Overview Of Benchmarking Theory Management Essay

Overview Of Benchmarking Theory Management EssayBenchmarking theory is pass oned upon the effect comparison, fault, and changes in the centering run (Watson, 1993). A literature analyse too shows that majority of bench marking method actingologies perform the same(p) function as instruction execution gap analysis (e.g. Camp, 1989 Karlof and Ostblom, 1993 Watson, 1993). In a context of waste, first rule of benchmarking is to watch everywhere the accomplishment gaps with respect to generation and utilization at bottom a solicitude organisation and to develop method to close them. The gap between familiar and external comes reveals the changes and at the same time diametriciates benchmarking theory from comparison seek and warlike analysis. The author explained further that free-enterprise(a) analysis focus on convergence or service comparisons but benchmarking examine the operating and management skills that is use to produce goods and services. More also, competit ive analysis looks at the device characteristic of competitors in the same geographical location whilst benchmarking seeks to find the outgo coiffes disregardless of location. (Walleck et al., 1991).Benchmarking has been defined by numerous a(prenominal) authors due to its positive and negative end affecting the triumph of transaction changement within the musical arrangement. The literature review of Kozak, 2004, original sources Camp, 1989 Zairi, 1992 Smith et al., 1993 Rogers et al., 1995, explained that benchmarkingEnable memorial tablet to ascertain the position they dedicate more strength and weaknesses depending upon charges in supply, demand and grocery place condition.Enables to set tonic threadbare and objectives to deepen customer satisfaction in term of quality, cost, product and services.It gives employees unfermented standard knowl progress to work on and also motivate them to always strive for more avail.Enable brass section to determine the rea listic level of public presentation they could attain by looking at opposites and to what expiration they could achieved such carrying into actionHelp organization to stimulate continuous cognitive process which forget give them competitive edge over others and enables it principal(prenominal)tain adult male class standard.Despite the above benefit, a successful benchmarking researcher Bendell (1993) verbalize that time constraints, competitive barriers, cost, lack of both management commitment and headmaster human resources, resistance to change, poor planning and short-term expectations are regarded as barriers. The author further noted that poor execution of benchmarking exercise skunk lead to waste of time, finance and human resources.Elmuti and Kathawala( 1997) illustrate that there is no single best practice of benchmarking because peoples ideology varies and organization concept and system differs from one another.On a contrary, there is a risk elusive in benchmar king others and pading their new standards into ones own comp some(prenominal). However, the best practice which is producing forthstanding achievement with good examples should be perceived and adopted.harmonize to research, benchmarking has been defined by many authors and organization even though each definition aims to reach same conclusion. Nevertheless, benchmarking was basically stems from Demings quality management theory, which aims to enhance quality and check its sustainability by take aftering several stages in gear up( Kozak 2004, p5). Websters Dictionary defines benchmark as a standard by which something can be measured or judged (Kozak, 2004 p. 5). chase away and Robert C. Camp at the end of the 1980s gave most widely judge and referenced text on the subject of benchmarking as the continuous process of measuring our products, services and practices against the toughest competitors or those companies recognized as industry leading (Camp, 1989). On a simply note, benchmarking is the process of finding the best practice in an organization and forecasting what performance should yield in the future. The trey principles of benchmarking are maintaining quality, customer satisfaction and continuous improvement. (Kozak 2004, p.5, original source Watson, 1993). just about author sees benchmarking as a continuous process or quantity while others defined it as finding and looking significance things to enhance an organization performance. For example, Vaziri (1992) defined benchmarking as a continuous process of comparison organizations performance with that rated as the best within the industry considering consumers necessitates and ascertain what needed to be improved in order to have competitive edge in the future. Similarly, Watson (1993) also emphasizes benchmarking in term of continuity lineament referring to the continuous input of information acquired from benchmarked organization into the organization. Geber (1990, p. 36) based his de finition at significance focus on the best practice of benchmarking as follow a process of finding the initiative examples of a product, service or operational system and then adjusting your products, services or systems to meet or beat those standards.Approaches to definitions of benchmarkingAdopted from (Kozak, 2004. Destination Benchmarking)In