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Bench Marketing and the Balanced Scorecard Essay

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Updated: May 20th, 2020


Benchmarking is a managerial tool which enables business organizations to compare their current productivity with those of the others. Through benchmarking, the businesses can adopt improvement initiatives in line with the other prosperous organizations (Damelio, 1995). Benchmarking uses qualitative and quantitative techniques. Quantitative techniques provide numerical outcomes, while qualitative techniques generate the best practices (Bogan & Michael, 1994). Benchmarking seeks to identify, understand and embrace organizational practices and procedures that have successfully worked for other companies.

Benchmarking is popular with business organizations because of its simplicity. Through benchmarking, a business aims at identifying standards to adopt in order to measure and improve its productivity. Benchmarking is a simple four-step procedure. According to Damelio (1995), the first step in benchmarking is to define the business operations to be benchmarked. Secondly, the business defines the level of improvement desired and the targeted results. These are then communicated to the involved stakeholders. Thirdly, the business measures the actual results. Finally, the actual performance is compared with the budgeted performance, and corrective actions are taken in case of variations (Bogan & Michael, 1994).

How benchmarking ties into the balanced scorecard measurements

Benchmarking is related to the balanced scorecard in the sense that both are involved as performance improvement efforts. The balanced score card (BSC) is a tool used in implementing organizational strategies (Hannabarger, et al, 2010). BSC analyses a business in four perspectives – customer, financial, internal processes, and learning (Kaplan & Norton, 2001). Customer perspective measures the ability of the business to satisfy its customers, while financial perspective is concerned with financial results. Internal processes show the internal operations and how they are measured. The learning and growth perspective focuses on organizational training and how the business harnesses knowledge to enhance its competitive ability (Kaplan & Norton, 2001).

Benchmarking is tied to the balanced scorecard measures. The measures of each perspective are usually benchmarked with information from outside the business. In line with the general organizational strategy, managers come up with the goals in relation to each of the above perspectives. The business then adopts specific measures in support of the set objectives (Kaplan & Norton, 2001). The measures are then translated into initiatives well understood by the employees. The rationale behind the BCS is that the business must have a balanced range of productivity measures in order to effectively run the organization.

The BSC focuses on such areas as time, performance, quality and price. These are sensitive areas to the customer (Kaplan & Norton, 2001). Organization is to design goals for these customer sensitive areas, and each area should have a specific measure. The business can determine some measures like sales, internal income. However, other measures, such as timely deliveries, are dependent on external customers. Thus, to align with and adapt such measures to the BSC, the business must rely on information gained from outside the company through benchmarking (Kaplan & Norton, 2006). To benchmark with the BSC, data must be collected from outside the business. This forces the business to examine itself from the customers’ viewpoint. This is a clear illustration that benchmarking is tied to the BSC measurements.

Concepts essential in successful business administration

Today’s business environment is very dynamic and highly competitive. To succeed in business administration, the manager requires certain essential concepts. The first concept is a well-prepared business plan (Gareth & George, 2011), which should be a foundation upon which success is built as the future of the company is clearly detailed. Second, the business should have a comprehensive marketing strategy. The business must have a clear idea of its potential and target markets since this will directly affect its sales revenues and consequently its profitability (Kotler & Keller, 2006). The business should also differentiate itself either through low pricing or through superior value in order to beat its competitors. Finally, the company should be willing to embrace and manage change.


This paper has established that benchmarking is a popular managerial tool in contemporary business management. Managers use benchmarking to compare how their companies perform, relative to the best organizations in the industry (Damelio, 1995). Businesses use benchmarking hand in hand with the balanced scorecard since the two approaches are very powerful tools in improving organizational performance. Benchmarking is connected with the BSC measurements since the business must rely on information from outside to measure some of the customer sensitive areas (Kaplan & Norton, 2006). In order to succeed, today’s manager should have in place a detailed business plan and a comprehensive marketing strategy. The company should equally differentiate itself apart from its competitors and be willing to manage change (Gareth & George, 2011). These are the most essential concepts in successful business administration.


Bogan, C. E., & Michael, J. E. (1994). Benchmarking for best practices: Winning through innovative adaptation. USA: McGraw-Hill.

Damelio, R. (1995). The basics of benchmarking. Portland, Oregon: Productivity Inc.

Gareth, R. J., & George, J. M. (2011). Contemporary Management. 7th Ed. USA: McGraw-Hill Education.

Hannabarger, C., Buchman, R. & Economy, P. (2010). Balanced scorecard strategy. New York: Wiley Publishing, Inc.

Kaplan, R. S., & Norton, D. P. (2006). Alignment: Using the balanced scorecard to create corporate synergies. Boston, MA: Harvard Business School Press.

Kaplan, R. S., & Norton, D. P. (2001). The Strategy-focused organization: How balanced scorecard companies thrive in the new business environment. Boston, MA: Harvard Business School Press.

Kotler, P., & Keller, K. L. (2006). International Marketing Management. 12th Ed. New Jersey: Prentice Hall.

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