Through this method, Young (2003) explains that business personalities are able to know how well their competitors perform within the industry, and the reason as to why these companies are able to perform in a manner identified. Wöber (2002) further explains that benchmarking is always used to measure the performance of a business organization/industry by using specific indicators, e.g. cost per unit of the substance, productivity per unit, etc.
Benchmarking is a process that is used in strategic management, whereby business organizations are able to evaluate different aspects of their business organization, in relation to the best practices of the industry. Orr and Orr (2014) maintains that this helps managers of business organizations to come up with the best policy that can help them improve the performance of the business organization. Furthermore, benchmarking as a process normally helps managers of a business organization to adapt some of the best practices of an industry into their operations. This can be social responsibilities, or marketing procedures. Benchmarking is always a continuous process, and this is mainly because organizations seek methods of improving their performances, and best practices. However, there is a considerable debate on whether benchmarking helps in improving the profitability of a business organization. Orr and Orr (2014) explains that because benchmarking is a method of understanding the best practices of an industry, and implementing those practices, it will most definitely lead to an increase in the profitability of a business organization.
This is an assertion that Kerimodou (2013) is against. In their research concerning benchmarking, the authors denoted that organizations which have high technical efficiency are not always the best performers regarding profitability. In their research,