Falson and Falson Transparency Report

It is here that understanding the organisation’s culture becomes important.The current culture of an organisation is, to a great extent, the legacy of itshistory; history becomes ‘encapsulated in culture’.22 So understanding an organisation’sculture is one way of understanding the historical inuences that, as wehave seen, can be very powerful. The next section goes on to explain what cultureis and how it can be analysedQ2 Jan 11 – Benchmarking against “industry norms” is commonly used in order to assess the standards of performance of a parcular organisaon. Crically evaluate the benets and potenal drawbacks of this type of benchmarking using examples to support your answer., Ch 3, p.1163.6.3 Benchmarking31This section considers the value of benchmarking, which can be used as a way ofunderstanding how an organisation’s strategic capability, in terms of internalprocesses, compare with those of other organisations.There are dierent approaches to benchmarking:Historical benchmarking. Organisations may consider their performance inrelation to previous years in order to identify any signi?cant changes. Thedanger is that this can lead to complacency since it is the rate of improvementcompared with that of competitors that is really important.DIAGNOSING STRATEGIC CAPABILITY 117Industry/sector benchmarking. Insights about performance standards can begleaned by looking at the comparative performance of other organisations inthe same industry sector or between similar service providers against a setof performance indicators. Some public sector organisations have, in eect,acknowledged the existence of strategic groups by benchmarking againstsimilar organisations rather than against everybody: for example, localgovernment services and police treat ‘urban’ dierently from ‘rural’ in theirbenchmarking and league tables. An overriding danger of industry norm comparisons(whether in the private or public sector) is, however, that the wholeindustry may be performing badly and losing out competitively to other industriesthat can satisfy customers’ needs in dierent ways. Another danger withbenchmarking within an industry is that the boundaries of industries areblurring through competitive activity and industry convergence. For example,supermarkets are (incrementally)