business process re-engineering

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Business Process Reengineering

The use of computers and information technology to improve a company's efficiency. For example, an automobile factory may automate and use more machines, rather than workers, to make cars. Because such companies need fewer workers, they often need fewer managers, who usually command higher salaries. Business process reengineering can increase the speed with which products are made (because machines can work 24 hours a day) and can reduce overhead (because the company needs to pay fewer employees). This is considered beneficial for consumers because it results in less expensive products. However, it is controversial, since some perceive BPR as a cause of unemployment.

business process re-engineering (BPR)

an approach to management which emphasizes the need to organize business operations in a multi-functional way rather than the conventional ‘compartmentalized’ way built round separate functions such as production and marketing.

Under the traditional functional-focused approach, employees tend to identify with ‘their’ own function rather than with the firm as a whole. Given, however, the growing complexity of modern business and the need to adapt to change quickly to remain competitive, BPR requires firms to take a holistic view of their operations stressing that everything which affects outcomes – processes, people, technology etc. – must be effectively coordinated across departmental boundaries. Thus the ‘focus’ of the business is clearly based on satisfying external customer needs as competitively as possible and internal processes are ‘re-engineered’ as appropriate to meet this objective. See DE-LAYERING, DOWNSIZING.

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