CMA Final · Strategic Cost Management · Benchmarking
Which type of benchmarking compares a firm's processes with those of a best-in-class organisation in a different industry, for example a hospital studying the check-in process of a hotel chain?
This is generic or functional benchmarking. It compares a specific process with the best performer in any industry, not only rivals. A hospital studying a hotel's check-in process is a cross-industry comparison, unlike competitive benchmarking (direct rivals) or internal benchmarking (units within the same firm).
- AInternal benchmarking
- BCompetitive benchmarking
- CGeneric (functional) benchmarkingCorrect
- DStrategic benchmarking of financial ratios only
Explanation
Generic or functional benchmarking looks at similar functions or processes in any industry, choosing the best performer irrespective of sector. Competitive benchmarking restricts the comparison to direct rivals, and internal benchmarking compares units within the same firm. So the hotel check-in example is generic benchmarking.
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