence of these factors will be explored but also the other factors causing interdependencies will be researched. In order to achieve the successful dramatic improvement through Business Process Re-engineering (BPR), it is extremely complicated to achieve these factors effectively. If an organization wants to achieve these factors then it must look into its culture for a better understanding of how the process transformations could be successfully implemented.

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Key Words: Business Process Re Engineering (BPR), Organizational Culture, Empowerment, Structural Equation Modelling (SEM).

Introduction

"The dinosaurs disappeared because they could not adapt to their changing environment.

We shall disappear if we cannot adapt to an environment that now contains spaceships,

computers and thermonuclear weapons."

(Clarke, 1917; Famous Motivational & Inspirational Quotes, 2007)

Business Process Reengineering (BPR) is a radical change in processes in order to achieve dramatic improvements in quality and reduction in cost and time (Hammer & Champy, 1993). Organizational culture is one of the elements that have given an emphasis in preparing the organization for radical changes. Organizational culture is an essential supposition, principles, and viewpoint that are shared by its members which can also compel its member's attitudes and actions (Schneider, Brief, Guzzo, 1996)

"The only thing of real importance that leaders do is to create and manage culture."

"If you do not manage culture, it manages you, and you may not

even be aware of the extent to which this is happening."

(Edgar Schein, professor MIT Sloan School of Management; Famous Quotes on Culture, 2010)

Nowadays successful organizations are the ones, who are giving importance to their organizational culture (Pirayesh, Narges, and Sareh, 2009) because it's very much relevant with respect to adapting, organizing, reengineering processes and behavioral structures according to changing circumstances. Usually organizations skip this critical aspect and don't bother to consider the adaptability level that in turns affects its efficiency. The standards for adaptability are: Strong and committed leadership, Organizational learning, empowering behavior, Goals and objective alignment.

Not only the Business Process Re-engineering (BPR) in the presence of these factors will be explored but also the other factors causing interdependencies will be researched. In order to achieve the successful dramatic improvement through Business Process Re-engineering (BPR), it is extremely complicated to achieve these factors effectively. If an organization wants to achieve these factors then it must look into its culture for a better understanding of how the process transformations could be successfully implemented. Parker (1996) also agrees with the same concept that for the successful implementation of BPR, the organization must create a new culture or face the business challenges (p. 166). These challenges leads towards organizational change, the existing culture contains beliefs and values that are often no longer appropriate or useful in the re-engineered environment. Therefore organisation must understand the relevance of organizational learning, committed leadership, empowerment and organizational goals alignment that are created by the newly-redesigned processes (Pirayesh, Narges, and Sareh, 2009).

If the leader is highly attached to their commitment then it leads to support and encouragement in employee involvement and improves employee's decisions making quality. However, suitable behaviors, necessary amendments in the organizational culture influence an organization adaptability to build up new conditions and structures according to the BPR. So a culture which upholds the change is established effectively (Bruss and Roos, 1993) because organizational culture influences the organization's ability to change. The implementation of a BPR project requires demanding organizational changes that has been difficult to achieve. This paper is an attempt to study an organizational culture that is necessary for successful BPR implementation. In addition, several researchers suggests, there is a relationship between an organizations culture and the performance improvements due to BPR (Mashari, Zairi, 1999)

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"The most common cause of executive failure is inability or unwillingness to change

with the demands of a new position. The executive who keeps on doing what he has

done successfully before is almost bound to fail."

(Drucker 1909 - 2005, Famous Motivational & Inspirational Quotes, 2007)

The aim of the present study is to undertake a comprehensive empirical study, to find out the influential relationship of the organizational cultures in the context of BPR. The study also shows the relation of these two parts by a mathematical function

In this research, relevance of organizational culture will be taken into consideration to dig out the factors that are affecting the efficiency of BPR in a fundamental ways.

This paper has been organized in the following way to give a organize effect to the reader. Part 1 introduces the rational and background of the topic: what is organizational culture and why we need in the context of BPR, what is its importance. Finally, the research purpose is stated. Part 2 describes the literature review of organizational factors and work that has been done in the context of BPR. Part 3 describes the research method of proposed solution. Part 4 describes the results. Finally, discussion, conclusion and summary are discussed in Part 5.

