8

BENCHMARKING

What is this practice and how effective is it?

Benchmarking enables firms to compare their performance with best-in-class results elsewhere. It entails analyzing in detail the performance of companies deemed to be best in class at performing certain processes and activities. Moreover, these companies need not necessarily be in the same industry as the analyzing company. The focus is on the ability to perform selected activities well, such as billing, distribution, and customer service. But comparing apples with apples can be difficult, and benchmarking can lead to a culture of blame and thus the wrong management behavior. We will look at how to use benchmarking in a positive way to stretch performance.

Alternative names and related ...

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