One way to judge the performance of a company is to compare it with

Question

One way to judge the performance of a company is to compare it with other companies. This technique, commonly called "benchmarking", permits the manager of a company to discover better industrial practices and can provide a justification for the adoption of good practices.

Any of the following, if true, is a valid reason for benchmarking the performance of a company against companies with which it is not in competition rather than against competitors EXCEPT:

(A) Comparisons with competitors are most likely to focus on practices that the manager making the comparisons already employs

(B) Getting "inside" information about the unique practices of competitors is particularly difficult

(C) Since companies that compete with each other are likely to have comparable levels of efficiency, only benchmarking against non competitors is likely to reveal practices that would aid in beating competitors

(D) Managers are generally more receptive to new ideas that they find outside their own industry

(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products or markets

GMATNinja · Accepted Answer

We need to find and eliminate the four answer choices that are VALID reasons "for benchmarking the performance of a company against companies with which it is not in competition rather that against competitors." Before diving into the answer choices, let's make sure we are clear about the given information:

"Benchmarking" is a way to judge the performance of a company by comparing it with other companies. 
 Notice the word "One" in the first sentence; benchmarking is just ONE way to judge the performance of a company. Benchmarking is not the ONLY way to judge the performance of a company. 
 Benchmarking permits the manager of a company to discover better industrial practices. 
 Benchmarking can provide a justification for the adoption of good practices.

From the question stem, we can infer that there are valid reasons for benchmarking the performance of a company against its competitors, but what might be a valid reason for benchmarking the performance of a company against noncompetitors rather than against competitors? Any valid for reason for doing so must be eliminated:

This suggests that benchmarking against competitors probably will not help a company discover better industrial practices. If such an analysis only reveals practices that the company already employs, what's the point? Choice (A) seems to suggest that benchmarking against noncompetitors, on the other hand, might focus on practices that managers don't already employ and thus be more useful.

You might be thinking, "Well, we can't say for sure that benchmarking against noncompetitors doesn't have the same disadvantage." That might be true, but at the very least choice (A) gives us no reason to believe that benchmarking against noncompetitors has the same disadvantage. In that case, choice (A) is neutral towards benchmarking against noncompetitors and negative towards benchmarking against competitors. This is a valid reason for benchmarking against noncompetitors instead of competitors, so (A) should be eliminated.

We know that benchmarking permits the manager of a company to discover better industrial practices. But what if competitors are intent on hiding such industrial practices from its competitors? In that case, it might be difficult to discover better industrial practices from competitors. If it's easier to get "inside" information about the unique practices of noncompetitors, then it would be easier to discover better industrial practices from those companies. (B) is a valid reason for benchmarking against noncompetitors instead of competitors, so it should be eliminated.

If companies that compete with each other are likely to have comparable levels of efficiency, it is unlikely that studying the practices of a competitor would help make your company any more efficient than your competitors. In other words, at best, you might end up learning some new practices that make your company about as efficient as it was to begin with. Studying noncompetitors, on the other hand, is likely to reveal practices that would aid in beating competitors. This is clearly a valid reason for benchmarking against noncompetitors instead of competitors, so choice (C) can be eliminated.

Let's say your company benchmarks against its competitors (within the same industry) and discovers some new practices that might be useful to adopt. However, if the managers at your company are not very receptive to those ideas and are unwilling to implement them, then the analysis would be of little value. Choice (D) tells us that managers are generally more receptive to new ideas from outside their own industry and thus more likely to adopt practices discovered from noncompetitors. This is a valid reason for benchmarking against noncompetitors instead of competitors, so (D) should be eliminated.

Consider the special circumstances of a company's products or markets. Competitors will likely have some of the same circumstances. Since noncompetitors will likely not have those same circumstances, benchmarking against noncompetitors probably won't help the company discover practices that take advantage of those special circumstances. Because choice (E) describes a disadvantage of benchmarking against noncompetitors, it should not be eliminated.

Choice (E) is the best answer.

gamjatang · Answer

(A) says that it is of no use to benchmark competitors.

(B) says that it is very difficult to benchmark competitors.

(C) says that it is of no use to benchmark competitors.

(D) says that it is of little use to benchmark competitors. 

(E) says that much of the success comes from the adoption of good practices of the same industry(=special circumstances of their products of markets)

I vote for (E).

terp26 · Answer

Ill go with E , it goes with the theory that you should benchmark against your competitors

B is wrong because it is a reason why companies should benchmark against companies outside of competitors, because they do not have access to competitive info

shalva · Answer

(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products or markets

This statement emphasizes importance of holding focus on specific product and specific market the company is currently operating in. So it is an argument against using non-competitor companies as benchmarks

jade3 · Answer

(A) Comparisons with competitors are most likely to fous on practices that the manager making the comparisions already employs
-No use to compare with competitors, as the company already employees the methods
 
(B) Getting "inside" information about the unique practices of competitors is particularly difficult
- No use to compare with competitors, as it is hard to get inside information.

