Examining the impact of business process orientation on organizational performance: the case of Croatia

Abstract

The competitive global market of the new millennium has raised awareness of business processes as the most important management paradigm. Extensive literature on business process management suggests that organizations can enhance their overall performance by adopting a process view of business. However, empirical research in this field is lacking. The aim of this paper is to examine the how business process orientation (BPO) impacts financially and non-financially organizational performance (OP) using empirical data from Croatian companies. A questionnaire survey was conducted on a sample of 127 companies in Croatia and propositions were tested using a structural equation model. The results suggest that the BPO practice relates positively to non-financial performance. In addition, the impact of non-financial performance on financial performance has been verified as well. This effect on financial performance is indirectly caused by non-financial factors suggesting that companies should view performance in such terms as well. The paper is valuable for academics and practitioners because the impact of BPO on OP is confirmed. An improved understanding and the clearly demonstrated financial and non-financial benefits of implementing and practicing BPO opens up a wider application of such systems in everyday business, which will eventually lead to their refinement and further development.