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The book "Reengineering the corporation - A manifesto for Business Revolution"

How can the business or company be constantly growing, highly competitive, and
victorious in a volatile and increasingly competitive market economy is a constant concern of
business owners, company leaders, as well as the managers. That is also the eternal problem
posed for scientists about economic management. There has emerged a new concept and
perspective on the way of operating and organizing the management of modern businesses
and companies which is called “reengineering". The book "Reengineering the corporation - A
manifesto for Business Revolution" by Michael Llammar and James Champy, was first
published in 1993, presents concepts, perspectives on how to organize and manage a modern
business and company to adapt to the new requirements of business, under the influence of
information technology. Moreover, based on the practical experiences of successes and
failures of many companies in the US, the authors generalized and drew general principles to
help businesses and companies do business.

The reengineering concept

To be successful in today’s business, the corporation must ensure its organizational
structure and business model is fast, low cost, flexible and delivers high quality consistently.
However, the traditional businesses are unlikely to be able to meet these requirements due to
the inappropriate method of management. Therefore, a complete and sweeping redesign is
called for. Reengineering can deliver those changes.
According to Hammer & Champy (1993), Reengineering is defined as “the
fundamental rethinking and radical redesign of business processes to achieve dramatic
improvements in critical, contemporary measures of performance, such as cost, quality,
service, and speed.” The concept includes four important key elements: fundamental, radical,
dramatic and process.
A focus on fundamentals: identify the problem exactly what the company does, why
it is being done in the current way and what are the implicit rules and assumptions embedded
in current practice. Reengineering ignores "what is" and focuses on "what should be".
A radical redesign: reengineering is about reinventing the business - not creating
superficial changes or marginal improvements to old methods.
Dramatic improvements: reengineering leads to quantum leaps in performance, not
incremental improvement.
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Business process orientation. Reengineering develops around business processes -

not about tasks, job descriptions, people, or structures. A business process takes an input or
an input and creates valuable output for the customer, which works only if it creates added
value.

Types of companies that takes reengineering program

Basically, there are three types of companies that undertake intensive reengineering
program:
1. Companies stuck in deep competition. The situation requires a degree of
improvement in the operations so that the corporation can be able to compete with
others in their field.
2. Companies that are not yet in trouble but whose management has the foresight to
see trouble coming and want to begin reengineering before all competitive
advantages evaporate.
3. Companies have been in the peak, leading the competition, however, managers are
ambitious and aggressive, they see reengineering as a way to position the
company to extend their lead over their competitors.
However, the reengineering concept should not be confused with automation. as
automation just simply provides more efficient ways of doing things. Moreover,
reengineering is not about restructuring or downsizing. Because restructuring and downsizing
are just terms for reducing capacity to meet lower demand. Downsizing and restructuring
only mean doing less with less. Reengineering, by contrast, means doing more with less. In
addition, reengineering is different from total quality management (TQM). While TQM seeks
to enhance and improve the existing processes, incremental improvements while
reengineering seeks to discard existing processes entirely and replace them with break-
through processes delivering leaps in performance.

Characteristics of a reengineering corporation

Reengineering makes several jobs combined into one.In the traditional approach,
there are many people involved in a process, no one is accountable for the work. Therefore,
this results in the errors, delays and inefficiencies of hand-offs. However, reengineering
programs combine process steps and make a team directly responsible for creating a satisfied
customer.
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Furthermore, workers are enabled to make decisions. Companies practice

