The performance effects of process cascade-based organizational design

An organizational design based on process cascades is an approach where the business process design of the organization is based on internal customer-supplier relationships. The approach is based on the idea that, in general, each business process is activated by an order which is placed by another business process. The receiving process executes the order and delivers the results back to the ordering process. The ordering process therefore acts as an internal customer for the receiving process, which acts as an internal supplier. The approach is recursive, i.e. the supplier process may act itself as a customer process which places an order to a third process, and so forth. This paper discusses the idea of process-cascade based organizational design and empirically investigates the impact of such a design on firm performance. We find general support for this effect using carefully collected data from 114 manufacturing firms.