This case might be subsumed under the normal implementation problems of restructuring. However, in the remaining part of the paper it will be demonstrated that such international business changes have some unusual features which must be taken into account when re- engineering processes are started. 

Characteristics

1. Process orientation: From structure to process  

Business process orientation is trying to overcome some of the problems raised by the Tayloristic view of structural specialization. In an international context, process orientation changes the perspective from structural relationships between headquarters and subsidiaries to the interaction processes between them. 

2. Definition of business processes 

A process is a specific arrangement of activities across time and place, with a beginning and an end, with inputs and outputs. Business processes aim at producing an output that supports a firm's targets and cuts across functions, departments, and in some cases across the boundaries of an organization. Business activities include informational, operational and managerial activities. Re-engineering covers all three activities, not only operational activities. 

3. The contents and boundaries of business processes  

The contents and boundaries of business processes vary from firm to firm. The experience of designers shows that a firm should differentiate its ongoing activities by a range of ten to twenty business processes. Each company has its own set of business processes. For instance, IBM uses eighteen business processes. Some examples of these processes are: production, customer fulfillment, customer feedback and development of hardware. 

4. Business process owners and responsibility  

Top management should take over the ownership and hence the responsibility for the business processes to ensure their optimal management as well as their continuous improvement. Line responsibility and process ownership form a matrix. 

5. International business processes  

Business processes are not international per se. The internationality of the firm determines how many business processes have an international scope. Some business processes are more likely to be international than others, for instance global sourcing, global key account management, R&D, new product launch, or manufacturing. 

6. Customer orientation 

BPR is radically customer-oriented. Process outputs should not only support the firm's objectives, but must also satisfy customers' requirements. Customers should be integrated into the redesign. 

7. Re-engineering as a radical change of business processe 

Re-engineering of business processes is a radical break of process structures which bears great risks. Hammer confessed that seventy per cent of all BPR projects in which he was involved failed. However, the opportunities are also great. Where as programs of TQM aim at reaching improvements of 30 to 40 percent, Hammer and Champy report cases of redesign where process times have been shortened by a factor of 100. 

8. Holistic view of processes instead of piecemeal engineering 

BPR takes a holistic view of the network of parallel and serial processes. A holistic view can overcome the piecemeal engineering of isolated parts of a business process which often results in sub optimal solutions, particularly when the preceding or following process steps fall under the responsibility of a foreign subsidiary. However, designers lose this holistic view if they distinguish between too many processes or too many process levels. IBM, which has the longest experience with process re-organization, reduced their 140 subprocesses to the above mentioned 18 business processes. 

9. Top -down approach of Business Process Re-engineering 

A holistic view harmonizes with a top down approach. Because of the broad, cross- functional scope of BPR and the risks of radical change, top management should initiate, control, and monitor the re-engineering. BPR follows a top-down approach in contrast to quality improvement programs which follow a bottom-up approach. 

10. Benchmarking of Business Process Re-engineering  

Business processes are benchmarked. Continuous improvement and radical innovation are designed to reduce cost and time, to increase customer satisfaction and organizational flexibility. However, only a deep understanding of cause-effect relationships will identify the true cost drivers and time wasters. 

Compared to the ten characteristics of BPR, the interview partners had a different perception and understanding of business processes. Although top management in the German electronics and pharmaceutical industries had a basic understanding of processes and their inherent possibilities of improvement, the lower echelons of these firms have not been influenced by the process philosophy, with the exception of data processing departments. Most firms have improved efficiency of separate processes by applying TQM and JIT concepts. These improvements lacked the radical, systematic, and holistic approach of BPR. Only a very few, exceptional companies in the sample, like the often quoted IBM and DEC, reported a fully-developed process organization. 

Almost all major consulting firms, as well as companies with BPR experience such as IBM, HP and DEC participate in the BPR market with Andersen Consulting, which is the market leader. The BPR philosophy is heavily promoted by writers who work as partners of or in connection with consulting firms and who have a strong commercial interest in the diffusion of BPR. A more critical observer might also take into account the complaints of numerous victims who have ventured into BPR unsuccessfully. He might critically ask: What is really new about BPR? A succinct answer might be that BPR changes the focus from a structural to a process view of an organization. 

