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ACCA Strategic Professional · Advanced Performance Management · Performance improvement models and techniques

Brightwater Hospitals Group has 12 hospitals. Management finds that the three best-performing hospitals discharge patients on average 1.5 days faster than the rest, and plans to roll out their discharge process group-wide. Which of the following is the most significant limitation of this internal benchmarking approach?

The key limitation is that internal benchmarking only finds the best practice inside the group, which may fall short of what leading organisations outside achieve. It does identify unit differences, needs no competitor data, and is usually cheaper than external benchmarking.

  1. AIt cannot identify any differences in performance between units
  2. BIt may only identify the best practice within the group, which could be well below the best practice available externallyCorrect
  3. CIt requires the sharing of confidential information with competitors
  4. DIt is always more expensive than external benchmarking

Explanation

Internal benchmarking is easy and cheap but is limited to the group's own standards, so the best internal performer may still be poor compared with the wider world. It does identify differences between units, involves no competitors, and is generally cheaper, so the other options are wrong.

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