BUSINESS PROCESS REENGINEERING (BPR) ON PERFORMANCE

OUTCOMES OF SELECTED FOOD ESTABLISHMENTS IN LEGAZPI CITY:

STUDY OF IMPLEMENTATION STRATEGIES

An undergraduate Thesis Presented to the Members of the Faculty of the

College of Business Education
Divine Word College of Legazpi
Legazpi City

In Partial Fulfillment
of the Requirements for the Degree of
Bachelor of Science in Accountancy

by

ALVARADO, Raxielle Marie B.

CAMU, Ma. Theresa S.

BSA 3-A

December 2023
 REVIEW OF RELATED LITERATURE

This chapter discusses pertinent literature and studies which were found

to have bearing on the present study and which were taken out from the books,

articles, the internet, and other related research studies. It also presents the

synthesis of the art, the gap to be bridged by the study, the theoretical and

conceptual framework, and the definition of terms to have a better understanding

of the study.

Food Service Industry

The country's food service industry has continued to improve in recent

years as consumers' purchasing power has increased as a result of today's fast-

paced lifestyle. Food service providers are expanding their network to meet the

growing demand for convenience among Filipinos. According to Thomas (2023),

the food service industry refers to any company or business essential to the

preparation and distribution of food products outside of the home. Components of

this industry include foodservice distributors, counter and table servers, and food

service providers. All of these companies and staff are dedicated to making food

products or serving these products to customers.

The Philippines has a vibrant food service sector, with establishments

ranging from street stalls and small roadside eateries or carendria to fine dining

restaurants. In 2021, the country’s food service industry generated revenues

amounting to 8.37 billion U.S. dollars and was projected to increase by 12

percent to 9.36 billion U.S. dollars in 2022. Jollibee Foods Corporation (JFC)
dominated the food service industry market, holding a share of nearly 30 percent.

In-person dining habits were challenged in 2020 when the COVID-19 pandemic

hit. Instead of dining in, most Filipinos turned to food delivery apps to satisfy their

food cravings. Even after restrictions eased, a recent survey revealed that

Filipinos planned to continue ordering food from these apps due to their

convenience and to limit social contact. Between 2020 and 2021, the share of

online food service orders grew rapidly, although it remains lower than offline

orders. (Statista,2023)

Existences of 2 food service industry

Types of food service industry include:

Fast Food Restaurants. According to Graset (2018), branded food stalls

are temporary structures used to prepare and sell food to the general public.

Fast-food chains refer to buildings used for the preparation and sale of ready-to-

eat food. Fast-food chains are characterized by a limited menu of food prepared

quickly (often within a few minutes), and sometimes cooked in bulk in advance

and kept

hot.

Casual Dining Restaurants. Also called bistros, have a relaxed casual

ambiance with a lot of seating. Its appearance and atmosphere provide an

environment for casual dining where food is served with table service (Jones,
2014). A casual dining restaurant (or sit-down restaurant) delivers reasonably

priced food in a relaxed setting. With the exception of buffet-style restaurants,

casual eating establishments normally offer table service.

According to Bondoc et al. (2019), the increased choices for consumers

led restaurants to refurbish and emphasize their brand’s particular environment.

Fast food restaurants added seating inside as well as the now iconic drive-thru.

To appeal to families’ restaurants started creating meals as well as specific areas

for kids. Healthier options and expanded menus helped differentiate one chain

from another. At the beginning of the 21st century, the market experienced

another seismic shift as fa st-casual restaurants emerged as serious

competitors to larger fast-food chains. Brands like Starbucks, Panera, and

Chipotle emphasize the quality of their products and strive for an environment

that promotes lingering, as opposed to the quick turnaround of fast-food

restaurants. This shift is inspired by the new driving force in the economy,

Millennials. Just as the Baby Boomers wanted something fast and easy the

Millennials want something more sustainable and, in a place, where they can use

their various electronic devices.