Information Technology

After reviewing the interviews, it is not easy to decide who is right or wrong. Business processes differ with respect to their internal structure. The proportion of information, operations and management activities varies tremendously over time between and within business processes. Consider the processes of product launch and of production: at the beginning of the product launch process there are more information and management activities and later during the process there are more physical operations. In contrast, production processes have a continuous flow of physical operations producing and receiving a comparatively low amount of management information. The hardware and software of IT have a spectrum of abilities to support informational or operational, or even managerial activities with respect to the individual business processes. Therefore it is very difficult to generalize whether IT enables or just supports BPR. 

Moreover, the role of IT is influenced by those who take the initiative in process improvement or redesign. If the data processing department initiates the process change, then IT has more of a generator function for new process redesigns. If top management sets off the change process, then the process is first restructured and afterwards optimized through IT. In two cases parallel change processes were reported; developing IT and process redesign simultaneously. It can not be taken for granted that IT is adapted. 
In the case of one industrial goods factory the change agents of the production transfer to Portugal failed to establish information flows between the German plants and the Portuguese plant. Feedback and feedforward information on quality, production schedules, delivery times, stocks, and production stoppages were cut off and reached the coordinating plant in Germany only by coincidence. Nonetheless, even if the process designers had linked domestic and foreign plants by an on-line connection, the internationalization of this production process would still have resulted in a disaster.  

A superficial explanation would explain the failure with the fact that in Portugal, with the exception of the German general manager, nobody spoke German or sufficient English to understand the messages. A more carefully conducted analysis would take into account that the manager of a fully mechanized mass production plant, such as that in Portugal, cannot be expected to be overly enthusiastic about the reintroduction of manual work places, which reduce the plant's productivity. Moreover, he could not comprehend the logic of integrated international manufacturing, which created nothing but problems and allocated the comparative cost advantage to headquarters. 

This case was outlined in greater detail, because it highlights an aspect of international BPR, namely the role of corporate culture. 

Deeper Structure

The old and new structures of business processes are artificial problem solutions, designed by individuals to deal efficiently with the firm's task complexity. International business processes are the answers of organization designers to problems resulting from the configuration of international activities. Centralization, formalization, and standardization represent the visible surface structure of organizations. Organizational designers are those who develop, influence, and decide upon changes in the surface structure. 

The designers produce designs of business processes based upon their perception, explanation, and understanding of organizational reality. Values, beliefs, attitudes, and facts are the bits of knowledge of organizational reality. Problem solutions, such as business process redesigns, are derived from contextual orientations such as lay theories and frameworks, providing synthesis to the bits of knowledge. Each member of an organization, either as designer or as participant of a business process, has an individual set of contexts. The sum of all members' values, beliefs, attitudes, facts and contextual orientations is called the deeper structure of an organization. The deeper structure produces, then, the surface structure in the form of re-engineered processes. More generally, the visible organizational behavior is the product of an organization's deeper structure. 

The participants in a product development process, for example, have a specific set of experiences, theories, and beliefs about why and how a process is organized as it is. Restructuring the surface of the process without changing the contextual orientations of the process might result in an uncompleted change. The participants' old, unchanged deeper structure produces more or less similar copies of old behavior, thus conflicting with the new process design. 

On the other hand, surface structures are never perfect, because design can only be a proxy model of reality. Thus, deeper structure helps organizations to work efficiently within outdated surface structures, to remedy mistakes, and to smooth design faults. Now, the redesign of the surface structure might be so radical that the participants' contexts no longer fit their old values, and experiences, and the new facts. Without knowing the deeper structure, designers of the new business process do not know the cause-effect relationships and can not judge how to modify the new business process. 
Both cases of redesign indicate that it is not sufficient to develop and implement a new surface structure of business processes. It is also necessary to analyze and change the corresponding deeper structure. A similar discussion took place under the heading of "planned organizational change" in the seventies and "organizational learning" in the eighties. Obviously, process redesigners ignore this knowledge and repeat the mistakes designers of structural change have already made. The high failure rate of Business Process Re-engineering, as reported by Arthur D. Little , may have its roots in the poor understanding of the deeper structure of organizations. And many consultants seem to act in a strange way: in the eighties they focused on corporate culture, in the nineties they concentrate on BPR. But why are they not able or willing to combine both ideas? 

Internationality

It cannot automatically be assumed that in a multinational corporation the degree of co- orientation is very strong. Subsidiaries develop a local identity, rooted in the national societal context. The probability of a weak co-orientation is high, when MNCs acquire many foreign companies, favour autonomous subsidiaries, and invest little international management development. Moreover, the less homogeneous deeper structures are, the greater is the probability that local deeper structures evolve and develop centrifugal forces. 

