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A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading credit card company
What type of benchmarking is the company using? Sir answer is functional
I always face this confusion between functional and competitive benchmarking, now here it says it’s benchmarking the performance of its account receivable with that of leading, that means the function is similar that company is also related with credit but it’s leading that’s why manufacturing wants to ensure if it’s doing its best or not against that company how is it not competitive benchmarking sir?
Competitive would be if they were both in the same business (and so competing with each other) and so we were looking how well their business was performing.
Here they are not in the same business at all but we are just looking at how well the accounts receivable function is performing / functioning.
Sir there is mcq comparing bus kilometres travelled with those of a rival bus company, they’re comparing their bus with other company, only because it’ says rival so it is competitive, but if it wouldn’t have mentioned rival, it would be functional?
Even if they had not used the word rival it would still be competitive because they are in the same business and are comparing something that indicates whether they are doing better or worse than the other company.
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