Operations

Operations is the work of managing the inner workings of your business so

it runs as efficiently as possible. This can help streamline costs, allowing you to

do more with less and reducing the need to secure small business loans.

Whether you make products, sell products, or provide services, every small

business owner has to oversee the design and management of behind-the-

scenes work. The specific definition of operations will depend on your industry

and the stage your business is in. Sometimes, improving operations means

thinking strategically about your systems and processes. Other times, it means

being part of the on-the ground work to bring every aspect of a project, from tiny

to huge, to reality. (Kiisel, 2023)

An efficient operational/production process is worthless if the final product

is not living up to expectations. Making improvements to all areas of business

operations will improve the overall effectiveness of an organization. Improving

business operations will help achieve a higher level of productivity and increase a

company's output/sales. If resources are utilized efficiently, the organization

doesn't need to invest as much in production costs. With a higher rate of output

and a more effective workforce, customer satisfaction will improve. Happier

customers tend to purchase more products and generate more revenue for the

organization. Efficient business operations provide a culture that supports

innovation and growth. (Christiansen, 2023)

Business Process Reengineering

Business process reengineering is a management practice that aims to

improve the efficiency of the business process. The key to business process

reengineering is for organizations to look at their business processes from a

"clean slate" perspective and determine how they can best construct these

processes to improve how they conduct business. Reengineering is a

fundamental rethinking and radical redesign of business processes to achieve

dramatic improvements in cost, quality, speed, and service (Chang, 2014). The

development of an organization is a continuous process but the speed of change

has increased in manifolds. In a volatile global world, organizations become

competitive through business process reengineering by radically redesigning

selected processes.

It can be defined as a process of analyzing and redesigning the entire

business process of an organization in order to improve the productivity and

performance of the organization and to enhance the quality of products produced

by it. In order to reengineer the business process of an organization, the

assessment of its business goals, strategic goals, and the needs of its customers

is done. It is made sure that the strategic goals of the organization should be

aligned with the main organizational goal of the organization and learn more

about the needs and requirements of their customers in order to serve them

better. Business Process Reengineering focus on two main business area first is

the technology. It uses modern technology in order to make better data

dissemination and improve decision-making, and the second is a functional team.

The functional organization is changed to form a functional team. (Bhasin, 2019)

Akam, et al (2018) stated that BPR enables organizations to improve

productivity and relationships with customers, and reduce the time to launch new

products and services in terms of cost, quality, customer satisfaction, and

shareholders value by identifying and reengineering the important processes of

the firm. With this, corporate organizations are in search of appropriate BPR

strategies that will lead to a successful implementation, eliminating the traditional

function orientation to a more customer-centric approach.

The findings of Golchini (2021) indicate that the successful implementation

of BPR practices requires organizations to define their objectives and

stakeholders precisely. If they fail to create such a strategic map, their

competency would be severely impacted, and in that case, deploying BPR-

oriented systems would not be a coherent strategy. Moreover, the nature and

quality of the relationship between management and employees are of utmost

importance. Therefore, organizations considering BPR, parallel to top-down

managerial channels, should apply horizontal mechanisms in which employees

are determined to grow, and correspondingly, they are trusted to perform their

tasks with a relatively logical level of autonomy. Lastly, companies must

adequately invest in the IT infrastructures, accurately design the structures, and

carefully select systems for their operations as the costs of mistakes may

considerably surpass the benefits, they initially associated with the BPR project.
Understanding the phases of BPR

The case study analysis of Fasna & Gunatilake (2019) disclosed thirty (30)

issues faced by BPR project participants within the different phases of the

reengineering process (i.e., Pre-BPR implementation phase, BPR

implementation phase, and Post-BPR implementation phase).

Pre-BPR implementation phase is the initial phase of a BPR project

wherein all the activities from discovering reengineering opportunities to the

redesign of the selected process are performed.

