Creating a Process and Organization Fit Index: an Approach toward Optimal Process and Organization Design

Abstract

Fitting organizational units to business processes and vice versa is critical to design optimal organizational structures and processes, which is very important for business process reengineering. Business processes and organizational structures are designed separately and independently, however, because there are very few studies to analyze the relationship between them for their effective design. This paper introduces an approach to evaluating the fit between business processes and organizational structures. An index is proposed to evaluate the process and organization fit in terms of the overhead incurred by organizational structures for transfers of work in business processes. Furthermore, indices for relatively evaluating the overall fit are proposed to compare alternative processes and structures. Finally, a case study is presented to illustrate the validity and applicability of the approach. The proposed indices will allow not only the rapid evaluation of alternative organizational structures and business processes but also the identification of problems that cause the lack of fit between them.