The influence of process-oriented organisational design on operational performance and innovation: a quantitative analysis in the financial services industry

Abstract

Market competition requires that organisations excel at both operational performance and innovation. Though process orientation is intended to benefit operations in general, the impact of specific elements remains unclear. The purpose of this study is to identify the specific organisational design components of process orientation that simultaneously influence operational performance and innovation. We survey employees in the financial services sector (N = 1069) regarding the influence of six process-oriented organisation design components on operational performance and innovation using PLS-SEM. The results indicate that organisational structure and process improvement encourage both operational performance and innovation. Personal autonomy is partially beneficial, while the others have no joint influence on operational performance and innovation. This study is first in providing evidence regarding the influence of a broad variety of organisational design components of process orientation on operational performance and innovation. The study contributes to theory on how process orientation improves operational performance and innovation. The findings can serve as a guideline for managers and organisations as to which organisational design components should be implemented to improve operations.

Keywords:

• performance management
• innovation management
• structural equation modelling
• processes
• work organisation
• financial services

Notes

1. Note that, in total, the survey was sent to 58,847 e-mail addresses and 1069 individuals filled in the questionnaire; i.e. the response rate was 1.8%. Comparable surveys in the financial services industry report similar response rates (e.g. Leyer and Moormann (2014) report a response rate of 3.7%). Higher response rates were achieved in studies that used personal letters with reminders (Hadid et al. 2016 report a response rate of 9.9%) or that focused on one particular company (e.g. Hansen reported a response rate of 36.8%). However, given that we relied on a mailing list and had no particular management support, the response rate appears to be reasonable.