In today's global market, knowledge about top competitors' businesses is crucial for improving and sustaining organizational competitive advantage. Benchmarking is a valuable tool that provides opportunity to learn from other organizations. It is an effective means for learning and change because it exposes employees to new approaches, systems, and procedures (Welch, 1993; Kuebler, 1993; Zairi, 1994). Benchmarking may be defined as a process in which an organization tries to learn from the best-in-class organizations, determine how the best-in-class achieve superior performance levels, and utilize those practices as benchmarks to their own organization (Watson, 1992 and 1993; Whiting, 1991). Benchmarking is a flexible tool that can be used for gradual continuous improvement, as well as for major changes of process reengineering. Deming (1982) and a number of other quality advocates have strongly recommended the use of benchmarking as an essential component of continuous improvement (Graham, 1993; Ishikawa, 1985; Venetucci, 1992; Dawkins, Feeny, and Harris, 2007). For the past three decades, world-class organizations have utilized benchmarking to improve aspects of their competitive advantages such as cost, quality, delivery, and customer service. The use of benchmarking as an effective quality improvement tool was started by Xerox in the early 1980s in order to overcome severe international competition. Since 1987, benchmarking has been a major component of the Malcolm Baldrige National Quality Award criteria. Out of a total of 1000 Baldrige points, benchmarking has consistently influenced more than 500 points (Bogan and English, 1994). No other quality fundamentals, such as process management, employee involvement, and quality planning, have had such a broad influence on the Baldrige criteria as benchmarking. Positive attitude toward learning and the use of benchmarking have been common characteristics of Baldrige winners and finalists (Ford and Evans, 2001). The practice of benchmarking is also being widely used for six sigma process and for organizations seeking ISO 9000 certification.
Since the early 1980s, a large number of articles have been written on the development and application of benchmarking in diverse areas of businesses such as manufacturing, health care, marketing, supply chain, human resources, and accounting. Harrison (1999) presents an analysis of the evolution of different aspects of benchmarking activities. A comparison of the Xerox and Kodak benchmarking processes has been reported by Bogan and English (1994). Although the two benchmarking methods utilize a different number of steps, their overall benchmarking activities are quite similar. Zairi and Whymark (2000) report successful results of the application of benchmarking at British Royal mail. Applications of benchmarking to world-class purchasing and to the U.S. service sectors have been reported respectively by Newman, Hanna, and Duffett (1995) and Roth et al. (1997). Singh, Narain, and Yadav (2006) utilized benchmarking and performance measurement to investigate supply chain management practices at a number of Indian manufacturing organizations. They found that Indian organizations were using benchmarking mainly as a continuous improvement tool. Bartley, Gomibuchi, and Mann (2007) utilized benchmarking to provide insights into how organizations can develop more customer-focused culture. Practical application of lead benchmarking and performance measurement to achieve organizational change has been investigated by Moffett, Anderson-Gillespie, and McAdam (2008). Goncharuk (2008) investigated the capability of using performance benchmarking tools for estimation of efficiency in gas distribution companies. The use of benchmarking as an effective organizational learning tool has been presented by Senge (1990), Garvin (1993), Ford and Evans (2001), Smith (1997), Hambly (1997), Watson (2001), Chen and Paetsch (1995), O'Dell and Grayson (2000), and Evans and Dean (2003). …