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Benchmarking Ethical and Unethical Methods
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Benchmarking: Ethical and Unethical Methods
Measurement is one of the most important elements of a Quality
Management System. Without measurement, we are not able to know where we stand, or if we are improving. Measurement is taken for granted in the physical science, and is gaining wider acceptance in the social sciences. It is, of course, easier to measure tangible attributes like length, mass, and time, and the standards against which they are compared are equally tangible and clearly defined (for example, a Platinum-Iridium bar of a given dimension, the vibration of a Cesium atom, and others). When it comes to measuring intangible attributes like quality, the standards are more difficult to define. The assessment that someone else’s way of doing things is better than yours, or is “best in class” is subjective. This kind of judgment also requires humility to admit that somebody is better than you.
What is benchmarking?
Benchmarking is a well-chosen form to describe measurement. To benchmark is to compare against a standard, that is, to measure. Benchmarking is a highly respected practice in the business world. It is a tool to help you improve your business processes. Any business process can be benchmarked. It is not limited to comparing your processes and practices against the processes of others who are reputed to be doing the same in a better way.
Sometimes, it is very tempting for a company to behave unethically
when benchmarking. For example, a company will agree to benchmark with a competitor, and then try to uncover proprietary information, while on the site visit, or by use of a questionnaire. Clearly, this kind of behavior will lead to problems between the companies, and virtually ruin any chance of conducting a successful benchmarking exercise at a later date.
How do we benchmark?
The different ways of benchmarking are determined by the degree of cooperation by the “admired” company and the ethical behavior of the “comparing” company. I have developed a two-by-two matrix to help us understand the different ways of benchmarking. The matrix takes into account the degree of cooperation (high or low) of the “admired” company and the ethical behavior (high or low) of the “comparing” company.
Matrix situations
In its purest sense, benchmarking is characterized by the willingness
of the “admired” company to be benchmarked and the offer by the “comparing” company of something in return. Ethically, this results in a “win-win” outcome. When I benchmarked Shell’s quality practices with Motorola in the mid-1990’s, the latter in turn wanted to learn about Shell’s salary administration policies and practices, an area Motorola wanted to improve on.
A “comparing” company that only seeks to learn from others without offering something in return is selfish, and to a certain extent unethical. Such behavior results in a “win-lose” outcome, and will probably lead to a loss of benchmarking partners in the future.
An unwilling “admired” compant could be protecting a competitive advantage, and will go the extent of protecting this advantage through secrecy, patents, or copyrights. This is acceptable business behavior. Benchmarking can still take place, if conducted by a reputable third party professional who can guarantee confidentiality. Common examples of this method of benchmarking are salary surveys, job levels, production efficiency indices, etc.
An unethical “comparing company who faces an unwilling “admired” company will go to the extent of industrial espionage. When patents and copyrights exist, unethical “comparing” companies resort to stealing and copying, and these are clearly criminal behavior.
Mutual gains
When you decide to do benchmarking, be prepared to share information important to the companies you are comparing against. This gesture of goodwill encourages invited companies to participate in your benchmarking exercise. After all, benchmarking requires a true partnership to ensure mutual benefits.
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Posted by: Dex_Cynz
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