MCQ UNIT 3

1. What is not benchmarking?

a) Systematic search for best practices
b) Systematic search for innovative ideas
c) Systematic search for highly effective operating procedures
d) Systematic search for imitating competitors

Answer: d
Explanation: Benchmarking is the process of systematically searching for
best practices, innovative ideas, and highly effective operating procedures.
All these need to be done to survive and grow in this competitive industry.
2. Defining a proper metric for performance comparison is important in
benchmarking.
a) True
b) False

Answer: a
Explanation: Defining a proper metric for performance comparison is
important in benchmarking. The target value must be what the best-in-class
achieves. Then, organization compares its performance with the target value.
3. Benchmarking requires managers who understand the reasons for
performance variation.
a) True
b) False

Answer: a
Explanation: Benchmarking requires managers who understand the reasons
for performance variation. Proper understanding will help the organization
come closer to the target value achieved by the best-in-class.
4. Benchmarking is used by organizations as a ________ tool.
a) Intermittent improvement
b) Discontinuous improvement
c) Continuous improvement
d) Sporadic improvement

Answer: c
Explanation: Benchmarking is used by organizations as a continuous
improvement tool. It is the process of systematically searching for best
practices, innovative ideas, and highly effective operating procedures.
5. Company A manufactures 10 defective products on an average out of 1000
products manufactured. Company B manufactures 5 defective products on an
average out of 1000 products manufactured. Which company must be chosen
for benchmarking and by whom?
a) B should choose A as benchmark
b) A should choose B as benchmark
c) Both are equally efficient
d) Concept of benchmarking is not applicable here
Answer: b
Explanation: A should choose B as benchmark as A is manufacturing more
defective products compared to B. A must reduce its average number of
defects from 10 out of 1000 manufactured products.
6. Benchmarking involves ________ between the performance level of the
organization with its benchmark.
a) Increasing the gap
b) Reducing the gap
c) Opening the gap
d) Broadening the gap

Answer: b
Explanation: Benchmarking involves reducing the gap between the
performance level of the organization with its benchmark. It is used as a
continuous improvement tool.
7. Benchmarking is used extensively in __________
a) Manufacturing organizations only
b) Service organizations only
c) Manufacturing and service organizations
d) Government institutions only

Answer: c
Explanation: Benchmarking is used extensively in manufacturing and service
organizations. It is the process of systematically searching for best practices,
innovative ideas, and highly effective operating procedures.
8. Proper selection of the best-in-class for benchmarking is _______
a) Crucial
b) Doesn’t hold great importance
c) Least important
d) Not important

Answer: a
Explanation: In the contemporary world, many companies sell the same
product. It is important to properly select the best-in-class for benchmarking.
It should be a realistic and achievable target.

1. In which form of benchmarking is comparison of a business process done

with a similar process within the organization?
a) Internal benchmarking
b) Competitive benchmarking
c) Functional benchmarking
d) Generic benchmarking

Answer: a
Explanation: In Internal benchmarking, comparison of a business process is
done with a similar process within the organization. Comparable sites,
branches, sections, departments within the business can be chosen for
benchmarking.
2. Which of the following is not an advantage of internal benchmarking?
a) Low cost
b) High cost
c) Relatively easy
d) Deeper understanding of all the processes of the organization

Answer: b
Explanation: Internal benchmarking is comparison of a business process that
is done with a similar process within the organization. It is low cost, relatively
easy and it leads to in-depth understanding of all the processes of the
organization.
3. Which of the following is not a challenge to internal benchmarking?
a) Low performance improvement
b) Internal bias
c) It may not provide best-in-class comparison
d) High performance improvement

Answer: d
Explanation: Internal benchmarking may lead to low performance
improvement and it might not provide best-in-class comparison. Internal bias
may also be an additional challenge. Hence, we must wisely use internal
benchmarking as a comparison tool.
4. In which form of benchmarking is direct comparison with competitor done
of a product, service, process or method?
a) Internal benchmarking
b) Competitive benchmarking
c) Functional benchmarking
d) Generic benchmarking

Answer: b
Explanation: In competitive benchmarking, direct comparison with
competitors is done of a product, service, process or method. This form of
benchmarking is efficient in knowing where your organization stands
compared to your competitors.
5. Competitor benchmarking can also open the possibility for partnership.
a) True
b) False

Answer: a
Explanation: In competitive benchmarking, direct comparison with
competitors is done of a product, service, process or method. Therefore, if
mutual consensus is there to grow together between two competitors, a
partnership can also happen.
6. Trade secrets may be a challenge in competitor benchmarking.
a) True
b) False

Answer: a
Explanation: Trade secrets may be a challenge in competitor benchmarking.
This can lead to improper comparison and may yield to improper results.
Competitors can also capitalize on your weakness which may also pose a
threat to your organization.
7. In which form of benchmarking is comparison of similar or identical
practices within same or immediate industry is done?
a) Internal benchmarking
b) Competitive benchmarking
c) Functional benchmarking
d) Generic benchmarking