reengineering not only compress processes horizontally but also vertically. Workers go up the
managerial hierarchy and make their own decisions. Therefore, the advantages are fewer
delays, lowering of overheads and fixed costs, better response to customers and workers are
empowered to create value.
In addition, the works are performed logically and naturally. Instead of doing tasks
step by step, most reengineering processes allow multiple jobs to be completed
simultaneously, and the series of activities to be organized logically. The benefits of this are
more gets done by fewer people.and the possibilities of obsolescence or reworking are
reduced
Reengineering makes work units change from functional departments to process
teams. Moreover, jobs evolve from narrow and task-oriented to multidimensional tasks.
Before reengineering, workers perform one task repetitively day after day without knowing
the “big picture” of the work. After reengineering, each worker is familiar and able to
perform every step in the process. Therefore, work becomes multi-dimensional, more
rewarding and more closely linked with the end result.
Reengineering also makes people in the organization become empowered rather than
controlled. Additionally, the organizational structure changed from a hierarchy to a flatter
arrangement. The role and purpose of the manager changes from supervisor to coach; people
in the organization focus on pleasing the customers, not the boss.
Furthermore, value changes from productive to protective. In a protective
organization, manager wars with their peers to blame for problems, jurisdiction, fault and
allocation of resources. In a productive culture, reengineered company, everything in the
value system is centered around the creation of customer value. Changing corporate value
systems is a big part of reengineering programs.
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Key roles in reengineering program

The leader will assign the process owner, who will call up a reengineering team to
reengineer the process, with assistance from the czar and under the auspices of the steering
committee. In the process, the leader is a senior executive who has enough credibility to lead
the organization. The leader must also be a consensus builder, persuading people to accept
the disruptions reengineering will bring. Process owners is the senior manager, familiar with
one of the functions in the process that will undergo reengineering.

Keys to reengineering success

Initially, corporations should see customers as their focus, start with the customer and
work backwards. The only reason can help a company survive is pleasing customers.
Therefore, reengineering means a realignment of the company’s resources towards the goal
of meeting the needs of the customer.
Additionally, organization should move fast as reengineering is a dramatic, radical
process. Reengineering must be achieved quickly and decisively, otherwise the internal
resistance would prevent from achieving the result.
Moreover, business should tolerate risks. Change is not easy, the risk averse people
may feel disoriented and disenfranchised. Therefore, managers persuade and show the
greatest risk of sticking with the status quo. If people can be convinced ‘‘business as usual’’
probably means being unemployed soon, they’ll accept the changes.
In addition to that, not everything is perfect. That means there will be partial failures
along the reengineer way as a normal. However, the crucial thing is not to avoid mistakes but
to learn from them and move on.
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Last, many organizations stop reengineering as they see the first sign of success. The
others stop when they face the very first problems. Both cases equally hurt the long-term
success of the organization. The accomplishments always require perseverance and patience.

Summarise the key issues of Job analysis

The chapter provides discussion of analysis and design of works- crucial components
in the strategy implementation process. It flows from the “big picture” of the way the
company operates (work-flow analysis and organizational structure) to specific issues of job
analysis and job design, to understand how business strategy can affect the design of work
and examine how analysis and design of jobs can support the strategic plan.

Work-flow analysis
The center of the work-flow process lies on the tasks involved in company’ procedure
of operation. The thorough analysis of this will guide decisions related to appropriate
allocating and assigning tasks to jobs and employees. The work-flow process begins with
analyzing work outputs- the products and services that are viewed in customer perspective.
The standards for the quantity or quality of outputs are needed to be specified to ensure
address customer criteria and therefore, serve them efficiently and satisfactorily.
Once the outputs have been identified, all tasks included in the production of the
output are examined. The whole process of output development is divided into several stages
and at each stage, positions are formed and employees are allocated to be in charge of
positions based on their ability to perform the tasks.
The final stage in work-flow analysis is to identify the inputs needed in the
production. These inputs include both raw materials, equipment and human skills.
Specifically, materials which will be converted into product units, technology and machinery,
and human skills and efforts are examined in order to well manage inventory, increase
productivity and support administrative positions.

