ExpertMedium2 marksMultiple Choice
ACCA · Question 34 · Performance Measurement
A city's public transport authority compares its vehicle maintenance processes against those of a leading commercial airline to identify best practices. What type of benchmarking is this?
A city's public transport authority compares its vehicle maintenance processes against those of a leading commercial airline to identify best practices. 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 entities. They are in different industries but share a similar function (vehicle maintenance).
Full Answer
C.Functional benchmarking✓ Correct
Functional benchmarking involves comparing a specific business function or process (e.g., maintenance, HR, IT) against an organization that is recognized as a leader in that function, even if they operate in a completely different industry.
Common mistakes
Confusing functional benchmarking with competitive benchmarking.
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