Two of the major characteristics of the new production paradigm known as leanproduction are: the pursuit of excellence in terms of a suitable mix ofperformance and continuous improvement[1,2]; rethinking work organizationin order to gain a flexible and effective organizational structure[3].In this article we show that the pursuit of excellence and the organizationalchange required by lean production leads to a management-by-processorganization, and that management by process influences the performancemeasurement system (PMS).The case study presented as an example is Zanussi-Electrolux – the largestEuropean producer of domestic appliances, which has introduced managementby process into most of its plants. The article provides a detailed analysis of theorganizational change and its effects on performance measurement.