ExpertMedium2 marksMultiple Choice
ACCA · Question 34 · Syllabus F: Performance measurement
A global logistics network compares the efficiency of its HR department's payroll processing against the payroll processing efficiency of a leading multinational bank.
What type of benchmarking is this?
A global logistics network compares the efficiency of its HR department's payroll processing against the payroll processing efficiency of a leading multinational bank.
What type of benchmarking is this?
Answer options:
A.
Internal benchmarking
B.
Competitive benchmarking
C.
Functional benchmarking
D.
Strategic benchmarking
How to approach this question
Identify the relationship between the two companies. They are in different industries (Logistics vs Banking) but are comparing a specific shared function (Payroll). This is functional benchmarking.
Full Answer
C.Functional benchmarking✓ Correct
Functional benchmarking involves comparing a specific business function or process (e.g., payroll, customer service, IT support) against organizations that are recognized as the best at that function, even if they are in completely different industries. Because a logistics firm is comparing itself to a bank, it is functional, not competitive.
Common mistakes
Confusing functional benchmarking with competitive benchmarking.
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