Research purpose

An effective completion criterion for BPR planning is to ensure that the following questions are addressed:

1. Are the project objectives clearly driven from the organization strategic goals and operational objectives?

2. What are the key factors of organizational culture that are affecting in successful implementation of BPR?

3. Is the organization ready to accept BPR implementation?

Literature does not depict any research study of organizational culture in the context of business process re engineering by focusing Pakistan. Therefore, this study intends to fill the knowledge gap that exists in mentioned areas.

This paper has been organized in the following way to give a smooth effect to the reader.

Part 1 introduces the background of the topic: what is moral imagination and why we need this, what is its importance. Finally, the research purpose is stated. Part 2 describes the literature review and also focuses on the review of work related to the topic. Part 3 describes the research method of proposed solution. Part 4 describes the results. Finally, discussion, conclusion and summary are discussed in Part 5.

Literature Review

In the successful implementation of BPR, Organisational culture is a critical aspect (Hammer, Champy and Davenport, 1993; Zairi, 1995). Usually the concept in newly re-engineered organisation is that people share common goals and works in a collaborative environment instead of challenging their colleagues (Andrews and Stalick, 1994). Teng, Jeong and Grover (1998) searched for variations and modifications in roles and tasks, measurements and rewards, organizational structure, information technology, shared principles, accomplishments and procedure progress to integrate with supposed intensity of achievement and goal completion of a BPR plan. Within the organizational procedure BPR is an innovative idea with the proper utilization of information technology.

For the successful implementation of BPR, there is a need to have a flexible culture but with the proper control on all the activities. In addition, successful organizational change is possible only with the collaborative environment where there is an equal chance for employees to take participation in all the activities. Some of the organizational culture considers the political aspect because it influences organizational culture up to some extent.

The same concept was supported by Davenport, Hammer and Champy and they have given importance to the culture aspect because day by day it is becoming the core part of any organizational culture to explore the techniques and tools that enhance the adaptability level an organization to accept change. According to Hammer and Champy (1993) 70 percent of the organizations are not able to attain the desired dramatic results. One of the major issues faced by management is the lack of top management commitment which reflects failure to implement BPR effectively (Alter, 1994). The findings of the entire above researcher depicts that the critical analysis of BPR implementation is the key to. BPR has huge potential for raising efficiency all the way through cutting down the process time and cost, enhancing quality, and satisfying customer, but it frequently requires a fundamental organisational change.

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On the basis of various empirical studies few factors are listed below that are considered to be the critical factors in the successful implementation of BPR. They were then categorised into a number of subgroups representing various dimensions of change related to BPR implementation. These dimensions are:

Learning organization

The behaviour of the organization should be flexible and to adopt the required changes that are occurring in the environment. This involves the disarticulation of goals, organizational learning and the conversion of new organizational structures and processes (Simon, 1994).The idea of a learning organization was written in the 1920s and 1930s on learning organisms and learning systems. For increasing the learning capability, it is very much essential to: realize how dissimilar people gain knowledge either individually or in groups, and to understand how enhanced learning can assist (Coulson-Thomas, 1992). At the direction stage if there is a lack of focus on learning processes then it depicts that there is a general lack of understanding on the part of directors and boards of issues and processes related to their own and organizational learning (Coulson-Thomas, 1996). Benchmarking is one of the best procedures to learn from customers and competitors (Rastogi, 1994; Jackson, 1997). For the successful implementation of BPR customers' needs and expectations should be properly identified and evaluated (Hall et al., 1993) and all the procedures should be customer oriented (Rastogi, 1994). Through benchmarking an organization will be able to learn from other organisations' experiences in BPR like what were their success factors and failure factors (Caron et al., 1994).

Knowledge management

For the realization of specific organizational goals knowledge management activities are planned. Therefore it the utmost obligation of the knowledge management structure to create a relationship in between knowledge management activities and organisational goals or objectives and this was supported by Davenport et al., (1998) and also proved as a knowledge management success factor. So it should be incorporated with it. Knowledge management is not only dependent upon hidden knowledge management activities, but it also depends upon other success factors and other related systems. It was proved by immense studies that there is strong linkage between culture (Fahey, 2000; López et al., 2004) leadership (Viitala, 2004), or a combination of factors (Davenport et al., 1998; Gold et al., 2001)

Empowerment

Empowerment is one of the critical success factors of BPR. Empower their lower level employees that they can take decisions at their own. By doing this they will feel sense of responsibility and try to sought out the issues (Thomas, Bashein et al., 1994). They will set their own goals and objectives and try to achieve them at the specific time; they will evaluate their own performance and identify the issues that are affecting their performance, with the help of doing all this they are supporting BPR efforts.

