What are the advantages and disadvantages of setting up benchmarking in a company?

The globalization, economic pressure and the competitive environments put he companies and at the same time the managers in delicate positions. They have to deal with daily crucial decisions in order to well run the business, improve the firm's performances, or in some cases “just survive”.

The improvement of organizations could be done by the managers in intern or by looking outside to find new and innovative methods and best practices in order to lead their organizations to the highest standards possible. Specifically, leaders need to help identify performance gaps and then help set goals that encourage the search for knowledge to narrow and solve these performance gaps.

First of all, a definition of benchmarking must be given, “The benchmarking is a rigorous and consistent system of comparing and measuring an identified section or element of operations with similar undertakings enacted by a selected other and ascertaining how improvements can be designed and implemented to improve the processes and outputs” (Davis and Girdler, 1999:11).

Bogan and English (note that benchmarking is the systematic process of searching for best practices, innovative ideas, and highly effective operating procedures that lead to superior performance. Best practice benchmarking, considering the experience of others, is a fundamental approach to managing in today's work world.

Advantages & Disadvantages:

  • Benchmarking improves communication.
  • Benchmarking is a difficult process that requires much commitment to succeed.

M. Davis, D. Girdler, Best Value, Skills for best Value, Benchmarking, Institute of Leisure and Amenity Management, 1999.
C.E. Bogan, M.J. English, Benchmarking for best practices: winning through innovative adaptation, McGraw Hill, 1994
Benchmarking, An International Journal,

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