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ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation

Marrow Foods has five regional bakeries. The board finds that the Northern bakery makes 18% less waste per tonne than the other four, and asks the Northern manager to document and share its methods. What is the main limitation the board should bear in mind about this approach?

The main limitation is that internal benchmarking only finds the best practice inside the group. Northern bakery may be better than its sister units yet still lag the wider industry, so the board could settle for mediocre standards without external comparison.

  1. AInternal benchmarking can only reveal best practice within the group, which may not be best in the industryCorrect
  2. BInternal benchmarking requires disclosure of confidential data to rivals
  3. CInternal benchmarking cannot be applied to production processes
  4. DInternal benchmarking is only valid when units have different products

Explanation

Internal benchmarking is easy to access and low-risk, but it is limited to the best within the organisation. Northern may still be well below the industry standard. No rival data is shared, so confidentiality with competitors is not the issue.

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