Organization’s structure
The term refers to “the relatively stable and formal network of vertical and horizontal
interconnections among jobs that constitute the organization” (Noe et al., 2019). There are
two broad dimensions of structure. While centralization indicates the dominant authority in
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making decisions of top levels, departmentalization features the similarity of functions and
work flow between units.
Functional structure represents the configuration of the relative high level of
centralization. In this structure, the hierarchy is clearly defined with the highest position
typically belonging to the president, then down to the vice president of departments and
continuing within each department. Its major advantage is to formulate focused vision and
standardize the operation procedure, thereby enhancing the uniformity of action and
facilitating the cooperation between departments. However, under this structure, members of
the unit may have a weak conceptualization of overall business, therefore when the decision
they made might not benefit the organization as a whole.
Divisional structure is the example of departmentalization. Companies following this
structure base on product, geography, or client to separate work units. Although it offers
flexibility, innovation and faster adaptability, the possibility of redundancy should be
carefully concerned.
In overall, both of two approaches have their own benefits and drawbacks. Therefore,
these two approaches need to be examined and understood with respect to the firm's strategy
and its competitive environment.. Centralization is more appropriate in stable environments
which can be well anticipated and standardized and cost-leadership oriented. In contrast,
departmentalization is more desired in unpredictable environments and helps to gain
differentiation advantage.

Job analysis

After understanding the entire work-flow process with respect to the organization
structure, managers need to maximize the efficiency and effectiveness of this process. This
can be achieved by getting detailed information about jobs existing in the work units and job
analysis is the tool for them to gain this information. Therefore, job analysis has a significant
impact on human resource management activities: work redesign, human resource planning,
selection, training and development, performance appraisal, career planning, and job
evaluation.

There are two pieces of information of job analysis that are useful to human resource
management: job descriptions and job specifications. Indeed, the tasks, duties, and
responsibilities listed guide the evaluation of individual performance related to job
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requirements; and the list the knowledge, skills, abilities, and other characteristics that is
necessary for successful job performance set up core competencies of human capital.

The process of analyzing jobs starts with obtaining information. It is conducted via
multiple sources which are suitable for different situations. Job incumbents would provide the
view of what and how jobs are actually done, the risk-related factor and informal social
network in the workplace environment. Additionally, supervisors can be asked about what is
supposed to be done, customers are a good source for service jobs and external job analysts
can help with analyzing skill levels. On the other hand, position analysis questionnaire and
occupational information network are instruments to capture broad approaches, task-focused
approaches, and person-oriented approaches to conduct job analysis.

Job design

In the previous parts, work management is concerned with static view. Nevertheless,
it is likely that during the operation process (especially when the number of tasks remarkably
increases or the size of the employee group is reduced), new jobs are needed. To deal with
this abrupt change, companies must quickly come up with appropriate job design approaches
which define how work will be performed and determine the tasks required.

Mechanistic approach focuses to identify the simplest way that maximizes efficiency.
It tends to reduce the complexity of the work so that employees can be trained quickly and
easily to perform it. This method is supported by scientific management, which has a similar
idea of job design and entails monetary incentive offering to motivate employees.

Another method, motivation approach aims to affect psychological meaning and

motivational potential by altering job characteristics. This idea is presented in the Job
Characteristics Model, for example, enhancing skill variety to increase the meaningfulness of
jobs.

Biological approach, in another perspective, is designed to structure a physical

workplace environment physically that can minimize physical strain on the employees, which
in turn leads to a positive impact on their psychology. It is applied nowadays, obviously via
machines and technology at certain stages in the work process, and especially important to
jobs that involve high physical demand or value safety and health. Similarly utilize machine
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and technology but perceptual–motor approach concentrates on the reduction of information

process to tackle the issue of mental capabilities and limitations.

Lessons need to be learned from experiences of companies in "Re-engineering" for job

designing and job analysis

Company 1: Duke Energy

Company’s introduction. Duke Energy was created by the 1997 merger of Duke
Power and midstream natural gas company Pan Energy. It was named by Fortune as the
country’s most admired gas and electric company. The company was very famous for having
adequately high customer service while its energy costs were among the lowest in the US.

