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# One way to judge the performance of a company is to compare

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Manager
Joined: 06 Jul 2005
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Location: Bangalore, India
One way to judge the performance of a company is to compare [#permalink]

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30 Oct 2005, 05:44
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55% (hard)

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66% (01:37) correct 34% (01:43) wrong based on 5132 sessions

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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
(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 cpmparable levels of efficiency, only benchmarking against noncompetitors 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 of markets
Director
Joined: 14 Sep 2005
Posts: 964
Location: South Korea
Re: One way to judge the performance of a company is to compare [#permalink]

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30 Oct 2005, 05:55
7
(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).
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##### General Discussion
Manager
Joined: 07 Jul 2005
Posts: 103
Re: One way to judge the performance of a company is to compare [#permalink]

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30 Oct 2005, 12:16
E it is.
Since, every other choice seems to favor benchmarking companies that are not in direct competition.
Current Student
Joined: 29 Jan 2005
Posts: 5117
Re: One way to judge the performance of a company is to compare [#permalink]

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31 Oct 2005, 06:54
Sure, E. All other answer choices give reasons not to benchmark against competitors.
Senior Manager
Joined: 11 May 2004
Posts: 448
Location: New York
Re: One way to judge the performance of a company is to compare [#permalink]

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31 Oct 2005, 07:36
The question stem really confused me with the negatives, but I finally got E.

What is the OA?
Senior Manager
Joined: 15 Jan 2008
Posts: 262
Re: One way to judge the performance of a company is to compare [#permalink]

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13 Mar 2008, 07:28
1
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 noncompetitors 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 of markets.
Director
Joined: 10 Sep 2007
Posts: 912
Re: One way to judge the performance of a company is to compare [#permalink]

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13 Mar 2008, 07:47
I will go wth B. As it is really tough to get insider information of competitors so it is better to bench mark against industry stadnards. Moreover even if you have inside information from competitor, it might be copy righted and so it will be illegal to use such information in any manner.
VP
Joined: 22 Oct 2006
Posts: 1425
Schools: Chicago Booth '11
Re: One way to judge the performance of a company is to compare [#permalink]

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13 Mar 2008, 08:11
2
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
Senior Manager
Joined: 15 Aug 2007
Posts: 252
Schools: Chicago Booth
Re: One way to judge the performance of a company is to compare [#permalink]

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13 Mar 2008, 21:31
E

E is suggesting to adopt practices specific to products.. which means advocating against benchmarking against companies that don't make similar products.
Intern
Joined: 21 Feb 2008
Posts: 24
Re: One way to judge the performance of a company is to compare [#permalink]

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13 Mar 2008, 23:50
Please somebody tell whether E is correct or not?
Senior Manager
Joined: 15 Jan 2008
Posts: 262
Re: One way to judge the performance of a company is to compare [#permalink]

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14 Mar 2008, 00:21
Hello All,

E is the OA.

Earlier i didnt get it but now i got it .
IT says that benchmarking at competitors wud help and benchmarking against non competitors wouldnot help. [:)]
Manager
Joined: 28 Jul 2009
Posts: 129
Re: One way to judge the performance of a company is to compare [#permalink]

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25 Nov 2009, 08:30
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
(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 cpmparable levels of efficiency, only benchmarking against noncompetitors 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 of markets
Joined: 20 Aug 2009
Posts: 289
Location: Tbilisi, Georgia
Schools: Stanford (in), Tuck (WL), Wharton (ding), Cornell (in)
Re: One way to judge the performance of a company is to compare [#permalink]

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25 Nov 2009, 09:49
2
(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
Manager
Joined: 19 Nov 2007
Posts: 205
Re: One way to judge the performance of a company is to compare [#permalink]

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25 Nov 2009, 23:15
5
(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
Manager
Joined: 24 Jun 2009
Posts: 54
Re: One way to judge the performance of a company is to compare [#permalink]

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26 Nov 2009, 09:37
5
1
bsv180985 wrote:
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
(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 cpmparable levels of efficiency, only benchmarking against noncompetitors 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 of markets

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.
Intern
Joined: 11 Jul 2010
Posts: 27
Re: One way to judge the performance of a company is to compare [#permalink]

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04 Sep 2010, 05:54
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 noncompetitors 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 of markets.
Manager
Joined: 09 Jun 2010
Posts: 107
Re: One way to judge the performance of a company is to compare [#permalink]

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04 Sep 2010, 06:55
3
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
Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 862
Location: Singapore
Concentration: General Management, Finance
Schools: Chicago Booth - Class of 2015
Re: One way to judge the performance of a company is to compare [#permalink]

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04 Sep 2010, 07:10
P1 : To judge the performance is to compare it with other companies
P2 : benchmarking allowws manager to adopt good practices

Which of the following is NOT a valid reason to benchmark against a non competitor?

(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. >>> Odd one. Hence the answer. The "special circumstance" makes the benefits of copying non portable.
Manager
Joined: 08 Sep 2010
Posts: 199
Location: India
WE 1: 6 Year, Telecom(GSM)
Re: One way to judge the performance of a company is to compare [#permalink]

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Updated on: 10 Oct 2010, 03:40
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
(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 noncompetitors 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.

OA will be given tomorrow.

If u like the question consider giving KUDOS

Originally posted by ankitranjan on 09 Oct 2010, 03:07.
Last edited by ankitranjan on 10 Oct 2010, 03:40, edited 1 time in total.
Senior Manager
Status: Time to step up the tempo
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Posts: 384
Location: Milky way
Schools: ISB, Tepper - CMU, Chicago Booth, LSB
Re: One way to judge the performance of a company is to compare [#permalink]

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09 Oct 2010, 04:25
ankitranjan wrote:
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
(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 noncompetitors 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.

OA will be given tomorrow.

If u like the question consider giving KUDOS

To determine:
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:

can be rephrased as

"Any valid reason for benchmarking with non-competitors rather than competitors EXCEPT" --

which again can be rephrased to remove EXCEPT as --

"Any valid reason for benchmarking against competitors rather than non-competitors"

We are asked to find out a reason that is NOT a valid reason for benchmarking against competitors rather than non-competitors.

Thus after simplifying the "to find" part of the question we can see that option A is the best choice.

Reason for eliminating other options.

B -- One more reason to benchmark against non-competitors. Incorrect.
C -- Incorrect. One more reason to benchmark against non-competitors. Again this option would be enticing to those who might not have clearly grasped the double negative in the argument.
D -- Incorrect. Out of their own industry, there would be lot of non-competitors than competitors.
E -- Out of scope.

Actually after solving the question, I was able to recollect that in the EXCEPT and LEAST CR question types there would be ONLY ONE correct option unlike the strengthen or weaken type questions. Hence we could eliminate option B and C since both these options are suggesting to benchmark against non-competitors.
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Re: One way to judge the performance of a company is to compare   [#permalink] 09 Oct 2010, 04:25

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