The current issue and full text archive of this journal is available at www.emeraldinsight.com/1463-5771.

htm

BIJ 15,4

368

Benchmarking and performance measurement: a statistical analysis

Sandra Moffett
School of Computing and Intelligent Systems, University of Ulster, Londonderry, UK

Karen Anderson-Gillespie
Belfast City Council, Belfast, UK, and

Rodney McAdam
School of Business Organisation and Management, University of Ulster, Newtownabbey, UK
Abstract
Purpose The purpose of this paper is to explore the theoretical understanding and practical application of lead benchmarking and performance measurement as a way to achieve organisational change. Design/methodology/approach The paper combines a theory building/theory testing approach. Based on literary ndings a conceptual model has been postulated to identify constructs associated with upstream performance measurement and lead benchmarking. A selection of research questions are posed and tested via empirical study. The survey instrument was distributed to 800 UK organisations which resulted in 157 responses. Findings Results from the empirical research indicate that new lead, forward looking, predictive benchmarks need to be developed to support lead benchmarking and performance measurement activities. Furthermore, it was found that currently larger organisations are more likely to adopt these practices, with considerable variation across organisational sectors. Research limitations/implications The empirical research achieved a 19.6 per cent response rate. While this is adequate to report statistical representation, further data collection would be benecial for industry generalisations. Practical implications Many organisations struggle to grasp metric measurement for lead benchmarking. This paper may provide insight into key factors to be considered for lead benchmarking uptake. Originality/value This paper builds on current literature and develops a conceptual model which is then tested via empirical research. This is a novel approach in the area of lead benchmarking. Keywords Benchmarking, Performance measures, Statistical analysis Paper type Research paper

Benchmarking: An International Journal Vol. 15 No. 4, 2008 pp. 368-381 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635770810887203

1. Introduction Many emerging business improvement philosophies, approaches and methodologies, such as the learning organisation (Senge, 1990), total quality management (TQM) (Deming, 1986) and knowledge management (Nonaka and Takeuchi, 1995; Davenport and Prusak, 1998) involve an element of benchmarking and performance measurement (Neely, 1998; Atkinson and Brown, 2001; Lockamy, 1998; Corrigan, 1998). However, these approaches tend to include mainly lag or production measures with little emphasis on lead measures focusing on analysing predictive and future performance comparisons.

Hence, most organisations tend to benchmark based on hard rather than soft data (Cassell et al., 2001) ignoring non-nancial measures such as quality, market share, customer satisfaction, human resources, innovation and learning (Geanuracos, 1994). The current literature raises a number of questions in relation to denitions, implementations and indicators associated with lead benchmarking and performance measurement. For example, how are lead innovative measurement tools and associated components dened in organisations? How can benchmarking and performance measurement be conceptualised, measured, and assessed? What specic metrics are organisations utilising to support the development of lead benchmarking and performance measurement? To what extent do organisations undertake lead benchmarking and what are the outcomes of this process? The aim of this paper is to explore the understanding and application of lead benchmarking and performance measurement as a possible means of achieving increased organisational change. Based on current literature a conceptual model is proposed to capture the key dimensions and indicators of lead benchmarking. Constructs of the model are then used to form research questions which are tested via empirical study. A total of 157 UK organisations responded to the research invitation, these organisations are attempting to employ lead benchmarking for upstream performance measurement. 2. Benchmarking Dening benchmarking can be a confusing task as both managers and academics tend to create denitions according to their own perceptions and applications of the technique and philosophy (Fernandez et al., 2001). The growth, diversity and maturity of benchmarking have led to the emergence of numerous denitions; indeed over 42 denitions were found by one source (Heib and Daneva, 1995). The most popular, well-documented denition is that of Camp (1989) who simply states that, Benchmarking is the search for industry best practices that will lead to superior performance. Vaziri (1992) proposes a more denitive view in terms of achieving targets, suggesting that:
[. . .] benchmarking is the process of continually comparing a companys performance on critical customer requirements against that of the best in the industry (direct competitors) or class (companies recognised for their superiority in performing certain functions) to determine what should be improved.

