Organizational reengineering--an approach of change for the Romanian companies.

Ciobanu, Romeo Mihai ; Nedelcu, Dumitru

Abstract: The reengineering requires a paradigm shift after more two centuries of industrial society. The organizations are facing to the challenges of a new business environment. The traditional organizational structures and management systems are simply not adequate to respond to the customer-driven economy. Can be the reengineering a realist concept for a business excellence model in the Romanian companies? In this context, the authors have started to search some answers to this complex question. Thus, this paper presents some of the first authors' points of view according the requirements of radical changes in the Romanian companies.

Key words: reengineering, managerial innovation, creativity, radical change, Romanian companies.

1. INTRODUCTION

Today, all the life areas are under the pressure of the following forces as a characteristic of the information society:

* The exponential expansion of human knowledge.

* The growing demand for a broad range of complex products and services.

* The evolution of worldwide competitive markets.

Some of the old management systems are incompatible with the new information technology. The knowledge industry outruns the traditional industry. What should be done?

2. PROBLEM STATEMENT

The Romanian companies are facing to a difficult challenge of a new business environment under the pressure of the previous social forces and specific requirements of the European Union. The investment just in technology does not always reach alone the expected level of performance. The traditional and bureaucratic organizational structures and management systems are simply not adequate to respond to the customer-driven economy. Evidence suggests that the companies have to adopt the both managerial and technological innovations. In this context, many companies are searching now for the most effective and efficient business excellence model. What could be this?

The reengineering is considered one of the most innovative, creative, responsible, and risky managerial strategies. It requires a paradigm shift: from the thinking by hierarchical architectures, to the thinking by processes. Could be the reengineering a realist concept for a business excellence model in Romanian companies? If yes, what methodologies and models do exist, and how are the main steps and actors of the reengineering action within the Romanian companies?

3. STATE OF THE ART

The reengineering became a revolutionary concept of management of the 90s as a 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 response to the market (Hammer & Champy, 1996). The focus of reengineering can be to radically change one or more business processes, a total organization, a community, and even a society.

The spectrum of reengineering contains a lot of interpretations as the process improvement, process reengineering, business reengineering, business transformation, and ongoing renewal. These interpretations are according the degree of mindset change, scope, gains, and risks of each approach (Talwar, 1996).

The attitude towards the concept of reengineering varies from country to country, as follows:

* In USA it has become a fashionable management concept in the transformation programmes of companies.

* In United Kingdom almost any successful change programme is referring to as an example of reengineering.

* In French the term is considered as an American import and it is often treated as re-configuration.

* In Germany the consultants have adapted the Hammer & Champy concept according the labor-management cooperation, qualification structure of workforce and importance of SMEs enterprises (Stroetman et al., 1996).

The process based, radical improvement, integrated change, people centered, and mindset change are the most critical areas of the reengineering actions.

4. RESEARCH COURSE

In this context, the authors have tried to identify some reengineering methodologies and models, and their requirements in order to apply them in the Romanian companies. Thus, we think that the following methodologies are able to answer to the actual necessities:

* COBRA (Constraints & Opportunities in Business Restructuring--an Analysis), as an initiative of the European Commission which has recognized the failure of many change programmes (Coulson-Thomas, 1996).

* LMI CIP Transformation Model (Logistic Management Institute--Continuous Improvement Process), that is focused to sustain the need of a reengineering culture (Edosomwan, 1996).

* PMI LES Model (Process Management Institute Leadership Expectation Setting Model), that is focused on the leadership associated with reengineering (Edosomwan, 1996).

* Process Reengineering Model, as a general model for a reengineering project (Chang, 1996).

The previous reengineering models have a certain common points of view, specific elements, and they are complementary. Every model can be an important source of inspiration for the Romanian companies.

The reengineering as a managerial innovation can have a certain difficulties in the Romanian companies because:

* A traditional structure can be easier seen as a process.

* A formal structure gives a degree of security to individuals, but a process show hardly where an individual fits.

* The transition to the new stage has to be systematically and based on a pilot process.

* It has to be a counterpart with Kaizen and TQM in improving processes.

* It has to be implemented in the well-balanced steps.

5. RESULTS

The main authors' results regarding on a reengineering action according the requirements of Romanian companies at this moment are presented as follows.

5.1. General framework of a reengineering action

The reengineering is a new relatively managerial strategy for the most Romanian companies, even unknown. This fact determines a strong necessity to have a general framework according the Romanian economic environment based on the following main steps:

* To disseminate the reengineering strategy among the companies interested in the radical changes.