The BPR implementation phase merely dictates the physical

implementation of the redesigned process and involves activities like making the

implemented process operational and managing the change.

Post-BPR implementation phase is the final phase of a BPR project where

the performance of reengineered process was evaluated and the measures to be

taken to ensure the continued functioning of the redesigned process are

determined. They presented that the ‘Lack of top management commitment and

support’ was the key issue identified in the pre-BPR implementation phase, while

‘resistance to change’ and ‘project participants’ conflict between team

responsibilities and functional responsibilities’ were the key issues faced in the

BPR implementation phase. On the other hand, ‘difficulty in measuring

reengineering project performance’ was identified as the key issue faced in the

post-BPR implementation phase.

Technology

Technology is a recent marvel that has flourished in our daily lives. The

most challenging activities can be made eminently simple and more effective

thanks to technology. Despite its cultural pervasiveness, technology is an elusive

concept. It can refer to material objects, such as machines, hardware, or utensils,

but it can also encompass broader themes, such as systems, methods of

organization, and techniques. It is an ever-evolving body of knowledge that both

shapes and are shaped by societies. The proliferation of new technologies, such

as computers, has left some people believing that technology is a determinant

force in society, or in other words, that it is an autonomous agent that drives

change (Ferri,2009). Arthur (2009, p.28) gives three definitions of what

technology is, “The first and most basic one is a technology is a means to fulfill a

human purpose. As a means, technology may be a method or process, or device,

it may be complicated, it may be material or it may be nonmaterial. Whichever it

is, it is always a means to carry out a human purpose. The second definition is a

plural one: technology as an assemblage of practices and components. This

technology is also the

entire collection of devices and engineering practices available to a culture.”

Alverina. et al. (2019) concluded in their study that technology is now

growing very fast and can help us in opening up new businesses or job

opportunities. In modern times technology now can provide convenience for

people who want to do business, especially young sellers because it is easier,

more comfortable, more efficient, and more economical. It is suitable for

consumers that enjoy the convenience of purchasing products with the detailed

product so that they can know and compare with other products. Technology

nowadays offers transactions with easy payments such as transfers and six other

payment methods that have been provided which can be done anywhere and

anytime. Then, in terms of security is guaranteed to avoid fraud because Shopee

will identify it if that happens. Business competition in technology like this is very

competitive. Therefore, we need to create a business that attracts enthusiasts

such as following the times and creatively so as not to lose out in competing with

other same businessmen using this technology.

Technology will be your right hand and source of knowledge. Thanks to

technology, we will be able to produce better decisions, make forecasts,

innovate, and optimize continuously for a more efficient business operation

(Planon,2020). Technology is, therefore, set to become even more important than

it is today and it will be offering endless opportunities. The current pace of

innovation is extremely high and technology and software are becoming less and

less complex and more and more accessible (Knops,2022). The role of

technology in business is vital. In the last decades, technology has provided a

new and better approach how to manage business making transactions faster,

more efficient, and more convenient. Technology is changing many areas of

business such as accounting, data collection, logistics, and sales and promotion,

among others. Technology has a big impact on business operations. No matter

the size of your company, technology can bring many benefits that will help you
increase revenue and make and produce the goods your customer’s demand.

The main role of technology in business is to drive growth and improve

operations. Without technology, companies would almost certainly fail to

accomplish all that there is to do. (Melo, 2018)

Decentralization

Every company has to decide how to approach management and

decisionmaking. Changes in technology, customer expectations, and workforce

expectations make the decision more important than ever. Decentralization in

business is when daily operations and decision-making power are delegated by

top management to middle-and lower-level managers — and sometimes even

team members. Organizations with a decentralized structure allow upper

management to focus more on growth opportunities and major decisions, rather

than day-to-day duties. The key idea behind a decentralized approach is giving

authority and responsibility to those who know best — since they’re closer to

stakeholders and have relevant information available to them. (Wool, 2021).