practice by many organizations, benchmarking process usually encompasses the followingRegularly analyzing and comparing aspect of performance with high class-conscious organizationIdentifying the performance gapsEstablishing fresh method to improve on such performancesContinuous tracking the implementation improvement andBy continuous monitoring progress stages and assessing the benefitTypes of benchmarkingDue to many applicable literature reviews, it could be seen that there are many classification of benchmarking, the main categorization are internal, competitive and functional benchmarking (Kozak 2004, p.10 original authors Camp, 1989 Zairi, 1992). Kozak (2004,p.10) further categorise benchmarking into two parts internal and external benchmarking, in same context, competitive and functional benchmarking was classified under external benchmarking.INTERNAL BENCHMARKING inhering benchmarking is regarded as two ways communication and sharing information between departments within the same organization or between organizations operating as a branch in different countries (Cross and Leonard, 1994 Breiter and Kline, 1995). This kind of system can be found in a franchising company whereby an outstanding performance by any part of the organization will be learnt by the other. Internal benchmarking is an added advantage to an organization or partner who per centums a common language, grow and systems, having easy access to data, and giving a baseline for future comparisons (Breiter and Kline, 1995). impertinent BENCHMARKINGIt is an opposite or reverse case of internal benchmarking as it was transform in many relative literatures. External benchmarking requires comparison of activities with external organization in order to acquire method, new ideas and knowledge using by the organization to attain such an outstanding performance in the work of goods and services. Kozak (2004, p11) noted the objective of external benchmarking as the persistence in improvement of ones performance by measuring and comparing with that of others and determine how others achieve their performance levels. This type of benchmarking provides opportunities for an organization to learn from the best practices and experiences of the others who have the competitive edge in the industry. The consistent review of benchmarking by Kozak (2004, p.11) has brought up another tether subcategories of benchmarking which are competitive, generic and relationship benchmarking.Competitive benchmarking this type of benchmarking occurs solo among the propose competitors. According to Kozak (2004) explains that competitive benchmarking is regarded as the most sensitive type of benchmarking activities because of it difficulties in achieving an applaudable collaboration and cooperation with direct competitors and reach primary sources of information. For example turn backs market shares starts to diminish because of the entrance of new competitors. so the management decided to benchmark its performance with competitors within the same industry. The results of this enhance its financial position, stabilized its market shares and increase its customers satisfaction. (Cook, 1995).Functional benchmarking Functional benchmarking refers to comparative research and attempts to seek world-class excellence by comparing crinkle performance not only against competitors but also against the best businesses operating in similar field and performing similar activities or having similar problems, but in a different industry (Kozak, 2004, original sources Davies, 1990 Breiter and Kline, 1995). For instance British Rail cybersp ace South East benchmarked British airways in order to improve the standard of cleanliness of trains. They were able to achieve such aim by the survey that was conducted on British airways mode of cleanliness. (Cook, 2005). Moreover, this type of benchmarking makes it easier for best in class organizations to share new ideas, best practice and experience together and it is as hygienic regarded as non- competitive benchmarking (Kozak 2004, p.12).Relationship benchmarking This type of benchmarking occurs between organizations that have vernacular relationship together before the agreement of benchmarking is sealed (Anderson, 1995). This method potentially whitethorn provide some benefits to organizations since less time is required and the affirm established between the two parties will help break lot confidentiality barriers. Cox et al. (1997) call this collaborative benchmarking.Benchmarking best practiceHistorically, benchmarking is seen as an inwrought tools for continuous im provement of goods and services in an organization ( Dattakumar and Jagadeesh 2003). For example Xerox Corporation in the united state was the first company to be credited with a successful benchmarking project in 1979.Nowadays, organizations have realised that in order for them to survive in the nearest future, they have to novice major changes within their organization that will make them more nut-bearing and reduce costs. benchmarking goes beyond just competitive analyses, rather than analyzing organizational processes and method to assess how the competitive edge is achieved. Benchmarking against Best practice requires seeking out the undisputed leader in the process that is critical to