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Management, Ch. 16: Control Systems and Quality Management: Techniques for Enhancing Organizational Effectiveness
Benchmarking of Best Practices
Benchmarking gives companies the ability to use it to achieve a competitive advantage. External benchmarking can assist in understanding the industry standards and in the development of best practices. Organizations that focus on external benchmarking develop processes that can be beneficial in developing consistent continuous quality improvement initiatives. However, sometimes companies will make a strategic decision to "lead" an industry (Wal-Mart comes to mind as several initiatives became industry best practices forcing other big box retailers to attempt to benchmark their processes). By doing this they force the industry to adopt or compare against the standards they set. As an industry leader there is a lot of control to be had by taking such a position.
Class: Has there ever been a time when the external benchmarking was not beneficial? Why or why not? How does the financial institution determine if the benchmarking is needed? Can anyone think of a company that would act as an industry leader? Why?
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