Question

Which of the following statements regarding benchmarking is false?

A. Benchmarking, in practice, usually involves a company's formation of benchmarking teams.
B. Benchmarking involves continuously evaluating the practices of best-in-class organizations and adapting company processes to incorporate the best of these practices.
C. The benchmarking organization against which a firm is comparing itself must be a direct competitor.
D. Benchmarking is an ongoing process that entails quantitative and qualitative measurement of the difference between the company's performance of an activity and the performance by the best in the world or the best in the industry.

Answer 1

Benchmarking does not require comparing against direct competitors, but against best-in-class organizations to improve performance.

Step-by-step explanation:

The false statement regarding benchmarking is C. The benchmarking organization against which a firm is comparing itself must be a direct competitor.

Benchmarking is a process where companies evaluate and compare their practices with those of best-in-class organizations in order to improve their own performance. It does not necessarily require the benchmarking organization to be a direct competitor. Companies can benchmark against organizations in different industries as long as they have similar processes or activities to be improved.

For example, a manufacturing company can benchmark against a high-performing logistics company to improve its supply chain process, even though they are not direct competitors.