engleski

Business Process Reengineering Approach to Restructuring Large Enterprises in Transitional Economy

1. INTRODUCTION Restructuring of large enterprises is not a novelty in either economic theory, or practice. However, it has become a pressing problem in the transitional countries. In the Croatian economy, the amount of large enterprises in the total number of registered companies is not higher than 0.5%, but those companies employ 49.4% of the entire workforce, generate 46.4% of the total revenues, and own 69.6% of the available capital. At the same time, they are accountable for 47% of all the costs generated, and 50.7% of all the reported losses, which demonstrates their unsatisfactory performance. Such an unfavourable situation can be attributed to the internal weaknesses of these enterprises, of which the inadequate and bureaucratic organisational structure is an especially important factor. It is obvious that this kind of structure is not able to address the requirements of the contemporary business environment in transition. The intention of this paper is to propose the restructuring methodology based on reengineering (BPR), in order to achieve radical breakthroughs required for the success of the large Croatian enterprises, as well as to show how to successfully implement such a methodology. 2. ORGANISATIONAL RESTRUCTURING OF LARGE ENTERPRISES All the large enterprises should not be restructured by disintegration to a network of smaller enterprises because some of them will form the basic Croatian economic infrastructure. Consequently, some of these companies should be internally restructured in order to improve their management. This process can be achieved through a five-stage framework, which consists of : (1) identification of the existing organisational form, (2) analysis of the factors influencing the organisational design, (3) selection of the appropriate organisational form, (4) definition of the internal organisation and (5) implementation of the new organisational design. 3. APPLICATION OF BUSINESS PROCESS REENGINEERING TO THE ORGANISATIONAL REDESIGN OF LARGE ENTERPRISES In the context of restructuring, it is important to differentiate two levels of reengineering: macro-reengineering and micro-reengineering. Macro-reengineering rethinks the work at the corporate level, on the basis of evaluating the business processes both in terms of value-adding potential and strategic relevance. Only value-creating processes considered strategically important are worth performing inside the enterprise. They do not have to be reengineered (according to the micro-reengineering methodology) only if their performance satisfies the requirements of the world-class excellence. Processes which do not add any value whatsoever are eliminated, while strategically irrelevant processes which are still adding value should be outsourced (entrusted to an external partner company). Large enterprises are often criticised for being unresponsive to the customers’ needs, as well as for placing too much value on the internal procedures and policies. The functional organisational structure, based on hierarchy, is usually pointed out as the main source of such inadequate and sluggish performance. Although functional structuring of an organisation brings about the advantages of specialisation, it disregards the importance of workflows (business processes). Hence, it does not optimise the functioning of the enterprise as a system, which is the principal macro-reengineering promise. Figure 1.: Methodology for reengineering large Croatian enterprises Micro-reengineering rethinks the work at the level of an individual process: it engineers the process flow. A specific methodology for reengineering large Croatian enterprises, based on the synthesis of the traditional organisational design model and a “generic” reengineering methodology is proposed for this purpose (Figure 1). 4. POTENTIAL OUTCOMES OF REENGINEERING AND THE LESSONS LEARNED FROM THE MORE DEVELOPED ECONOMIES Although it is difficult to avoid a biased conclusion when discussing reengineering, we believe that it is an important tool for a professional aiming to implement restructuring. One should also take into account that reengineering is a potentially dangerous approach, which, in case of failure, leaves the enterprise with the torn organisational and social fabric. Therefore, we recommend a balanced and well-planned approach to the implementation of reengineering, based on the proposed methodology. SELECTED BIBLIOGRAPHY: Buble, M., Pavić, I., (1998): Organisational Approach to Restructuring of the Large Corporation in the Postsocialist Countries, in: The 3rd International Conference on Management (IMC 98), Theme: Management Developments in the 21st Century, Shanghai, China, July 25-28, 1998. Buble, M., (1998): Organizacijski pristup restrukturiranju velikih hrvatskih poduzeća, in: Buble, M., (ed.): Redizajniranje velikih hrvatskih poduzeća u funkciji razvoja, Ekonomski fakultet Split, Split, pp. 67-90. Hammer, M., Champy, J., (1993): Reengineering the Corporation: A Manifesto for the Business Revolution, Harper Collins, New York Hammer, M., Stanton, S., (1995): The Reengineering Revolution: A Handbook, Harper Collins, New York Keen, P., (1997): The Process Edge, Harvard Business School Press, Boston

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