Answer: c
Explanation: In functional benchmarking, comparison of similar or identical
practices within same or immediate industry is done. This provides
information about industry trends. The improvement rate of the organization
becomes better too.
8. Which of the following is not a challenge to functional benchmarking?
a) Variation in corporate culture
b) Takes more time than internal benchmarking
c) Common functions are difficult to find
d) Takes less time compared to internal benchmarking

Answer: d
Explanation: In functional benchmarking, comparison of similar or identical
practices within same or immediate industry is done. Variation in corporate
culture is a major challenge to functional benchmarking. It takes more time
compared to internal benchmarking as common functions are difficult to find.
9. In which form of benchmarking unrelated business processes or functions
that can be utilized are studied?
a) Internal benchmarking
b) Competitive benchmarking
c) Functional benchmarking
d) Generic benchmarking

Answer: d
Explanation: In generic benchmarking, unrelated business processes or
functions that can be utilized are studied. Bar coding concept used at an
airport adopted from a grocery store is an example of generic benchmarking.
10. Which of the following is not a benefit of generic benchmarking?
a) Non-competitive
b) Lack of innovation
c) Non-threatening
d) High potential towards discovery

Answer: b
Explanation: Generic benchmarking leads to innovation. It is non-competitive.
It is non-threatening. It also has a high potential towards discovery.

1. Which of the following is not an advantage of process benchmarking?

a) To make the process effective
b) To make the process efficient
c) To make the process faster
d) To make the process ineffective

Answer: d
Explanation: The advantage of process benchmarking is to make the process
effective, efficient, and faster. It leads to process optimization. Process
improvement is a major step organization’s take towards continuous
improvement.
2. Process benchmarking can be used in customer complaint processes.
a) True
b) False

3. Strategic benchmarking shows long term benefits.

a) True
b) False

Answer: a
Explanation: Strategic benchmarking shows long term benefits. It examines
how companies compete and is rarely industry-focused.
4. Which of the following is not a type of comparison made through strategic
benchmarking?
a) Business approaches comparison
b) Business strategy comparison
c) Number of managers in each company
d) Business model comparison

Answer: c
Explanation: The comparisons made in strategic benchmarking are that of
business approaches, business strategy, and business model. It helps you
identify the best business strategies of best companies.
5. Which of the following is not a technique used during performance
benchmarking?
a) Reverse engineering
b) Analysis of operating statistics
c) Direct product or service comparison
d) To understand business strategy

Answer: d
Explanation: Reverse engineering, direct product or service comparison,and
analysis of operating statistics are the different techniques that are used
during performance benchmarking. The other important types of
benchmarking are process benchmarking and strategic benchmarking.
6. Which of the following is not put under focus during performance
benchmarking?
a) Elements of cost
b) Technical quality
c) Number of employees in organization
d) Product or service features

Answer: c
Explanation: Elements of cost, technical quality, and product or service
features are some of the performance characteristics put under focus during
performance benchmarking. The other important performance characteristics
are speed and reliability.
7. Which of the following is not an example of functional performance
benchmarking?
a) Employee net promoter score
b) Number of managers in organization
c) Staff engagement surveys
d) Brand awareness

Answer: b
Explanation: Employee net promoter score and staff engagement surveys are
examples of functional performance benchmarking that can be used during
HR team performance benchmarking. Similarly, measuring net promoter
score or brand awareness can be used during marketing team performance
benchmarking.
8. Revenue growth and customer satisfaction can be assessed through
_______
a) Performance benchmarking
b) Process benchmarking
c) Strategic benchmarking
d) Poka Yoke

Answer: a
Explanation: Revenue growth and customer satisfaction can be assessed
through performance benchmarking. The other important types of
benchmarking are process benchmarking and strategic benchmarking.

1-Following is the technique(s) applied in Continuous Process Improvement

(CPI).

(A) Juran’s trilogy

(B) Kaizen

(C) Six Sigma

(D) all of the above

2-Benchmarking is

(A) Quality management technology

(B) Production technology

(C) Marketing strategy

(D) None of the above

3-The first organization which initiated benchmarking concept

(A) Motorola

(B) Xerox

(C) Suzuki

(D) Daimler Benz

4-The term benchmarking was first used by

(A) Carpenters

(B) Goldsmiths
(C) Blacksmiths

(D) Cobblers

5-Benchmarking is most used to measure

(A) capacity

(B) performance

(C) length

(D) height

6-Benchmarking is a tool to achieve

(A) business objectives

(B) competitive objectives

(C) both (A) and (B)

(D) None of the above

7-Benchmarking has ___ levels.

(A) two

(B) three

(C) four

(D) five

8-Strategic benchmarking deals with

(A) management

(B) managers

(C) workers

(D) all of the above

9-Strategic Benchmarking includes

(A) Studies of trends and orientations as guide to actions, e.g., technological

trends.