Employee involvement

Employee involvement is the critical success factor of BPR because with the involvement of all the people, problems can be easily handled and this is possible only when there is a culture of openness. (Berrington and Oblich, 1995; Bashein et al., 1994; Bruss and Roos, 1993) and they feel free to share their problems with their leaders on all the stages of process.

Training and development

Training and education is considered to be another success factor of BPR implementation (Berrington and Oblich, 1995; Zairi and Sinclair, 1995, Bashein et al., 1994).

Committed leadership

Commitment leadership is very much necessary in the top management for the successful BPR project (Hammer and Stanton, 1995; Jackson, 1997; Bashein et al., 1994; Cooper and Markus, 1995, Rastogi, 1994; Zairi and Sinclair, 1995). Leader has a very influential role in the success of BPR projects (Holland and Kumar, 1995; Zairi and Sinclair, 1995) leader should have some qualities like "strong" (Jackson, 1997), visible (Jackson, 1997; Bashein et al., 1994) "and creative in thinking and understanding" (Hammer and Champy, 1993) as to give understandable wider vision of the future. Commitment to (Berrington and Oblich, 1995; Dixon et al., 1994) the change is vital and it is required from senior management in the BPR project (Dixon et al., 1994). Innovative, imaginative thinking and a clear and convincing vision is required for the successful implementation of BPR (Bashein et al., 1994; Jackson, 1997; Barret, 1994).

Setting performance goals and measures

For the achieving the high level of performance there is a need to set high level goals (Hagel, 1993; Guha et al., 1993) for BPR projects.

Level of achievement is also indicated by distinguishing and setting performance evaluators (Zairi and Sinclair, 1995; Guha et al., 1993). For getting competitive edge in the market, corporate strategies and goals should be properly identified and guidance should be provided that on how organisational capabilities can be best utilised.

Conceptual Framework

Based on the literature review the conceptual frame work was designed. To analyse the complex relationship between the variables Structure Equation Modelling (SEM) methodology was used. SEM is used to expose items that pertain to separate factors but overlap in ordinate. SEM analyses the error terms, which provides additional information and enhances power. In addition, SEM presents many fit indices, which can be used to ascertain which variables should be included (Suhr, no date; Teo and Khine, 2009; Jackson et al., 2005; Hooper, et al., 2008; Hoe, 2008; Stephenson, et al., 2006).

The purpose of this research study is to examine the empirical influence of organizational culture on Business process re engineering. The different underlying influencing factors of organizational culture are mission alignment, empowerment, committed leadership, organizational learning.

Committed leadership is significantly associated with empowerment, Empowerment is significantly associated with mission alignment, committed leadership is significantly associated with mission alignment, committed leadership is significantly associated with BPR, Organizational learning is significantly associated with committed leadership, Organizational learning is significantly associated with BPR and Mission alignment is significantly associated with BPR.

Figure: 1

Research Hypothesis

This research aims to investigate the association between moral imagination and management decision-making and its dependent factors. Therefore, based on the proposed conceptual framework, the following two hypotheses were developed.

H1: Committed leadership is significantly associated with empowerment.

H2: Empowerment is significantly associated with mission alignment.

H3: Committed leadership is significantly associated with mission alignment.

H4: Committed leadership is significantly associated with BPR.

H5: Organizational learning is significantly associated with committed leadership.

H6: Organizational learning is significantly associated with BPR.

H7: Mission alignment is significantly associated with BPR.

Study Design and Methodology

The research is Quantitative type because the survey based instrument was used to quantify the results this.

Population

The population for this research study will be employees of all categories top, middle and low because all of them are involved in the radical change of organizational culture. Telecom sector will be targeted; the reason for targeting this sector is that they are widely affected by dynamic change.

Measurement instrument

Research will be conducted by survey method using questionnaire as this method is convenience in terms of mobility and time that is every element has an equal chance of being selected. Questionnaire will be developed by taking the variable items from different literature. Before finalizing the questionnaire content validity, face validity and pilot testing will be done. For descriptive analysis and hypotheses testing, SPSS and Liseral software will be used respectively (Usluel et al., 2008).

Data Collection

Simple convenient sampling will be used for data collection. Two methods will be adopted for data collection like the questionnaire was web based so the responded replied through the web link, self administered and through emails.

Sample

The sample will be taken on convenient basis from employees, managers and all of all categories top, middle and low because all of them are involved in the radical change of organizational culture, that will be from different telecom sector of Pakistan. The respondents will be both males and females of different ages and belonging to any race, socio-economic status and background.

