Benchmarking Concept

Benchmarking Concept
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Benchmarking Concept
Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and coming up with information for the success of an organization's goals. It is also referred to as cost accounting. The main aim of managerial accounting is to help managers within the organization in decision making (Bain and Company, 2015). To streamline operations and generally improve the profitability of an organization, some concepts are employed. Benchmarking is one of the concepts used in managerial accounting (Khan, Halabi, & Sartorius, 2011). Basically, benchmarking entails managers comparing the performance of their products externally with those of competitors and best-in-class companies.
To start with, benchmarking concept is such a crucial concept in managerial accounting. Getting information from the organizations’ toughest competitors is the basic aim of benchmarking (Martin, 2009). It improves performance by identifying and applying best demonstrated practices to operations and sales. To find examples of superior performance and to understand the processes and practices driving that performance is the main objective of benchmarking. This objective is highly relevant to managerial accounting (Bavarsad, DarzianAzizi, & Bafti, 2012). It gives the managers some idea on how to run some activities to obtain specific outcomes. This first gives the organizations’ managers an idea of the future given that they apply the learned processes correctly. This means that organizations improve their performance by incorporating these best learned practices into their own operations. The success is achieved by innovating but not by imitating (Jeffries, 2006).  The concept of benchmarking can be well illustrated through a real life example. This is because many companies and organizations have employed the concept and witnessed great change. Xerox, one of the world’s leading copier companies took some benchmarking initiatives early 1980s (Jeffries, 2006). Chester Carlson, the then patent attorney and part-time inventor struggled for five years to sell xerographic invention. Many companies thought there was no market for xerographic image (Jeffries, 2006). “In 1944, the Battelle Memorial Institute in Columbus, Ohio, contracted with Carlson to refine his new process and Carlson called it ‘electrophotography’ (Jeffries, 2006).” Three years later, The Haloid Company, maker of photographic ...