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MNG992DL
Competitive Benchmarking

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Lecture 4

Criticisms of Benchmarking

Despite all of the positive recommendations for benchmarking cited, there are critics of the benchmarking proces. Wolverton (1994) states that benchmarking, as a cornerstone of CQI, is based only on current information, and may not give us the freedom and flexibility to see the future. In addition, Wolverton adds that this focus may relegate us to the role of follower, instead of leader. In writing about a related quality improvement technique, Business Process Reengineering (BPR), Hammer and Champy (1993) add that:

The problem with benchmarking is it can restrict the Reengineering team’s thinking to the framework of what is already being done in its company’s own industry. By aspiring only to be as good as the best in its industry, the (Reengineering) team sets a cap on its own ambitions. Used this way, benchmarking is just a tool for catching up, not for jumping way ahead (Hammer & Champy, 1993, p. 132). This is an important point, because many business writers believe that benchmarking involves only examining the same institutional sector, i.e. computer manufacturers should only benchmark computer manufacturers. However, we have seen that functional and generic-type benchmarking do reach across industries, and can indeed "jump way ahead." In addition, it must be remembered that benchmarking is only one of many quality improvement tools that business managers can use in different situations. Since reengineering involves "a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance . . ." (Hammer & Champy, 1993, p. 32), benchmarking may be appropriate only where the process can be improved immediately by this method, and not need a complete redesign as provided by reengineering. On the positive side, Hammer and Champy do state that benchmarking can help a reengineering team by sparking new ideas, especially if companies are benchmarked from outside their own industry.

Robert Pedersen, from West Virginia University, questions the applicability of all recent quality improvement techniques, and states that benchmarking and TQM are merely strategies for marginally improving existing processes, and seek to bring results more closely in line with expectations (Pederson, 1992). He believes that the costs of such analyses frequently outweigh any possible benefits, and lack strategic vision. Another colleague in Great Britain, David Kerridge, adds that the whole concept of benchmarking is foreign to the true Deming philosophy, and states that organizations do not need to know how good they are now and how they compare with others in order to make improvements (Kerridge, 1995). Although these comments are anecdotal in nature, they are useful for understanding the concerns one may hear, and have largely been addressed by the true definition of benchmarking as discussed earlier.

At a recent conference of the American Assembly of Collegiate Schools of Business (AACSB), a workshop was offered on benchmarking and Management Education Teaching and Curriculum (Bateman, 1994). The discussion focused on how benchmarking was used for improving teaching and curriculum in the Graduate School of Business at the University of Chicago. For purposes of discussion, the following "straw objections" to the benchmarking were offered to the workshop participants:

Most of these concerns were addressed as well in previous lectures on the definition of benchmarking and what it has to offer, such as W. Edward Deming’s comments on the hazards of copying without adapting. Other researchers such Dr. Howard Gitlow have stated that an "example is no help in management unless studied with the aid of theory. To copy an example of success, without understanding it with the aid of theory, may lead to disaster" (Dale, 1995, p. 12). Plagiarism and industrial espionage could indeed be disastrous, but can be avoided if the benchmarking is done properly and the code of conduct is followed. The lack of opportunity for innovation was also addressed in the previous discussion of benchmarking and its relationship to reengineering. Real innovation and breakthrough processes can be achieved, especially if an organization goes beyond just benchmarking competitors, and does industry or generic benchmarking of world-class leaders and adapts the processes back to the home industry. Benchmarking offers the ability to look externally at a very closed-minded organization or industry, which may believe that any processes not invented within are inferior. In addition, most benchmarking minimizes exposing organizational weaknesses, because the processes being examined are often not that confidential and the benchmarking partner may be in a completely different industry.

Summary

Despite these concerns and criticisms, the fact is that benchmarking is currently being used successfully in many organizations. As stated earlier, it is important to remember that benchmarking is more than just obtaining comparative numbers, it is part of a learning process within an organization. Bogan and English (1994) comment on the difference between benchmarking and benchmarks, and state that "benchmarks (italics added) are measurements to gauge the performance of a function, operation, or business relative to others" (1994, p. 4), whereas benchmarking is the "ongoing search for best practices that produce superior performance when adapted and implemented in one’s organization" (1994, p. 4). Since institutions in today’s information-based economy value hard data, using benchmarking to improve business processes is a natural extension of what drives corporations to succeed.

Bogan, C. E., & English, M. J. Benchmarking for Best Practices. In Brewer, P. B., Hale, C. D., & McLaurin, S. (1996). Benchmarking Academic Credit and Noncredit Continuing Education. The Journal of Continuing Higher Education, 44(1), p. 3.

Dale, B. (1995, October 30 & 31, 1995). Practical Benchmarking for Colleges and Universities. Paper presented at the AAHE Workshop, Key Biscayne, Florida.

Kerridge, D. (1995). Continuous Quality Improvement Issues in Higher Education. In S.Brigham (Ed.), Problems with Benchmarking . cqi-l@MR.Net: American
Association of Higher Education.

Hammer, M., & Champy, J. (1993). Reengineering the Corporation: A Manifesto for the Business Revolution. New York: HarperCollins.

Pederson, R. (1992, September 23, 1992). The Perils of TQM for the Academy. The Chronicle of Higher Education, pp. B4.

Wolverton, M. (1994). A New Alliance: Continuous Quality and Classroom Effectiveness.

ASHE-ERIC Higher Education Report No. 6. Washington, D.C.: The George Washington University, School of Education and Human Development.

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