Before re-engineering. When deregulation arrived, the CEO of Duke Energy

recognized utility needed to cut costs and improve customer service to remain competitive
with the new competitors. Under the old system, a customer would call in and request a
service visit that would print out at an operating center. The company served about 2 million
customers in a large area of the US, so operating centers were built at many places.
Therefore, their operating structure was inefficient. Besides, Duke Energy had not focused on
their processes. They had 13 offices in 13 geographical areas with different ways of
operating. If they wanted to make a change, they had to do it 13 times. That was the reason
why nothing was ever changed. Additionally, no one in the company made any attempt to
determine how long it would take to accomplish a particular job. There would be problems
about productivity when some workers were sent out with only five or six hours of work,
while others had more than they could possibly complete in one day. Moreover, the
employees also had problems with their low morale. The company had a series of layoffs
over many years. Therefore, the employees misunderstood that re-engineering means layoffs,
downsizing.

After re-engineering. After the re-engineering process, the company successfully

increased speed and efficiency in which they responded faster to the customer. Thereby, it
increased their productivity and customer satisfaction. They also cut down on costs because
fewer people are involved in the process. Their company’s low costs put them in the top
quartile among competitor utilities. They were rated by Fortune magazine to be “best in
customer satisfaction” at an electrical utility.
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Methods to transform. First, they defined their process organization in terms of

football’s view. Every member will have their own role, responsibility and they have to
interface with one another to complete the task as a team. Besides, the company separated the
strategic work from tactical work. It means that one employee does not have to handle the
day-to-day business while also trying to figure out how to develop, improve the company at
the same time. To solve problem about productivity, Duke Energy came up with a system for
determining how long a job should take in terms of guidance, teamplates, colors for priority.
It helps them to increase productivity without making folks work a lot harder. In addition,
they went from a top-down, chain-of-command view of the world to one that is matrix-
managed which is no longer severed and directed upward to an overriding manager. The
supervisor’s role now transforms to be more of a facilitator. Rather than just assigning the
tasks to others, the supervisors had to make sure that the employees have necessary things,
supports to accomplish the assigned tasks. Moreover, the company also modified a clear job
specification not only for employees but also for the facilitators. For the employees, they are
required ablend of personalities that are unafraid to confront, or even instigate, constructive
creative tension. For the managers, a key element for them is being a knowledgeable,
independent facilitator who can show how process management works elsewhere. They also
made some other changes in systems such as standardizing trucks, or even days off of the
employees.

Company 2: IBM Corporation

Company’s introduction. IBM is very famous for computing. Its major is producing
and selling hardware, middleware and software. This company is a very special case for the
fact that they were very successful, commanded the market then lost their dominance and
then regained. IBM ranked No. 34 on the 2018 Fortune 500 rankings of the largest United
States corporations by total revenue

Before re-engineering. IBM was the primary force behind the proliferation of the
personal computer. The company even possessed a distinguished record for making huge
mainframes. However, by the early 1990s, when its prominence in the PC market was
challenged, the company was trapped by its starchy command-and-control hierarchy. So,
IBM could not move quickly enough to keep up with their newer and more streamlined
competitors and they were no longer a company to emulate.
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After re-engineering. After the successful re-engineering process, IBM’s profits are
up, the stock price is soaring, and the company is once again cited as a model to emulate, not
avoid. Their workforce plummeted to 285,000, from 400,000 in the early 90s along with the
raise in the quality of employees. More than 85 percent of IBMers are satisfied with the
procurement process, when only 40 percent were before. This is a very interesting point
because internal satisfaction is a key test of process team success. IBM is considered to be a
leader in e-business with significant decrease in purchase order processing time from one
month to one day