The degree of homogeneity of corporate deeper structures favors the success of international BPR. The redesign of processes will fail when the deeper structure of designers and process participants in the headquarters differs from the deeper structure in subsidiaries. In this case headquarters and subsidiaries do not share a common logic underlying the new process. An example may help to explain the argument. 
A middle-sized German company started to integrate globally the process of producing its sales literature, trying to realize economies of scale in printing and photography on a worldwide basis. Previously, each subsidiary was autonomous in the production of sales materials. However, they were committed to following the corporate design rules for formats, typography, colors and the use of the logo. In a long-lasting political process, the dominant coalition in headquarters agreed that white should be the basic colour for all printings, pamphlets, brochures, and packaging material. Shortly after this decision an American company was acquired. The management of the new US subsidiary immediately renewed all sales literature to demonstrate the new ownership to their customers. However, having grown up in the industry and influenced by their culture, the American general manager and his marketing manager had decided that the basic line for all literature should be black, because black was perceived to be far more elegant than white. Being rather proud of their quick response, the American managers were surprised about the CEO"s negative reaction during his first visit to the new subsidiary. Though they understood the economic reasons, they were reluctant to coordinate a decision with headquarters they were used to deciding on their own. They really could not accept that the Germans claimed to have a better understanding of the marketing game in the US market. 

To make it clear: It is not only cultural diversity that makes process re-engineering more complex in MNCs. It is the corporations multi-faceted deeper structure which creates the differentiated and sometimes deviating behavior of subsidiaries. 

Complexity

The greater the process complexity, the higher is the required level of coordination. Co- orientation is a means of coordination. So, the process becomes less complex when the participants have a strong co-orientation, which means that their deeper structure is more homogeneous. 

However, it has just been argued that the probability of a heterogeneous deeper structure is high within MNCs, particularly between subsidiaries and HQs. When integrating managers of foreign subsidiaries into business processes, process complexity is increased because of the greater number of managers and because of their different contextual orientations. So it is quite natural to integrate the members of foreign subsidiaries into the process as late as possible. In such cases a sequential process design seems more appropriate than a parallel process design. Ignoring differing contexts is one mode of handling process complexity. Acceptance of the heterogeneous deeper structure may be a second way to deal with international business processes, as the following case shows: 
The case describes the product innovation process and its redesign within Mercedes-Benz. The new model of the S-class was introduced in 1991-92 with an old sequential process design: product design, body construction, prototyping, engineering and implementation of the production line, field-tests and market introduction followed one after the other. It was typical of the international co-orientation of Mercedes-Benz that the official international showing of the S-class to foreign subsidiaries and sales agents was opened by presenting the strategy for the German market introduction. The late involvement of foreign managers kept the development process simple. However, the new product had to be promoted and pushed heavily within the international organization. Headquarters" vice-presidents had the burden of selling the product internally and breaking mental barriers of acceptance. The sequential procedure only shifted the complexity from the early to the late stages of the process. 
In the planning for the new "Baby-Benz", the process was changed radically. Already 36 months before launching the product on the market the European core subsidiaries, the US, and the Japanese subsidiaries were integrated into the product innovation process. Three hundred target customers from all over the world were invited to Stuttgart to assess the prototypes. Following this session several international task forces were established to position the product in the different country markets, developing market entry strategies for all countries, price and communication policies, training and service programs. Throughout the last three years of the technical product development the foreign sales force accompanied the birth of their "Baby- Benz". 

In the case of the "Baby-Benz", Mercedes-Benz deliberately increased the process complexity in an early stage by integrating into the business process foreign customers and managers as "problem generators". Technical product development and market introduction worked in parallel for 36 months. Why was this process redesign possible and, as is known, successful? 

1. Mercedes-Benz had undergone a substantial internationalization program between the introduction of the S-class and the product launch of the Baby-Benz. For instance, public trading of Daimler-Benz stock in the United States was one part of the internationalisation program. So Mercedes-Benz forced a new contextual orientation towards globalization and tried to create a stronger international co-orientation of sales agencies and subsidiaries. 

2. The international task forces were composed of well selected managers, thus increasing the problem solving capacity not only in quantitative terms but also in qualitative terms. Problem complexity was handled by a variety of coordination systems. 