Centralization, or decentralization, is closely related to the delegation of

authority. It is concerned with the degree and quantum of authority to be

centralized or decentralized in a formal organizational structure. In the modern

context, decentralization is treated as ‘more freedom,’ or ‘less authorization.’ It

takes both- a managerial philosophy and a technique. Decentralization is a result

of delegation. Span of control and decentralization are closely associated. It

offers certain benefits, like fewer burdens to top management, facility for growth
and diversification, and encouragement to managers by providing opportunities,

easy evaluation of results, promotion of healthy competition, effective control,

reduced number of managerial levels, and so forth. Rudani (2011, p.192-193) It

is the fundamental phase of delegation. Rao, et al (2010)

Financial Performance

The most significant aim of businesses, which are an integral part of the

economic system, is to create value maximization. The financial performance of

businesses plays a key role in achieving this aim. Financial performance analysis

is an effective criterion for businesses to achieve their goals, adapt to changing

conditions in the market, improve the way of doing business, and to be able to

take measures against possible problems. Therefore, financial performance is an

increasingly important issue not only for businesses but also for economies of

countries. Financial performance evaluation helps businesses to make the right

decision and to fulfill their planning and control functions effectively. (Güngör, et.

al, 2020) Financial Performance in a broader sense refers to the degree to which

financial objectives are being or has been accomplished and is an important

aspect of financial risk management. It is the process of measuring the results of

a firm's policies and operations in monetary terms. It is used to measure a firm's

overall financial health over a given period of time and can also be used to

compare similar firms across the same industry or to compare industries or

sectors in aggregation.

(Verma, 2022)
Market Performance

Marketing performance is a benchmark in assessing the success of value

creation which is a combination of strengthening innovation capabilities and an

indepth understanding of market orientation. In order to improve marketing

performance, value creation must be based on the right market orientation to

understand customer needs and desires. Market orientation is then realized in

the value of products that are unique and able to meet the needs and desires of

customers. (Zulfikar, 2018)

Market performance is also a key indicator that reflects business

performance. Market performance can be shown by the increase in market

share.

(Zhang Chi & Seock-Jin, 2017) The final measure of market

performance examined is insurers’ profitability. Firms’ profitability is an important

market performance outcome. In an efficient, competitive market, long-run profits

would be expected to provide firms with a ‘fair’ rate of return equal to their

riskadjusted cost of capital. If firms’ profits are too low and they are unable to

remedy the deficiency, it will encourage market exit or retrenchment that could

have adverse effects on consumers (Klein,2012).

Customer Satisfaction

In simple words, customer satisfaction is a measurement that determines how

well a company’s products or services meet customer expectations. It’s one of

the most important indicators of purchase intentions and customer loyalty. As

such, it helps predict business growth and revenue. (Szyndlar, 2023)

Every business organization`s success depends on the satisfaction of the

customers. Whenever a business is about to start, customers always come “first”

and then the profit. Those companies that are succeeding to satisfy the

customers fully will remain in the top position in a market. Today’s business

company has known that customer satisfaction is the key component for the

success of the business and at the same time it plays a vital role to expand the

market value. In general, customers are those people who buy goods and

services from the market or business that meet their needs and wants.

Customers purchase products to meet their expectations in terms of money.

Therefore, companies should determine their pricing with the quality of the

product that attracts the customer and maintains a long-term affiliation. The

organization should make sure that they are providing full service, equivalent to

their monetary value. This will increase the number of customers and holds the

long-term relationship between the customer and the organization. And the

existing customer will help to attract new customers by providing or sharing

information about the products and services of the companies. One of the

important aspects to ensure the attention of the customers is to provide the best

and the most favorable products in this competing market. If a customer’s

satisfaction is earned, then it is sure that customer loyalty will also come along

with it. Moreover, in the absence of the customer, a business organization would
not exist. In order to increase the number of customers, the development of

customer satisfaction is very important. (Khadka & Maharjan, 2017)