Benchmarking and the role of organizational learning in developing competitive advantage

Benchmarking is concerned with enhancing organizational performance by establishing standards against which processes, products and performance can be compared and consequently improved. Organizational learning, on the other hand, refers to the processes by which organizations develop new knowledge and core competences in order to gain competitive advantage. By reference to a survey of over 700 companies drawn from the manufacturing and service sectors in northeast England, this paper examines the relationship between benchmarking and the characteristics of organizational learning. By examining several variables associated with organizational learning, evidence is presented that supports the argument that benchmarking brings the greatest benefits to an organization’s performance when combined with effective organizational learning. Vision, training and education, a problem-solving culture and human resources strategy are some of the key elements associated with benchmarking and organizational success. A high degree of commonality exists between the results of the manufacturing and service sectors, although differences do emerge in the context of employee morale and motivation for example. Furthermore, all the organizational factors examined in both sectors proved to be statistically significant when comparing world class and potentially winning companies with their competitors, adding weight to the argument that the existence of organizational learning within a company is an essential ingredient in the quest for superior performance. Copyright # 2001 John Wiley & Sons, Ltd.

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