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Organisation & Management. An international approachJos Marcus, Nick van Dam, Keith Medhurst
Chapter 8 | p. 395-413
Process control: the effective management of business processing by planning, coordination
and adjusting.
The process of input, transformation and output:
Input consist of four factors:
Labour: people.
Natural resources: raw material, semi-manufactured products, energy etc.
Capital: money, plant and machinery.
Information: about competition, demographic data etc.
Production factors (input) transformation (type of organisation) service and/o or
product (output).
Organisations are not only judged by their products and/ or services but also by the quality
of other outputs:
Labour: employees leaving the work force (through dismissal, retirement, long-term
disability).
Natural resources: waste, heat loss, noise, pollution, smell.
Capital: profit, depreciation of machinery etc.
Information: annual reports, public relations, advertising.
Types of business processes:
Primary processes: all activities that contribute directly to the making of the product
or service (purchasing, producing, selling and furnishing) and to the overall goal of
the organisation.
Secondary processes: include all activities that support primary processes, such as
management pf personnel, finances and data systems.
Administrative processes: all activities that direct the primary and secondary
processes and help to reach the organisation’s goal.
The tasks of administrative processes are:
Selection of strategy: during this process, a vision of the future is agreed upon and a
strategy is chosen.
Planning: to reach the goals set by the organisation, primary and secondary
processes need to be coordinated.
Structure: this is the setting up of a system within the organisation enabling people
and resources to be utilised.
Process control: processes can be executed in an appropriate and purposeful way by
planning, measuring, comparing and adapting the business.
, Organisation & Management. An international approach
Jos Marcus, Nick van Dam, Keith Medhurst
Business processes can be run effectively as long as the following control activities take
place:
Planning there must be a plan for managing the process.
Measuring and comparing this pertains to measuring of the business process and
comparing this with the norms and standards of the plan.
Adjustment this pertains to steps that need to be takes if limitations are
exceeded.
Business re-engineering: the organisational process is not seen as a system of separately
organised activities, but as a collection of core business processes that are related to each
other.
Core business: consists of a number of linked activities that give extra value to the buyer.
This added value can be measured using a combination of four criteria, quality, service,
expenses and cycle time. These criteria enable buyers to compare products and/ or services
supplied by different organisations and to then make a choice.
There are five basis principles that organisation need to uphold when they implement the
business re-engineering process within an organisation:
1. The customer is the centre of attention: everything begins and ends with the
customer.
2. Business re-engineering can be applied to all business processes: all activities are
focussed on increasing added value for the customer.
3. The improving of processes is a domestic affair: responsibility for this should not be
shifted to suppliers, although they must be involved.
4. Business re-engineering must be yield clear market results.
5. Business re-engineering is a phased process.
Value chain (Porter): indicates the amount of added value produced by the various parts of
the organisation.
Within the value chain a distinction is made between primary and support activities. Primary
activities are activities that add value directly to products. Support activities have supporting
roles. Examples of primary activities:
Inbound logistics purchasing and storage the goods needed for production.
Operations (production) transformation of the purchased goods into products
(packaging included).
Outbound logistics distribution of the products to the buyers (making up orders,
transport and storage).
Some examples for support activities:
Procurement the purchase of goods needed to the entire value chain.
Technological development research and development of products or processes.
Human resources recruitment, rewarding, training and motivating of the
organisation’s employees.
According to Porter, competitive advantage can be obtained in three ways:
1. The first strategy to run your operations again the lowest costs.
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