Process management, according to its proponents, is capable of improving business performance. This belief is not, however, accepted by all business scholars and practitioners. In fact, there are potential disadvantages of implementing a process management system. Managers who are considering implementing process management should carefully consider these potential disadvantages before making a decision.
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Process management is the formalisation of business practices. There are three stages to process management. First, the processes are mapped out so that the current way of doing things is understood. Secondly, improvements are made to these processes. Finally, these new processes are monitored to ensure that they are being followed properly. Popular forms of process management include ISO 9000 and Total Quality Management.
Are there Benefits?
According to proponents of process management, it has three important benefits. The first purported benefit is an increase in efficiency; process management is supposed to increase yields and reduce waste and rework in production. The second purported benefit is the creation of tighter intra-organizational linkages. The third purported benefit is that firms that are more efficient and have tighter intra-organizational linkages should be able to better produce goods that meet consumer demands. However, these purported benefits have not been conclusively supported by research, according to Mary J. Brenner and Michael L. Tushman's article, "Exploitation, Exploration, and Process Management: The productivity dilemma revisited," published in The Academy of Management Review in 2003.
Aside from the lack of evidence supporting the purported benefits of process management, there is evidence that process management can -- in some cases -- be harmful to businesses. This is because process management has a tendency to limit innovations. Innovations that occur through process management are usually only incremental. This means that radical innovation is unlikely to occur in a firm employing process management. Research by Brenner and Tushman suggests that firms employing process management will be less successful during periods of rapid change than firms who do not employ process management.
The solution to achieving the desired efficiencies of process management, without the disadvantages, is to build an ambidextrous firm. This is one that simultaneously manages exploration and exploitation. Research has found that ambidextrous firms that employ process management are able to achieve the purported benefits of process management, while avoiding the potential disadvantages, according to Brenner and Tushman.
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