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The current state of theory-building in the field of operations and supply chain management (OSCM) is in a strong need of rigorous, empirically based theories that enhance understanding of the causal relationships between the structural elements and properties of the business processes. In this research note the authors propose the critical realism (CR) philosophy of science as a particularly suitable philosophical position (not to the exclusion of others) to review the mechanisms of OSCM knowledge generation and to provide philosophical grounding and methodological guidance for both OSCM theory building and testing.

To demonstrate potential benefits of CR-based structured approach to knowledge generation in OSCM research, this conceptual paper uses a case study that illustrates the adoption of one of the OSCM theories – i.e. the theory of swift, even flow.

CR interprets the accumulated empirical information about OSCM phenomena as observable manifestations of the underlying causal mechanisms that cannot be perceived otherwise. CR can provide epistemological support to the choice of performance measures that manifest the underlying causal mechanisms of interest. Extensive accumulation of empirical data from multiple innovative sources will not dramatically add to understanding of the system under investigation, unless and until the underlying causal mechanisms that trigger the observed behaviour are identified and tested. The CR abductive mode of reasoning emphasises the role of uncertainty in complex process behaviours and can facilitate enrichment and refutation of OSCM theories.

CR has a clear potential to contribute to OSCM research by enabling better understanding of causal relationships underlying complex behaviours of different elements of business process by providing robust and relevant mechanisms of generating knowledge about business processes that explicitly link empirical and causal aspects of theory building and testing.

The purpose of this paper is to investigate the regulator's attempt at redesigning the patient care process (PCP) – a core business process in public hospitals – by introducing dichotomous process performance indicators as an innovative management tool intended to align the State health care policy with the everyday management of operations at a hospital ward.

The paper presents an ethnographic case study of redesigning the PCP according to the strategy originating outside the organization. The study employs competing theories that represent alternative epistemological and ontological views of the world in order to produce a tentative explanation of why the intended redesign of the PCP has not fully eventuated. Observational data and opportunistic interviewing are used to answer the research question of whether and how the information and operational flows on the ward were affected by introduction of process performance indicators. A business process redesign framework was employed for data analysis since it better reflects the objectives of the State‐wide initiative and offers a convenient tool in dealing with data complexity.

Introduction of the process performance indicators did not result in redesigning of the PCP as intended by health care authorities. Out of four process performance indicators, only one was consistently implemented, which merely produced a duplication of the previously collected information, therefore adding no value to the PCP. On a theoretical level, the results indicate that the emergent theory rather than the rational agent theory demonstrated a greater fidelity to the empirical observations.

The paper assessed the feasibility of using innovative dichotomous process performance indicators as a tool for redesigning the business process at the ward level, in order to achieve macro‐level policy objectives. The failure to successfully implement a top‐down universal approach to redesigning business processes in health care is likely to reflect a lack of appreciation of emergent rationality that characterizes essential aspects of the PCP.