This study will evaluate the issues of benchmarking as a measure of performance in the organisation and the study will hence consider a critique to the question of benchmarking.
There are a number of measures that an organisation can use to evaluate its position and the measure used may need to be considered along various aspects that are specific to the company's future. It is crucial that the company understands its future needs and its current position or at least know its objectives well, before embarking on the measure to be used. In this study, various schools of thoughts have been given that outright casts doubt as to whether benchmarking can be the best choice that organisations might take. It is hence importance that the study is conducted with a view to gain further understand about the issues surrounding bench marking as a method and hence be able to create knowledge or at least make a conclusive but well researched judgement about benchmarking as a measure.
The research will make use of both the primary and secondary methods of data collection since the use of both the methods provides the advantage of both of them.
Introduction
For most organisations the need to compete in the industry is always supported by the need to have a clearer understanding of their performance in the industry. It is important for a company to what it can and what it cannot do, but such capabilities can only be defined by the kinds of workers in the organisation (Gamble, Strickland, Thompson, 2007). Due to globalisation and other factors leading to scarcity and competition, there is a greater need to fully appreciate where the company is on the competition ladders as a way of seeking further ways to over come such competition. The management must therefore have in place measures to evaluate how the company is performing as a means to understand what the company can and cannot do.
There are a number of measures that a company may use to evaluate its level of performance and so the question is not if such measures exist but what among these is the best measure.
When an organisation seeks to find out about its performance, it is important to evaluate what is meant by performance, could it be about efficiency (ibid)? Which might again be evaluated by levels of production or absenteeism or labour turnover? Or could performance be evaluated by reduction in costs of operations, or cheaper sources of raw materials or even high revenues due to increased marketing activities?
These are in the view of this report, very fundamental questions that must be asked.
The importance of this research stems from the fact that most organisations are on the forefront of seeking to achieve higher performance but are not aware about how to this (Simon, 2005). It is therefore of greater importance that such a study is conducted in order to evaluate whether a certain approach to performance measurement will be the most ideal.
This then calls for an analysis the method selected and in this research, the method that will be evaluated is the benchmarking method.
According to Neely (2002); Anand, Kodali (2008), benchmarking is the process of using market or industry 'players' to evaluate the company's position with a view to finding out if the company's processes are better than those of the competitor.
It is the view of this paper that, the best gauge of the company's position is to use a company that is or appears to be above the company in question. This is based on the notion that one wishes to compete well, the best measure is to compete with the best (Ittner and David 2003).
The intentions of the researcher are therefore informed by the fact that there are a number of companies which compete for the same marked how come some of them are doing very well in the industry? What methods do such companies use and what are the principles of using such methods?
The hypothesis held by this research so far is that benchmarking as a method is crucial as a measure for continuous improvement and performance in the company and hence it should be used. This is what the researcher will seek to approve and if otherwise, from the information that will be evaluated, disapprove.
Literature Reviews
The use of Literature review in a research is central to finding the right information and guidance about the previous researches that has been done before.
Literature reviews present the necessary tools for taking into account what has been done by previous researchers in a way that facilitate the creation of objectivity in research and hence objective knowledge (Schacter, 2008).
According to Denholm (2009), literature review enable the researcher to understand where the academic gap exists and hence can enrich the research by trying to find this gap. It is therefore important that a wide range of information is evaluated with a view to understanding different vies that have been put forward by previous researchers and hence use the strengths and weaknesses thereof to develop the said research.
Benchmarking and other methods.
According to Behn (2003), performance measurements are important in enabling the organisation to achieve any or all of the following;
To evaluate how it is performing
To have control measures in place that would benefit the organisation
To create the right budget for increasing productivity
To create the right measures of motivation for the sake of benefiting the company.
To accomplish achievements over the years or to celebrate the meeting of a target.
To learn from the past and also to seek ways of improving performance in the future.
These are very important reasons for adopting the measurements; however, the main test now comes when the organisation is seeking to find the right kind of measurement to use (Kouzmin et al, 1991). Kouzmin et al (1991), also added that a method that allows the company to specifically identify areas of improvement is a method that should be considered when future plans are being made.
According to Neely (2002), these measurements must reflect what an organisation wishes to accomplish and so the choice is not to be done just in an arbitrary way. However, Neely does not state how to choose the measures to use. According to Norton (1993) and Kaplan (2001), the measure chose should reflect the future and not the presented and it should show some degree of independent, what Norton and Kaplan mean is that it must be a measure that may not necessitate an organisation to be compared with others since this is not interdependence ( Norton, 1996). This implied that Norton and Kaplan were not for benchmarking which falls short of independence and must be evaluated in a comparative way.