(C) Since companies that compete with each other are likely to have cpmparable levels of efficiency, only benchmarking against noncompetitors is likely to reveal practices that would aid in beating competitors
- No use to compare with competitors, as benchmarking against noncompetitors would to reveal practices that would beat competitors

(D) Managers are generally more receptive to new ideas that they find outside their own industry
- No use to compare with competitors, as Managers are receptive to ideas outside the industry

(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products of markets
-The comparison with the competitors is important in this case, as practices that are adopted in similar markets are important.

Hence the answer should be E

shanewyatt · Answer

Was between A and E for me and my final choice is E

(A) Comparisons with competitors are most likely to fous on practices that the manager making the comparisions already employs

This is saying benchmarking with competitors is not that helpful - but the question is which one of these isn't an argument against benchmarking with non-competitors. (A) is a good reason that companies should benchmark with non-competitors.

(B) Getting "inside" information about the unique practices of competitors is particularly difficult

This is effectively saying that it requires too much effort to benchmark against the competitors, so the better option is to benchmark with non-competitors. Not an argument against benchmarking with non-competitors.

(C) Since companies that compete with each other are likely to have cpmparable levels of efficiency, only benchmarking against noncompetitors is likely to reveal practices that would aid in beating competitors

This is promoting benchmarking with non-competitors.

(D) Managers are generally more receptive to new ideas that they find outside their own industry

Promoting benchmarking with non-comptitors.

(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products of markets

This is suggesting that knowledge of their product markets is what makes a company successful - so in this case the company would have to benchmark with competitors - which is obviously not an argument for benchmarking with non-competitors. This is my choice.

soumanag · Answer

Need to find an option where it is not discussing about the rival companies / practices of other companies in the market, the option falling outside the scope of the argument :

(A) Comparisons with competitors are most likely to focus on practices that the manager making the comparisons already employs.
 Discusses disadvantage of benchmarking against competitors. 
(B) Getting “inside” information about the unique practices of competitors is particularly difficult.
 Discusses rival company and difficulty of benchmarking with competitors. 
(C) Since companies that compete with each other are likely to have comparable levels of efficiency, only benchmarking against noncompetitors is likely to reveal practices that would aid in beating competitors.
 Discuss advantage of benchmarking with other than competitors. 
(D) Managers are generally more receptive to new ideas that they find outside their own industry.
 Discuss advantage of benchmarking with other than competitors. 
(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products of markets. 
 Discuss about market and product- out of scope of the original argument 
E is the answer.

BKimball · Answer

ajit257,

In general, I'd suggest the following for EXCEPT questions:

Before you get to the answer choices, be explicit with yourself about what you expect to see in the answer choices and rephrase the question to make that clear to yourself.

For example, if the question is: "All of the following, if true, weaken the conclusion EXCEPT" then you'll expect to see 4 answer choices that weaken the conclusion and 1 that either has no bearing at all or in fact strengthens the conclusion. Tell yourself: "I'm looking for something that strengthens the conclusion or is totally irrelevant."

If the question is similar to yours posted below, you'd expect to see four answer choices that are completely logical and valid rationale for benchmarking against non-competitors and one that either provides justification for benchmarking against competitors or is irrelevant. Tell yourself: "I'm looking for an answer that would make me want to benchmark my performance against competitors or is totally irrelevant to the issue."

If you can rephrase the question to be explicit, you'll be much less likely to fall for trap answers.

Does that help? Do you have specific concerns about this particular CR question?

Brett

AryamaDuttaSaikia · Answer

The question is basically asking you to choose an answer which indicates the company is in competition with competitors. Four answer choices indicate that the company is in competition with non competitors and only one would indicate it is in competition with a competitor. That one would be your answer. If I give an example say: " She is not against him." It translates into " She is in his favor.". Double negatives translate into positives.

PadmajaH · Answer

I don't understand what the question says, please can anyone elaborate...

Any of the following, if true, is a valid reason for benchmarking the performance of a company against companies with which it is not in competition rather that against competitors EXCEPT:

Skywalker18 · Answer

Hi PadmajaH , The question stem says that there are some valid reasons that the performance of a company should be benchmarked against non-competitors rather than competitors. Since , this is an except question , 4 of the answers will provide reasons to benchmark the performance of companies against non-competitors . The correct answer will not . Hope this helps!!

gmatexam439 · Answer

One way to judge the performance of a company is to compare it with other companies. This technique, commonly called "benchmarking", permits the manager of a company to discover better industrial practices and can provide a justification for the adoption of good practices.

