Benchmarking is a process for improving some activity within an organization. We will illustrate benchmarking with the following example.

Company Q has identified one of its activities that needs improvement. The company conducts a search to find another organization that is considered to have mastered the activity. Perhaps it is Corporation J that is recognized as having the best practice for this activity. Corporation J's performance is viewed as the benchmark or standard or best practice.

Company Q will study Corporation J's performance and procedures in depth and will identify the differences between the organizations. Company Q will likely modify its procedures in order to bring its performance of the activity up to the level attained by Corporation J.

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