3. Face-to-face meetings were used as the predominant coordination instrument. These meetings were costly and extremely time-consuming. However, the process itself stimulated and developed a stronger international deeper structure. People were confronted with other cultures, discussed their expectations, experiences, and lay theories, and exchanged values and beliefs - thus learning to manage the product launch by international experience. 

Conclusion

1. It is agreed that applied research in international management should support managers to increase the efficiency of MNCs. Switching from a structural view to a process view of international organizations, MNCs can be interpreted as being composed of several business processes. MNCs are the more efficient , the better the members of an organization manage business processes. Continuous improvements and basic redesigns of business processes are important to change process structures and hence the overall efficiency of MNCs. 

2. The predecessors of Business Process Re-engineering such as TQM have prepared the ground for a process orientation in industry. This view should be extended from the redesign of single business processes to a process organization, which very few corporations such as IBM, Xerox, DEC or British Telecom have already implemented. However, there exists only anecdotal knowledge about the correct definition and extension of business processes, about the right number of process levels and the role of process owners. 

3. Re-engineering of business processes has to consider the great variance in their contents, structure of activities, internationality and complexity. One might expect that the importance of deeper structure depends on the type of the business process. It should be also kept in mind that little is known about the relative importance of individual contexts and organizational deeper structure compared to objective organizational factors, such as technology, apparent on the surface structure of business processes. 

4. If the influence of deeper structures is accepted, it might also be expected that in MNCs deeper structure is heterogeneous and varies between HQs and from subsidiary to subsidiary. Weak co-orientation increases the complexity of international business processes, because process participants try to manage joint business processes with differing and incommensurate deeper structures. From comparative management literature it is known that managerial behavior is culture-bound. So it might be helpful to learn about the interdependence of organizational deeper structure and national cultures. 

5. Management can deliberately try to manipulate the contextual orientation of organizational members and thereby the degree of co-orientation within the MNC through general programs of organizational learning, such as management development, international job rotation, and symbolic acts, thus creating more homogeneity. Business processes themselves can help in developing a process-specific co-orientation by creating numerous communication arenas, where participants learn in face-to-face situations about differing contextual orientations. Face-to-face meetings allow context-rich communication about values, beliefs, and theories. It seems appropriate for the process design, to put these trust-building face-to-face meetings at the beginning of the business process. The stronger the international co-orientation, the less necessary are trust-building activities and the greater is the probability that new IT can successfully support the management of international business processes. 

6. New IT permits only context-poor communication. Therefore it seems inappropriate to use IT in processes where the deeper structure strongly interferes with the outcome of the process. As the interviews show, new IT is only used in well-structured business processes. Thus, for the near term no dramatic change in IT use is expected for more complex business processes, even if the development of group-ware makes greater progress than in the past. 

Globalization of MNCs calls for a better understanding of those business processes which link subsidiaries with each other and with headquarters. MNCs are on the edge of learning how they can gain competitive advantage by integrating their geographically dispersed competencies, arbitrating comparative cost advantages, leveraging their strengths and avoiding dangers of economic exposure. Both processes and structure are aspects of international management and organisational theory. Some writers even consider structure as one side and processes as the other side of the same coin, each leading to a different perspective of organizational behavior. Comparing organizational research with this statement, the distribution of research findings seems to be unbalanced, with the greater bulk of research concentrating on questions of organizational structure. This encourages the writer to argue for more process-oriented research on organizations. References 

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See Handelsblatt (1994), No. 117, June 21, 1994.
See for instance Davenport and Short (1990), Hammer (1990), Harrington (1991), Knorr (1991), Barton
(1993), Davenport (1993), Hammer and Champy (1993).

 These interviews have been carried out together with Professor Krcmar, Chair of Information Systems at the 
University of Stuttgart-Hohenheim,  and  two research assistants, Ulrich Hanfeld  and  Dr. Bettina Schwarzer, 
both being financed by the generosity of the Carnegie Bosch Institute.

  The terms business process re-engineering  and  business process redesign are used synonymously throughout 
the paper.