Methods to transform. They created job-family descriptions which were defined in

the same terms all around the world. So that people of IBM from different departments,
various branches in different countries can make sure that they speak the same language with
each other. With a small change, it’s now much more convenient for the employees to work
effectively in teamwork. Decisions now would be made by the line management, not by a
corporate committee. It’s like matrix management structure in which the employees can
contribute more rather than just follow the direct control from others.It helped the members
of the senior team, the staff to be more accountable in their required job as well as help them
to be more responsible in teamwork. Additionally, they re-designed their company structure.
Before, they looked at only near-term company operations: they tried to get the cost as well
as the production time, cycle time down and increase the customer satisfaction. After
reengineering, they focused more on long-term operation by putting all of their assets and
knowledge on strategy to become a smarter, faster organization and more competitive. Before
re-engineering, they tried to break up IBM into smaller, more manageable units. After that,
IBM wanted everyone to envision them as a single corporate entity, integrated company that
satisfies customers’ needs by operating with common processes around the world, thereby
avoiding the balkanization that results when each country or product group devises its own
way of working. Moreover, IBM successfully made their sales force much more mobile by
removing layers from their structure. People in their company were now more autonomous
and knew what to do without a manager to guide them every step of the way. This, in turn,
freed managers to devote more time to other business issues. Especially, before, the
employees had been encouraged to show, improve their individual excellence. After re-
engineering, IBM built a team-based culture from that the employees were required to share
information, share both successes and failures together. They also had the IT infrastructure to
support in accomplishing the tasks in teamwork.
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Company 3: Deere
Company’s introduction. John Deere is an American corporation that was
incorporated as Deere&Company in 1868 with certain success as well as struggles in the
agricultural industry in the Midwestern United States. It specializes in manufacturing
agricultural, construction, and forestry machinery, diesel engines, drivetrains. The strength of
the self-scouring steel plow helped the business gain the first reputation, then became a leader
in producing agricultural machinery, and a top maker of construction and lawn-care
equipment.  

Before re-engineering. Before reengineering, in the mid-1980s, the company

suffered during economic distress, however it still emerged healthier. At the beginning of
1990s, when the farm sector was struck, sales and profits of the company were truly beaten
down. Therefore, the company decided to start reengineering at that time. Besides, before
reengineering, the company already had many product introductions, even though it was
successful, it often had problems at launch including behind schedule, above cost and
unreliable.

After re-engineering. New prospect was opened up for Deere after reengineering.
The company had noticed some positive improvements. Its latest significant new product was
twice as reliable at introduction as the previous one. Production costs were cut by about 10
percent. Total order fulfillment time was cut in half. 40 percent of the elapsed time was
eliminated. Overall, in 1998, sales raised 8 percent to more than $13 billion even during
depressed grain and livestock prices.

Methods to transform. To conduct a successful reengineering process,

Deere&Company started with job analysis and job design. Because every process of the work
has changed, the company had to clearly define and analyze again each process and each
position. By defining and analyzing jobs, the company learned that each process now could
not be done separately but had to be connected, instead of specific actions in each
department, therefore, created opportunity for forming teams and the teams are empowered to
make decisions. Besides, a line manager or a process owner was assigned in each process in
order to be in charge of the design of work and resources required as well as responsible for
the results of the process. In ađition, the company mapped the management process called
“leadership process” that put all the leaders together as a team of experts to focus on
responsibilities as a leadership group of evaluating the working environment and
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communicating strategic intent and the vision to the organization. Educating people could not
be ignored in their re-engineering process. The company trained people to optimize an
activity instead of a process and remind them that they are working on processes, not
functions. That training thereby helped employees overcome resistance to change while
avoiding misinformation of “re-engineering”.

Lessons for analysis and design of work

3 main and common lessons that the companies learned for analysis and design of work

Cross-functional group work: In the reengineering process, each activity in each

function is related to each other because now they have to work in a process, working
towards a common goal, therefore, employees are required to form a team to collaborate
with each other. This group work allows members to offer an alternative perspective to the
problem and potential solution to the task
Empower individuals to do the task: In the past, organization was managed in a
hierarchical manner where managers are the one who decide everything. By analysing the
duty of position, decisions now can be made by line management instead of a corporate
committee, employees are also encouraged to involve in/contribute to the decisions.
Measurement system: The 3 companies agreed that right measurement is necessary
and should be utilized during reengineering to track the improvement, which can help the
company shorten the process. Besides, a measurement system is a tool that allows linking
compensation to performance of an individual, which creates stimulus for getting work done
more quickly and efficiently.
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References

Noe et al. (2019). Fundamentals of Human Resource Management (11th ed.). The McGraw
Hill Companies, Inc.

Hammer, M., & Champy, J. (1993). Reengineering the Corporation: Manifesto for Business
Revolution, A. Zondervan.