business success regardless of sector or locations. I.e using the most effective methods of achieving best performance leading to superior performance is the process of benchmarking for Best Practices identifying, sharing, and transfer knowledge, innovative ideas, and highly effective opera ting procedures related to best business practices, inside and outside your organization (Julian L. Aston and Jonathan A. Goldhill). In a nutshell, the achievement of any organization is to successfully identify and applying best practices in its operations which will result to reduction in business expenses and improve its organizational efficiency.In order for benchmarking process to be achieved in an organization, the follow steps need to be initiated and implemented (Julian L. Aston and Jonathan A. Goldhill) graduation 1 The management needs to establish a lead Best Practices group that will be sedulous with overall development and company-wide implementation of this important new activity. In addition, creates departmental benchmarking teams charged with development and implementation of Best Practices within their individual department. quantity 2 Each team determines the types of Best Practices their department must uphold.Step 3 Teams identify benchmarking resources applic able to their Best Practice needs.Step 4 The teams collect and canvass information.Step 5 Each team determines the valuate of each Best Practice relative to attaining departmental and overall corporal objectives.Step 6 Team members take the time to understand and analyze the point gap between an existing standard or practice and the desired best practice standard.Step 7 Each team brainstorms how they can close the point gap, and develops an action plan in confine of upholding each Best Practice.Step 8 The teams take action under the leadership and guidance of the Lead Best Practices Team, reporting to Senior Management.lastly in order for the implementation of a Best Practices Program to be successful, establishment of departmental Best Practices teams must be initiated and charged with the labour of managing the process on a continuous basis.Best Practices ExampleA vivid example of a best practice is demonstrated by SRC in Springfield, Missouri.Convinced that everyone is respo nsible for the companys success, SRCs management team trained every employee in cash flow management, a tool that has enabled the company to gift double-digit growth every year since its founding 12 years ago. SRC has bounteous in 12 years from one company of 100 employees to 12 employee-owned companies in 16 sites with 750 people. SRC has been named the Entrepreneurial Company of the Year by Inc. powder store for the last three years. The current turnover rate is less than 1 percent. http//www.qualitydigest.com/feb/bench.htmlDIFFERENCE BETWEEN BENCHMARKING AND BEST PRACTICESAre benchmarking and best practices the same?According to many literature reviews, it could be understood that benchmarking is totally differ from best practices. Benchmarking is the process that gives one the opportunities to ascertain potential best practices, i.e. identifying best ranked performer one to locate a specific practices within an organization that could enhance own performance. However, there a re different categories of benchmarking which organization competency practice and it was understood that some organization benchmarked for the purpose of setting performance target for their own organization rather to ascertain practices that contributed to the success of other organization and to emulate it.What distinguishes best practices from benchmarking?A best practice is never a new idea, perhaps is what meets the seven following criteriaSuccessful over Time A best practice must be documented. quantitative results The achievement must be quantifiable.Innovative Must have a distinctive program and process from its peerRecognized positive result Best practice should generate different positive result and indicatorsquotable A best practice should be adopted with modifications. Should establish different strategies and be able forecast benefits that are likely to be come down to others.Has local importance Best practice is seen as an outstanding performance to those who seek for it. Therefore, it should not be a duplicate strategy i.e organizations should adopt it with modification.Not linked to unique demographics A best practice may have evolved as a result of unique demographics, but organization from other demographics should be able to transfer with modification. http//www.scribd.com/doc/83467243/14/DIFFERENCE-BETWEEN-BENCHMARKING-AND-BEST-PRACTICES.In conclusion, although different authors views benchmarking from their different perspectives as it is demonstrated in the figure () . alone these definitions portray same aim and objectives the continuous measurement and improvement of an organizations performance against the best in the industry to obtain information about new working methods or practices (Kozak 2004, p.7). However, best practices and methods that are seen as the success constitute to an organization may not necessarily be the best to those adopting it. Therefore benchmarking requires full scale modification and extensive innovatio n in order for justifiable achievement to be attain.