Business Process Governance: Theorizing and Empirical Application

Studies by Gartner (2010) or McKinsey (2008) suggest univocally that improving business processes is the undisputed number one priority for organizations world-wide. Hence, organizations need adequate capabilities for Business Process Management (BPM). However, these capabilities do not necessarily need to be developed in the organization itself – an inclusion using other sourcing structures (e.g. cooperation/network or market instead of hierarchy) is possible as well. This paper builds upon an understanding of BPM as a dynamic capability and a well-known distinction of governance strategies (market, cooperation, hierarchy) to develop a business process governance framework. Using an extensive case study we initially test this framework in a European PRODUCTION company. Therefore, we make the following contributions: 1) development of a BPM theory that integrates dynamic capability and governance theory, 2) a model for understanding sourcing strategies in BPM, and 3) empirically sound factors explaining sourcing strategies in BPM. Our results suggest that organizations facing a low dynamic market environment do not employ dedicated resources for business process change but rely on ad-hoc measures. Moreover, they gather these resources mostly internally (hierarchical governance). The paper ends with implications for both research and practice, limitations, and potential avenues for future research.