Any of the following, if true, is a valid reason for benchmarking the performance of a company against companies with which it is not in competition rather that against competitors EXCEPT:

(A) Comparisons with competitors are most likely to fous on practices that the manager making the comparisions already employs - If the practices being compared are already employed, then the manager won't get any new insight. Thus, comparison with non competitor will be more beneficial. 
(B) Getting "inside" information about the unique practices of competitors is particularly difficult - If getting the inside information of the competitor is difficult, then valid comparisons can't be made. Thus, comparison with non competitor will be more beneficial. 
(C) Since companies that compete with each other are likely to have cpmparable levels of efficiency, only benchmarking against noncompetitors is likely to reveal practices that would aid in beating competitors - This is a direct strengthener. 
(D) Managers are generally more receptive to new ideas that they find outside their own industry - If the managers are receptive of new ideas, then going through the strategies employed by non competitors will be fruitful. Thus, comparison with non competitor will be more beneficial. 
(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products of markets - This is option says that the manager takes advantage of the product present in the market. It is out of context.

gmatexam439 · Answer

One way to judge the performance of a company is to compare it with other companies. This technique, commonly called "benchmarking", permits the manager of a company to discover better industrial practices and can provide a justification for the adoption of good practices.

Any of the following, if true, is a valid reason for benchmarking the performance of a company against companies with which it is not in competition rather that against competitors EXCEPT:

(A) Comparisons with competitors are most likely to fous on practices that the manager making the comparisions already employs - This is a valid reason for comparisons with non-competitors. 
(B) Getting "inside" information about the unique practices of competitors is particularly difficult - This is a valid reason for comparisons with non-competitors because if the information regarding processes of competitors is not available then it makes sense to compare the processes with those of non-competitors. 
(C) Since companies that compete with each other are likely to have cpmparable levels of efficiency, only benchmarking against noncompetitors is likely to reveal practices that would aid in beating competitors - This is a valid reason for comparisons with non-competitors. 
(D) Managers are generally more receptive to new ideas that they find outside their own industry - This is a valid reason for comparisons with non-competitors. 
(E) Much of the success of good companies is due to their adoption of practices that take advantage of the special circumstances of their products of markets - Correct. This option is talking about the internal processes and product line. Irrelevant.

smmunna · Answer

Situation

“Benchmarking” is a technique for judging the performance of a company by comparing it with other companies. The goal is to find and adopt better industrial practices.

Reasoning

Which one condition does NOT recommend benchmarking against noncompetors? Which one condition IS a well-founded reason to benchmark against competitiors? First, sort through the given information and the answer choices for eht question to gain an understanding of the potential advantages of disadvantages of comparing a company to its competitors or to noncompetitors. What are the reasons in favor of benchmarking against noncompetitiors information about noncompeting companies is easier to obtain; it can offer new insights; and it may be easier to put onto practice. Why them might a manager choose to benchmark against competitors? Competing companies do share special circumstances involving products and markets. If companies are often successful because of practices related ot these special circumstances within their industry, then benchmarking against competitors will reveal these practice and so be more fruitful than benchmarking against noncompetitors.

A. Since benchmarking against competitors would yield few new practices, it would be better to b benchmark against noncompetitors.

B. If information about competitors is hard to obtain, benchmarking against noncompetiors is preferable.

C. Since benchmarking against noncompetitors would yield practices useful in beating competitors, benchmarking against noncompetitors is preferable

D. If managers are more likely to adopt new practices learned from benchmarking against noncompetitors, then this techniques is preferable

E. Correct. This sttement properly identifies the rationalbe that supports a company's benchmarking against its competitors.

Pikachuu · Answer

Except/  Strengthen / Resolve the Paradox
 
Boil it Down:
One practice is stated
Its meaning/ uses/ advantages
No conclusion. Hence, not Strengthen. May be a resolve the paradox EX
 
04 # Incorrect answers will show benchmarking with non-competitors > competitors
01 # Correct answer will not prefer such benchmarking 
 
Any of the following, if true,  is a valid reason  for benchmarking the performance of a company against companies with which it is not in competition rather than against competitors  EXCEPT :
 
 (A) Comparisons with competitors are most likely to focus on practices that the  manager making the comparisons already employs  – Hence, benchmarking with non-competitors is a valid reason - OUT
 
 (B) Getting "inside" information about the  unique practices of competitors is particularly difficult  – Hold on – Not sexy –says it’s hard to get ideas from competitors – we have to make a little jump to infer it as valid reason for benchmarking with non-competitors - OUT
 
 (C) Since companies that compete with each other are  likely to have comparable levels of efficiency ,  only benchmarking against non-competitors  is likely to reveal practices that would aid in beating competitors – Hence, benchmarking with non-competitors is a valid reason - OUT
 
 (D) Managers are generally more receptive to new ideas that they find  outside their own industry  – Hence, benchmarking with non-competitors is a valid reason - OUT
   
 (E) Much of the success of good companies is due to their adoption of practices that take advantage of the  special circumstances of their products or markets  – Hold on - Not sexy – it actually provides a reason for benchmarking within the competitors – makes more sense than option B
   
A= Competitors are bad
B= Competitors are bad
C= Non-competitors are good
D= Non-competitors are good
E= Competitors are good.

One way to judge the performance of a company is to compare it with

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