* To present some of the best practices.

* To develop a vision based on the business processes.

* To understand the deeply relationships between the changes and principles of reengineering as one of the first author's personal opinion (Ciobanu, 2005).

* To emphasize the strong interrelation between the business processes and informational technology.

* To raise the awareness of top-managers for the need and responsibility of change based on reengineering.

* To realize a SWOT analyze by the top-management of interested company in reengineering.

* To get support for the managerial innovations as the reengineering from the top-management.

* To set up an Executive Steering Committee with the representatives of top-management and union.

* To raise awareness of the new adequate skills for the managerial innovations.

* To prepare the employees for reengineering.

* To draw up a specific reengineering guideline for the company interested in reengineering.

5.2. Main reengineering actors

The reengineering is a critical action that involves creativity, responsibility and ethic in the same time. The reengineering leader and reengineering team(s) are two important actors who can determine the successful in the Romanian companies.

The most important actor is the leader as a key individual from top-management. He (She) must have the passion, power, wisdom and skills to push the radical changes and let the people to accept the changes over time.

In the authors' opinion the reengineering teams have to be according the specific requirements of the reengineering stages (Edosomwan, 1996), namely:

a) The recommended teams for the 1st stage, which is usually focused on a business process, are the following:

* Radical Cross Functional Reengineering Team because it utilizes the reengineering tools and methods in order to create a new radical organization. The team members have to be appointed by the top-management.

* Incremental Cross Functional Reengineering Team because it proposes solutions and plans for the continuous improvement which allow the employees to deal with the change more comfortable.

These two teams are simultaneous useful for a well-balanced implementation.

b) The recommended teams for the 2nd stage of reengineering, when the organization is involved in more projects, are the following:

* Goodwill Reengineering Team, which consists of dedicated volunteers to changing their organization.

* Empowered Reengineering Team, which consists of individuals who have already achieved success in the past projects of reengineering.

6. FURTHER RESEARCH

The further authors' research will be oriented on the following directions:

a) To develop every component of the general reengineering framework.

b) To emphasize the details of relationships between the changes and principles of reengineering.

c) To develop the similitude between reengineering and

Value Analysis and Engineering (VAE).

The concept of business process is for reengineering what the function is for the VAE. Once all the business processes are defined, the functions of each process will be identified in order to maximize the process value required by the customer.

7. CONCLUSION

The organizational reengineering requires a paradigm shift and applying new methodology, models and principles that determine important changes with major influences in the organizational structures. It is important for the Romanian companies and managers to understand and accept the reengineering as a fundamental way to survive an organization.

8. REFERENCES

Chang, R. (1996). Process Reengineering In Action. A Practical Guide To Achieving Breakthrough Results, Kogan Page Ltd., ISBN 0-7494-1831-1, London.

Ciobanu, R. M. (2005). Organizational reengineering--A new Managerial Challenge, Proceedings of The Second International Conference of Management and Industrial Engineering SUSTAINABLE DEVELOPMENT MANAGEMENT, pp. 68-73, ISBN 973-748-022-8, Bucharest, November 2005, Editura NICULESCU, Bucharest.

Coulson-Thomas, C. (1996). Initiating and Preparing for Reengineering, In: Business Process Re-engineering: myth or reality, Coulson-Thomas, C. (Ed.), pp. 17-39, Kogan Page Ltd., ISBN 0-7494-2109-6, London.

Edosomwan, J. (1996). Organizational Transformation and Process Reengineering, Kogan Page Ltd., ISBN 0-74941705-6, London.

Hammer, M. & Champy, J. (1996). Reengineering-ul intreprinderii, SCIENTCONSULT SRL & Editura Tehnica, ISBN 973-31-0938-X, Bucuresti.

Stroetmann, K.; Maier, M. & Schertler, W. (1996). Business Process Re-engineering--A German Point of View, In: Business Process Re-engineering: myth or reality, Coulson-Thomas, C. (Ed.), pp. 75-81, Kogan Page Ltd., ISBN 07494-2109-6, London.

Talwar, R. (1996). Re-engineering--a Wonder Drug for the 90s? In: Business Process Re-engineering: myth or reality, Coulson-Thomas, C. (Ed.), pp. 41-59, Kogan Page Ltd., ISBN 0-7494-2109-6, London.