(B) Specific studies of the strategies and approaches of high performing

organizations;

(C) The strategic study of the characteristics of effective continuous

improvement strategies of public and private organizations, of change
processes, of leadership styles, etc.
(D) All of the above

10-Following is the example(s) of operational benchmarking

(A) evaluation of productions methods to determine the highest through put

methods that deliver lowest cost and least defects

(B) study of logistics distribution methods that result in both high delivery
service performance and low levels of finished goods

(C) analysis of invoicing procedures to determine the most productive

process

(D) all of the above

11-Which of the following is not a type of benchmarking?

(A) internal benchmarking

(B) external benchmarking

(C) national benchmarking

(D) international benchmarking

12- ___ benchmarking is the process of evaluating processes or business
functions against the best companies, regardless of their industry.

(A) Competitive

(B) Generic

(C) strategic

(D) Functional

13-Benchmarking can also be used by an organization to determine

(A) whether an organization is able to comply with standards

(B) whether an organization is able to meet customer expectations

(C) areas for future improvement to remain competitive in the market

(D) all of the above

14-Benchmarking is a/an ___ tool.

(A) improvement

(B) cutting

(C) quality
(D) production

15- ___ is an essential step for benchmarking process.

(A) planning

(B) self-assessment

(C) gathering data

(D) all of the above

16-Following is (are) the type(s) of cost in benchmarking

(A) Benchmarking database costs

(B) Time costs

(C) Visit costs

(D) all of the above

17- ___ analysis is an approach to goal setting used by many firms.

(A) Competitive
(B) Cost

(C) Approach

(D) Database

ANSWERS:

1-(D), 2-(A), 3-(B), 4-(D), 5-(B), 6-(C), 7-(A), 8-(A), 9-(D), 10-(D), 11-(C), 12-(B),
13-(D), 14-(A), 15-(B), 16-(D), 17-(A)

What is not benchmarking?

A) Systematic search for best practices

B) Systematic search for innovative ideas

C) Systematic search for highly effective operating procedures

D) Systematic search for imitating competitors

Answer: D) Systematic search for imitating competitors.

___ is an essential step for benchmarking process.

A) planning

B) self-assessment

C) gathering data

D) all of the above

Answer: B) self-assessment

Functional benchmarking involves:

a) benchmarking your competitors.

b) benchmarking global competitors in your industry.

c) benchmarking organizations with regards to specific business activities or processes.

d) benchmarking other multinational firms with similar corporate strategies or similar customers.
Answer: c) benchmarking organizations with regards to specific business activities or processes.

Which of the following is not related to benchmarking?

A) learning from success

B) national leadership

C) stealing ideas

D) beating industry standards

E) best-in-world

Answer: C) Stealing Ideas

Which of the following is not a type of benchmarking?

(A) internal benchmarking

(B) external benchmarking

(C) national benchmarking

(D) international benchmarking

Answer: (C) national benchmarking

___ benchmarking is the process of evaluating processes or business functions against the best
companies, regardless of their industry.

(A) Competitive

(B) Generic

(C) strategic

(D) Functional

Answer: (B) Generic

Benchmarking can also be used by an organization to determine

(A) whether an organization is able to comply with standards

(B) whether an organization is able to meet customer expectations

(C) areas for future improvement to remain competitive in the market

(D) all of the above

Answer:(D) all of the above

Benchmarking is a/an ___ tool.

(A) improvement

(B) cutting

(C) quality

(D) production

Answer: (A) improvement

Which of the following is regarded as a fundamental flaw in the whole concept ofbenchmarking?

A. It limits improvements to currently accepted methods of operating.

B. It does not involve learning.

C. It limits critical thinking.

D. It is not a continuous process.

Answer» A. It limits improvements to currently accepted methods of operating.

Benchmarking against external organisations that do not compete directly in the same markets is
called:

A. Non-competitive benchmarking

B. Collaborative benchmarking

C. Practice benchmarking

D. Non-assault benchmarking

Answer» A. Non-competitive benchmarking

The origins of benchmarking as it is used today go back to which company?

A. Microsoft

B. Toyota

C. Xerox

D. McDonald’s

Answer» C. Xerox
‘Benchmarking’ of jobs is included in

A. internal equity

B. external equity

C. procedural equity

D. salary survey

Answer» D. salary survey

Which of the following statements is not true about benchmarking strategy of TQM?

A. It is a people driven activity.

B. It is related to the efforts of Kaizen.

C. It is related to the raising of criteria for selection.

D. It is raising the performance standards of the organization.

Answer» C. It is related to the raising of criteria for selection.

What is benchmarking?

A. A PA system

B. A measure of productivity

C. A standard against which performance is measured

D. A process where a firm sets a target for itself

Answer» D. A process where a firm sets a target for itself

Which of the following statements best characterizes the quality management practice called
benchmarking?

A. The ISO term for progress measurement

B. Comparing planned project practices to those of other projects

C. A technique used to test certain types of electronic equipment

D. The difference between grade and quality

Answer» B. Comparing planned project practices to those of other projects