Validity

The initial draft of the questionnaire will be floated for the purpose of content validity, for which views will be collected from the scholars as well as potential respondendents. Based on their view various items will be omitted, modified and even few more questions can be added. Conetnt validity will be done through nine scholars, five from academic experts and four from expert practitioners. After the changes recomended by scholars, questionnaire will be floated to different organizations for pilot testing. Data collected for pilot testing will be checked for reliability.

The sample size for pilot testing will be 15 and on the basis of results generated internal consistency of data will be measured. If the variables will not met the cut of value (0.65) which is acceptable for retaining the variable then they will be discarded (Leech et al., 2005).

Reliability

Reliability test will be used to measure the internal consistency based on computed values of Cronbach alpha (α). If the variables will not met the cut of value (0.65) which is acceptable for retaining the variable then they will be discarded (Leech et al., 2005).

Factor Analysis

The purpose of using factor analysis is to investigate the large number of relationships among inter-level variables. For factor loading principle component analysis method will be used. Less than 0.40 of items values will be omitted and would not be used for further analysis (Leech et al., 2005).

KMO stands for Kaiser-Meyer-Olkin Measure of Sampling Adequacy. KMO indicates sufficient items for each factor. If the values of variable will be found greater than 0.75 then it will be utilized for further analysis. If the value of Bartlett will be less than 0.05 then it should be significant and indicates that the correlation matrix is significantly different from an identity matrix, in which correlations between variables are all zero (Leech et al., 2005).

Data Analysis

Descriptive Analysis

The entire respondents will respond through web-based survey, by emails and by visiting the respondents personally. Demographic data will indicate their gender, qualification, designation, experience, age, and department.

Correlation

Pearson Correlation will be used to check the correlation among the variables. It will be analyzed that whether variables are associated with each other and have significant correlations or not (Leech et al., 2005).

Hypothesis testing

A structural equation modeling technique will be used to test the model. The LISREL 8.80 program will be employed for this purpose (Usluel et al., 2008; Teo and Khine, 2009; Jackson et al., 2005; Hooper, et al., 2008; Hoe, 2008; Stephenson, et al., 2006).

The observed variables used to predict the latent variables in structural equation modeling were obtained by processing the data in the instrument (Usluel et al., 2008; Suhr, no date; Teo and Khine, 2009; Jackson et al., 2005; Hooper, et al., 2008; Hoe, 2008; Stephenson, et al., 2006).

The observed variable participative decision making, training and development and employees involvement will predict the latent variable empowerment,

The observed variable objectives and goals, planning and performance will predict the latent variable mission alignment

The observed variable knowledge management and customer focus will predict the latent variable organizational learning

The observed variable management support, creative thinking and high level communication will predict the latent variable committed leadership.

These variables will be calculated using the relevant items as a result of the factor analysis carried out on the items, in the data collection tool, which tend to explain the purposes organizational culture on BPR.

Equation for path analysis is as follows,

Measurement paths

Z1 = βΓ11 Y1 + βΓ12 Y2 + βΓ13 Y3+ E1 ……………………………….. (1)

Z2 = βΓ24 Y4 + βΓ25 Y5 + βΓ26 Y6 + E2 ………………....………......... (2)

Z3 = βΓ37 Y7 + βΓ38Y8 + βΓ39Y9 + E3 ………………....………............ (3)

Z4 = βΓ49 Y9 + βΓ410 Y10 +E3 ……………............................................ (4)

Structural Paths

Z1 = βΓ12 Z2 + βΓ13 Z3 + βΓ15 Z5+ E1 …….…………..………………. (5)

Z2 = βΓ23 Z3 + E2 ………………....……............................…............... (6)

Z3 = βΓ35 Z5 + E3 ……………….................................…….................. (7)

Z4 = βΓ41 Z1 + βΓ45 Z5 +E3 ………………............................................. (8)

7 fit indexes which are commonly used in the literature (x²/d.f, GFI, AGFI, NNFI, CFI, RMSR, RMSEA) were employed to test model fit. According to Usluel et al., (2008) the best fit were acquired when all the seven fit indexes meet the cutoff values that were acknowledged in the literature. The commonly used measures of model fit, based on results from an analysis of the structural model, are summarized in table. In practice, Chi-square / degrees of freedom less than 3, GFI, NNFI, CFI greater than 0.9, an AGFI greater than 0.8, RMSR less than 0.1, and RMSEA less than 0.06 or 0.08 are considered indicators of good fit. As seen in table:1, all goodness-of-fit statistics should be in the acceptable range (Usluel et al., 2008; Suhr, no date; Teo and Khine, 2009; Jackson et al., 2005; Hooper, et al., 2008; Hoe, 2008; Stephenson, et al., 2006; Halim, 2006). Table 2 shows the seven fit indexes of the model.

