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Dear Sir,
Benchmarking is process of comparing the performance of an organization on any parameters or performance of division / department within the Organization with the best available practice around either in the same organization or industry or Competitor.
Thus purpose of benchmarking is to compare with best so as to bring about improvement in the process makes it obligatory that comparison has to be with the best one.
In ACCA December 2014 P5 Exam, we were advised to do benchmarking of the Organization with an Organization which was far below in terms of performance. My query is – could it be like this ! As, if we compare ourselves with Organization which is not even at par with us and / or below us in terms of performance, what my Organization is going to learn / gain in the process.
In fact it would be harmful to the extent , that it may bring complacency in my Organization that we are better than other one ( which was already to lower side of performance).
Kindly give your comments in the matter.Deep
GM is B’s major competitor so it is always worth comparing yourself to that even if you turn out to be doing better on every measure. Until you do the comparison you don’t know if you are better or worse.
Here, for most measures, B is better than GM, but as the answer says, GM’s revenue is greater and it has 14 out of the 20 major customers (to B’s 13) because automotive lets B down somewhat.
Obviously, if there were an organisation doing very much better than B, a lot might be learned from benchmarking against that.
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