  See for instance Stopford and Wells (1972), Franko (1976), Doz (1980), Welge (1981). 
  The criteria for selection are taken from literature pertaining to individual  and  collective problem solving. See 
for instance March and Simon (1958). The selection was performed to obtain a large variance representing the 
spectrum of processes found in organizations.
  From an external point of view this situation leads to disjointed incrementalism; see Lindblom (1964).
  See on interface problems for instance Lim and Reid (1992) or Brockhoff and Hauschildt (1993).
  See Harrington (1991), Short and Venkatraman (1992), O`Sullivan and Geringer (1993).
  See Kane (1986), Belmonte and Murray (1993), Davenport (1993), Hammer and Champy (1993).
  The problem of coordination mechanisms originates in the bureaucratic model of Max Weber. Here we refer 
to Kenter's classification of coordination instruments. See Kenter (1985). 
  For exhaustive reviews of the literature see Khandwalla (1975), Welge (1981), Baliga and Jaeger (1984), 
Egelhoff (1988), Martinez and Jarillo (1989), Wolf (1994).
  See Prahalad and Doz (1987).
  See Brandt and Hulbert (1976), Prahalad and Doz (1981), Ghoshal and Nohria (1989), Roth and Nigh (1992).
  See Macharzina (1992), Sullivan (1992), Kutschker (1994).
  See Brandt and Hulbert (1977), Welge (1981), Kenter (1985).
  This was the title of an article stressing the role of the manager; see Pondy and Boje (1976).
  For a complete listing  and  interpretation see Conger (1988).
  See Manheim (1990), Jarvenpaa and Ives (1991).
  See for instance Jarvenpaa and Ives (1990), Jarvenpaa and Ives (1991), Ives and Jarvenpaa (1991).
  See for one of these studies Samiee (1984), Sethi and Olson (1991), Palvia and Saraswat (1992). 
  See Conger (1988), Moynihan (1985).
  See Malone (1988).
  See Mandell (1975), Brandt and Hulbert (1976), Mandell and Grub (1979).
  See Keen (1991), Manheim (1991).
  See Heenan and Perlmutter (1979).
  See Bartlett and Ghoshal (1989).
  See Etzioni (1968), Deal and Kennedy (1987), Bartlett and Ghoshal (1989), Nohria and Ghoshal (1994).
  See on flexibility Boudette (1989), Bleicher (1990), Maljers (1992), Amburgey, Kelly and Barnett (1993). 
  See Striening (1988), Hammer (1990), Gilbert and Siong (1993), Harrison and Pratz (1993), Girth (1994).
  See Gaitanides (1983), Peters (1988), Davenport and Short (1990), Holst (1991), Davenport (1993).
  See Kane (1986), Davenport (1993), Scheer (1993).
  See on process owners Striening (1988).
  See Pall (1987), Vantrappen (1992), Blattberg and Deighton (1993), Hammer and Champy (1993).
  See Handelsblatt-Karriere (1994), No. 29, July 29-30,1994, Fischer et. al. (1994).
  See Davenport (1993).
  See Gaitanides (1983), Bellmann (1991), Striening (1988).
  See Simon (1989), Fromm (1992).
  The sample consisted of an undifferentiated sub-sample of German MNCs  and  two Swiss  and  German sub-
samples in the electronics  and  the pharmaceutical industries.
  For instance Davenport, Ernst&Young or Hammer and CIC or Scott-Morgan and ADL.
  See for example Fischer et al. (1994) who give a disillusioning report.
  See Davenport (1993).
  See Kane (1986).
  See Brandes et al. (1989), Davenport and Short (1990), Hammer (1990), Venkatraman (1991), Scheer (1993), 
Benjamin and Levinson (1993), Hauser and Thurmann (1993).
  See for instance Schwarzer, Krcmar and Kutschker (1993), Schwarzer (1993), Schwarzer and Krcmar (1994).
  See Etzioni (1968). For the interplay of data, values,  and  theory in science see Galtung (1978), Kirsch 
(1991).
  The distinction between surface structures  and  deeper structures is based on ChomskyÕs concept on the 
syntax of a language; see Chomsky (1965), Kirsch (1991), Kirsch (1992).
  See for instance Kirsch, Esser and Gabele (1979), Kirsch (1991), Hedberg (1981), Meffert (1984), Stata 

(1989).

  See Handelsblatt Karriere (1994).
  See however Scott-Morgan (1994).
  See on co-orientation Kirsch (1992).
  See Etzioni (1968), Ouchi (1981), Nohria and  Ghoshal (1994).
  See Eisenhardt (1989), Yin (1990), Wollnik (1992), Schmid (1994).
  See for instance Adler (1991).
  See Porter (1985), Porter (1986), Bartlett and Ghoshal (1988), Bartlett and Ghoshal (1989).
  See Bellmann (1991), Wildemann (1993)