Business Management

1. Please fully describe the benchmarking process (advantages and disadvantages).

According to Wheelen & Hunger (2012) Benchmarking is “the continual process of measuring product, services, and practices against the toughest competitors or those companies recognized as industry leader.” In addition, benchmarking is based on the concept that it makes no sense to reinvent something that someone else is already using; it using to measure cost, time and quality.

There are several key advantages to using benchmarking process in organization strategies: to reduce the labor cost, improving the quality of the products, increasing sale and profits for business units. (Suttle, R., n.d)

On the others hands, disadvantage of benchmarking process are: it is difficult to convince the competitors for sharing data; many constraints, such as legal, ethical and trade secrets prevent the success; it restricts the creativity in the process of improvement. (Distadvantage of Competitive Benchmarking, n.d)

2. Explain in detail when and why a firm should employ this process.

If the top management level applied the benchmarking process in proper mainly way it will help the organization performance improvement in key areas and obtaining more advantage competitive over their competitors. However, benchmarking process will also the organization in establishing goals and measurement of performance.

Reference:

Suttle, R. (n.d). The Advantage of Benchmarking for an Organizastion. Retrieved on May 8, 2013 from: http://smallbusiness.chron.com/advantages-benchmarking-organization-30952.html

Unknown author. (n.d) Disadvantage of Competitive. Transtutor.com. Retrieved on May 8, 2013 from: http://www.transtutors.com/homework-help/industrial-management/benchmarking/disadvantages-of-competitive-benchmarking.aspx

Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy, toward global sustainability. (13 ed.). Boston: Pearson Prentice Hall.