MBA Ist Semester International Perspective Short Questions Answers Study material notes Unit-wise division of the content 3 mock papers for self-assessment. Sample papers.
SHORT ANSWER QUESTIONS
Q.1. What is benchmarking?
Ans. Benchmarking is the process of identifying best practice in relation to both the product and the processes by which those products are created and delivered. It is a method of improvement and a way to make structured changes. The search for best practice can exist inside a particular industry and also in other industries.
The objective of benchmarking is to understand and evaluate the current position of a business or organization in relation to best practice and to identify areas and means of performance improvement.
Q.2. Explain benchmarking process.
Ans. Benchmarking involves looking outward Courtside a particular business, Organa region or country) to examine how others achieve their performance levels and to understand they use.
In this way, benchmarking helps to explain the processes behind the excellent performance. When lessons learned from a benchmarking exercise are applied appropriately, they lacunae proved performance in critical functions within an organization or in key areas of the business.
The process of benchmarking involves four key steps:
1. Understand in detail existing business processes.
2. Analyse the business processes of others.
3. Compare own business performance with that of others analyzed.
4. Implement the steps necessary to close the performance gap.
Benchmarking should not be considered a one-off exercise. To be effective, it must become an integral part of an ongoing improvement process, the goal being to abreast of ever-improving best practice.
Q.3. What are the different types of costs included in benchmarking?
Ans. The three main types of costs included in benchmarking are:
1. Visit Costs: This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.
2. Time Costs: Members of the benchmarking team will be investing time in researching problems, finding exceptional companies to study, visits, and implementation. This will take them away from their regular tasks for part of each day so additional staff might be required.
3. Benchmarking Database Costs: Organisations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice now.
The cost of benchmarking can substantially be reduced by utilizing the many internet resources that have sprung up over the last few years. These aim to capture benchmarks and best practices from organizations, business sectors, and countries to make the benchmarking process much quicker and cheaper.
Q.4. Write a note on technical/product benchmarking.
Ans. The technique initially used to compare existing corporate strategies with a view to achieving the best possible performance in new situations, has recently been extended to the comparison of technical products. This process is usually referred to as ‘Technical benchmarking’ or ‘Product benchmarking. Its use is well-developed within the automotive industry (‘Automotive benchmarking’), where it is vital to design products that match precise user expectations, at minimal cost, by applying the best technologies available worldwide. Data is obtained by fully disassembling existing cars and their systems. Such analyses were initially carried out in-house by carmakers and their suppliers. However, as these analyses are expensive, they are increasingly being outsourced to companies who
specialize in this area. Outsourcing has enabled a drastic decrease in costs for each company (by cost-sharing) and the development of efficient tools (standards, software).
Q.5. Briefly explain metric benchmarking.
Ans. Another approach to making comparisons involves using more common forms of quantitative analysis used in metric benchmarking are data envelope analysis (DEA) and regression analysis. DEA infrastructure regulation, DEA can be used to reward companies/operators whose costs are near the efficient frontier with additional profits. Regression analysis estimates what the average firm should be able to achieve. With regression analysis, firms that performed better than average can be rewarded while firms that performed worse than average can be penalized. Such benchmarking studies are used to create yardstick comparisons, allowing outsiders to evaluate the performance of operators in and industry. Advanced statistical techniques, including stochastic frontier analysis, have been used to identify high and weak performers in industries, including applications to schools, hospitals, water utilities, and electric utilities.
One of the biggest challenges for metric benchmarking is the variety of metric definitions used among companies or divisions. Definitions may change over time within the same organization due to changes in leadership and priorities. The most useful comparisons can be made when metrics definitions are common between compared units and do not change so improvements can be verified.
Q.6. Explain the use of benchmarking measurements.
Ans. Benchmarking measurements are used as the basis of many comparisons:
1. To determine the gap between current performance and that of partner organizations.
2. To track progress from the present (with the current process) into the future.
3. To track partners’ progress towards their goals.
4. To determine superior performance with process improvements.
5. To use a measurement systems analysis (MSA).
1. These comparisons will be valid only if everyone participating in the study measures performance in exactly the same way-every time.
2. Itis important to make sure metrics are being established that potential benchmarking partners
are probably already tracking or that can be easily derived from existing measurements.