Table: 1

Summary statistics of model fit

Fit Index

Recommended Value Observed Value

Chi-square/ degrees of freedom

≤3.00

GFI

≥0.90

AGFI

≥0.80

NNFI

≥0.90

CFI

≥0.90 or ≥0.95

RMSR

≤0.10

RMSEA

≤0.06 or ≤0.08

GFI = goodness-of-fit index; AGFI = adjusted goodness-of-fit index;

NNFI = non-normed fit index; CFI = comparative fit index;

RMSR = root mean square residual;

RMSEA = root mean square error of approximation.

For hypothesis testing Structure Equation Modelling (SEM) will be deployed.

Implications

The investigation of this study arises many interesting implications for business, research and education. This study has contributed in creating knowledge. The key contribution will be the development of research instrument that addresses the concepts and that will be supported by acceptable values of reliability and validity from experts.

This study is very beneficial from managerial point of view because practitioners can consider these dimensions while implementing BPR so this will play a significant role in the increase the productivity of organization.

Successful BPR implementation is possible through trainings, workshops and other mentoring and coaching programs that organizations should be organize to increase the level of understanding of employees.

This study besides its academic worth has its managerial implications as well. For business education, such kind of case studies is added up in the curriculum that raises the students' ability to accept dynamic change promptly. Case studies should be given to students to increase their ability. Role playing can play a critical role in raising student's level of adaptability for change (Shammari, 2005) because according to Gordon (1999) 80 per cent of knowledge we learn from our experiences. It is very much difficult and painful to change the faculty habits and attitudes and to train them to adopt new teaching techniques for the successful implementation of BPR course (Shammari, 2005)

On the other side there is some responsibility of institutions also that they must revise their academic programs and must add up new courses like BPR. Institutions can help by graduating students who are trained enough with holistic business management &IT skills that meet up the market requirements & the expectations of their employers (Shammari, 2005). Normally business organizations are giving preference to their own needs and wants instead of their stake holders and they are giving more preference to their strategic interest of their business. This research study helps in knowing the factors that have some impact on successful implementation of BPR. So it is the utmost desire of the changing environment to adopt new techniques in delivering lecture to raise the understanding and adoptability level of their students.

Limitations

The results of the study will be, limited to telecom sector because of the time and cost constraint. Hence the findings cannot be generalized to the every type of industry in Pakistan. However, seeing the exploratory nature of the study requires further research to have a clear and broader picture of the relationship and factors that affect the organizational culture in successful Business Countries may be not a wise idea as the economic and political situations are very much different among the third world countries.

It will process re engineering implementation. We believe the results can still offer important guidelines for replicating the study over a sample of small firms. The sample size is another limitation of this study due to time and financial constraint however the response rate should be good enough to generalize the results.

The results from a larger and heterogeneous sample might provide a better basis to refine the theoretical model. Moreover, this study makes an initial step for a survey instrument that measures and operationalizes key variables related to organizational culture and BPR.

Future Research Prospects and Conclusion

This study can be enhanced by further targeting different types of organizations of Pakistan because organizational culture varies with different types of organizations. But of course it will certainly need more time and financial resources. It can also be used to find out different dimensions of organizational culture in depth and also compare the role of organizational capabilities in BPR. Moreover, future studies can explore the role of organizational cynicism, which might affect the successful implementation of BPR.

New instrument will be developed to measure the impact of organizational culture in successful Business process re engineering implementation; the instrument will help to quantify the results and finding of the research.

Therefore, this study will help in filling the knowledge gap exists in such mentioned areas, particular no empirical research was done on that topic in Pakistan. So objective of the study is related with the entire hypothesis mentioned below that are H1: Committed leadership is significantly associated with empowerment; H2: Empowerment is significantly associated with mission alignment; H3: Committed leadership is significantly associated with mission alignment; H4: Committed leadership is significantly associated with BPR; H5: Organizational learning is significantly associated with committed leadership; H6: Organizational learning is significantly associated with BPR; H7: Mission alignment is significantly associated with BPR.