In terms of advantages of benchmarking in the continuous improvement, (Meyer, 1996), noted that it can only be viable if the same measure is used over and over again and hence the company must be able to use the method over and over, but, this school of thought has been contested by, (Mendibil, Kepa and Macbryde (2005)), who stated that the adoption of another measure is still a process of continuous improvement and business process re-engineering and the use of benchmarking over and over again may obscure the real position of the company to the management and may hence be a failure.
Norton and Kaplan advocated for balanced scorecards that demonstrates certain levels of achievements using scorecards for each level. But Neely (2002), was of the view that Performance Prism is the best method to use as it enables the company to look at its performance from multiple angles and not just one angle, hence can show a sort of multi results for the company.
The views of Jones & Schilling (2000), were however that Businesses should use TPM(Total Productive Maintenance) process that is about maintenance of the machine throughout its life and making total use of the same to improve production, but this method does not really demonstrate performance since it depends on the machines ability to perform.
According to Zigon (1999), the use of team-based systems like the Total measurement development method are effective having good performance measures. Zigon's view is that a good measure must to the least facilitate the following;
Show a way to know if the company's strategy is working
Focus the attention on what really counts for success
Enable the company to have a common language for communication
Can ensure that data is collected adequately
Enable the company to measure the right things and not what is unwanted.
Can create an explicit measure of the units, the owner of the measure and how the measure works and the outcome thereof.
According to Schacter (2002), benchmarking is the best measure of performance as it evaluates issue of time, quality, cost, and hence present the organisation with a learning tool that has been drawn from the competitors in the industry. But (Rohm, 2000), disagrees and considers benchmarking as falling short of allowing the organisation to critically understand the reason what it is not performing well as it should, however, (Kirby, Julia, (2005)) counters by stasting that benchmarking is not only to be undertaken by those organisation that are not performing well, it can be the best tool for even the best performing companies in the industry and so the views held above do not really support the case against benchmarking.
According to (Sarkis 2001), there are different forms of benchmarking and since its inception by Rank Xerox [1] , through collaborative bench marking, the process has become very popular with mainly the US companies and it has proved to highlight very many issues facing these organisations.
According to Kirby, Julia, (2005) , the first academic materials of Benchmarking by Robert Camp developed processes of benchmarking in a 12 stage process as shown in the figure bellow;
Source:< http://www.strategy2act.com/solutions/bsc_toolkit/bsc_benchmarking_slide_14_big.gif >
Neely (2002), noted that there are three main costs of benchmarking which include;
The costs of visit to the company or even accommodation
The costs of time which will be invested in the process
The cost of storing data during and after the process
Carpinetti and Melo (2002), have identified Benchmarking as a process that although provides the company with the right information for making future plans of the organisation as it also takes into account the environmental issues like competition in the industry. But the disagreement by Neely (2002), Norton (1996) is that this process does not really satisfy the future needs of the company and it does not also take into account the size of the organisation, for instance how a highly capitalised company be benchmarked against a low capitalised company? This may not be feasible. Benchmarking is ignorant of this, also, they held that benchmarking may have to be used alongside other methods to create the right information that can be trusted and used appropriately.
From this analysis, it can be seen that there are various methods of performance measurement which can be used by an organisation and benchmarking comes as just one of them. It is therefore important to create a justification for considering that Benchmarking will provide the company with the right information and results for understanding its current position.
Methodology
The methodology used in a research is important in that it allows the researcher to gain the relevant information needed in such a manner as to analyse and reach the objectives.
Different methods might be used in conducting researchers and in this research the methodology will include;
Data collection
This research will use both the Primary and Secondary methods of data collection with a view to exhaust all possible avenues to data collection and hence manage to secure the most relevant information for analysis.
According to (Milman , Glinow 1998), a good research is one that is developed along the borders of appropriate data collection methodology, which facilitate the usage of the right data to create the right information for analysis.
according to (Turner, 2007), the Primary data collection method is important in a research as it allows the researchers to get information that has not been tampered with and hence allow the users to have the first hand view of information which when well used can then present objective information that is necessary to contribute to knowledge.
Primary data collection may involve the use of methods like Interview, Questionnaires, Observation and even Case studies on the subject matter.
However, Primary data collection may be too costly and time consuming and can be prejudiced by the whims of the researcher and hence made to fit a certain need.
Secondary data collection on the other hand does not employ first hand information to collecting data and creating information, it actually uses information that has been prepared by others to create inference to the subject matter and develop interpretative relevance to the issues of study.
The secondarily data collection methodology is less time consuming compared to the Primary data collection methodology and in most cases there may be a generous availability of materials which can hence improve the quality of research when taken from different sources.
Secondary data collection methodology is also less time consuming and may be cheaper which makes it to be effective where time and costs are a constraint as in this research.
However Secondary data collection may have serious shortcomings which might even invalidate the study. For example, where the information has been taken from the wrong sources or biased sources then it may result in biased study.
In this study there will be an extensive use of Secondary data collection methods which are in good supply through books, academic materials and also the internet. The researcher expects to gather more information using Primary data collection method through case studies which will then be evaluated.
The choice for case studies is informed by the availability of the same from different company records. These will be selected carefully from cases that demonstrate the issues of benchmarking and other methods with a view of justifying or disapproving the case for benchmarking.
Analysis
This is an important aspect of the research where the research will evaluate the data and create relevant information and present findings thereof.
The analysis will be done through the use of both Qualitative and Quantitative approaches. The former involves the use of description to present the relevant information and such areas of judgement may involve issues like the necessity and goodness of the chosen method.
This will mainly be used to support the analysis that shall be done using Quantitative approach where the researcher will present various issues that the company may have gathered as a result of benchmarking approach. Therefore the information to be evaluated quantitatively will be the sort of information that Benchmarking may present including;
Trend of sales and production over the years.
Trends before and after incorporating bench marking.
The performance metrics outcomes in terms of productivity numbers of the machines or even the workers.
Presentation
The research will use descriptive analysis as well as charts and graphs to demonstrate the issues that have been found out with a view to show in pictorial form how such an activity might take place.
The report will be presented in different chapters, each dealing with specific objective and there will also be a chapter on discussion where the researcher will present his analysis basing on the information that has been gathered. At this section, the writer will highlight considered and personal opinion on the basis of objective findings with an aim to cement the point of view that will either be for or against the title presented or that will answer the main theme question of this research.
Theoretical Framework to be used
In the course of this research the general framework will be centred on the need for quality assurance and so theoretical information on Total Quality Management will be evaluated.
Also, there will be an evaluation of the issues surrounding business process engineering in the company and how these might be beneficial.
In the course of developing these frameworks, the research will extensively discuss performance measurement methods used in different organisation and how these are relevant in making the company to achieve higher performance as it continues its operation as a going concern.
The measure of evaluation
The decisions criteria in assessing the importance of benchmarking will basically come from the information that will be gathered using the case studies and in-depth flaws that will be identified in the use of benchmarking.
The research will hence also, create the desirable profiles of the companies that can use benchmarking in their analysis and those which do not fall under such a category may hence find benchmarking to be of less importance and so the decision criteria will be based on the suitability of the process and its applicability to a wide range of organisations across different industries.
Limitations of the study
In this research the researcher will base all the analysis on the scope of the process whereby the primary evaluation will be centred on the need for benchmarking in different industries and its comparative importance when considered alongside other methods.
This study will hence not evaluate issues of company specific problems but rather consider general benefits of benchmarking using proven examples.
The study will also not specifically concentrate on future challenges facing organisation but these will be mentioned to evaluate future effectiveness of benchmarking as a methods and in a way that would show if there is a need to perform some modifications to the way the process is evaluated to account for the future needs of the company.
The time Frame
This research will be conducted over a period of 4 months and the extensive plan of research will be presented in a Gantt chart showing how activities will be interconnected over the period of time.
The plan of action will hence be tentative and basing on the information and dynamics as they come, these may change.
Conclusion
This research will specifically aim at providing the issues related to benchmarking. The level of success at completing the project will be measured by if the research has managed to prove or disapprove benchmarking as the key element of continuous improvement and performance measurement.
From the information presented above, there are mixed views about benchmarking being the key element of improvement and as such, it is not an outright verdict but one that needs evaluation.
The research will hence seek to meet the objectives and at the same time maintain a limited scope as mentioned above in order to create an academically viable set of knowledge. The research will provide recommendations for future studies if the scope is to be expanded.