Benchmarking and performance measurement 369

Although many denitions exist there is consensus that benchmarking is a structured process to facilitate the improvement of current organisational standards by adopting superior practices. To identify current state of play within organisations benchmarking has been applied in many traditional areas of performance mainly at the output stage. Based on the measurement of lag downstream performance indicators, traditional benchmarking has been useful in aiding incremental and anticipated planned changes within organisations, a point outlined by Yasin (2002) benchmarking is a managerial technique to identify performance gaps and improve operational performance. However, for benchmarking to be fully developed revolutionary and unanticipated change must also be considered. Increasingly benchmarking is occurring at the input, process stage where lead benchmarks of performance are readily identied at initial project stages. The development of balanced, multi-dimensional and multi-facet performance measurement frameworks emphasize non-nancial, external and future looking performance measures that are proactive and preventive in nature. These measures

BIJ 15,4

help anticipate and impact future desired results (Manoochehri, 1999) for business improvement, market stability and exploitation of knowledge resources which in turn increase organisational competitive advantage. 3. Research methodology To gain a strong understanding of the benchmarking process the researchers conducted an extensive review of current literature. Identifying the constructs of lead benchmarking enabled a conceptual model to be created, this model is shown in Figure 1. The gure shows that upstream organisational activities play a key role in lead benchmarks and that associated lead benchmarking indicators reect knowledge and learning as opposed to traditional resource measurements. There was insufcient information in the literature to explain how basic variables such as organisational size and sector may affect lead benchmarking and its conceptualization. Therefore, taking the advice of Remenyi et al. (1999) the researchers have used the variables shown as the basic building blocks for further study. By adopting a critically reective, empirical research approach the effects of the variables can be explored using statistical techniques. The key research questions to be answered by empirical investigation are: RQ1. How is lead benchmarking and performance measurement dened in organisations? RQ2. What approaches are organisations using to develop lead benchmarking and performance measurement? RQ3. What measures are organisations using and intending to use to show the effectiveness of lead benchmarking and performance measurement?

370

Upstream Performance Dimensions Beyond Internal & External Performance Measures Lead & Lag Performance Measures Innovation Strategy Employee Development Processes Customers Operations

Lead Benchmarking Indicators Knowledge Transfer Supply Chain Learning Transfer Technology Transfer Information Sharing

Figure 1. Conceptual elements of lead benchmarking

Given the exploratory nature of the research questions a large-scale survey research methodology was adopted (Remenyi et al., 1999). Organisations to participate in the study were selected from UK quality centre lists. It was anticipated that organisations involved in other business improvement activities such as TQM would be more likely to have an understanding of emerging measurement approach such as lead benchmarking. A questionnaire was developed guided by the variables outlined on the conceptual model (Figure 1). To formulate questions exploratory research including literary review and preliminary semi-structured interviews (Easterby-Smith et al., 2002) with a number of informed individuals, including management consultants and practicing managers was undertaken. Therefore, each question had been derived from a triangulation of case data, previous questionnaires and semi-structured interviews in line with the suggestion of Remenyi et al. (1999). Pilot testing of the questionnaire was developed using a two-phase approach (Babbie, 2001). Firstly, a hard copy of the questionnaire was pre-piloted within ten organisations and with ten academics working in related disciplines, each with extensive benchmarking and performance measurement experience. This led to improvements in the overall questionnaire structure, layout, wording and terminology, sequencing of questions, and the addition of questions. The second phase of the pilot testing involved a blackbox study of the computerised self-administered questionnaire, within ten organisations. This enabled various cliches, errors in spelling and numbering, graphics and font size, navigation problems and page layout to be amended. A nal version of the computerised e-mail notication self-administered questionnaire was developed. The questionnaire was divided into ten main sections of interest, in this paper due to size constraints, the main focus of the analysis is based solely on elements from Sections 1 and 2 relating to organisational demographics and some of the questions from Sections 5 and 6 of the questionnaire dealing explicitly with lead benchmarking and performance measurement. The questionnaire used a combination of 49 closed questions and one main open comment section at the end. The questionnaire was designed using DreamWeaver MX. The survey was analysed using a Statistical Package for Social Science Version 11 software package. Descriptive statistics, which involved the use of frequency tables, charts and cross tabulations, and demographic comparisons using x 2 tests and one-way ANOVA tests between and within groups were utlised. Owing to lack of space only the main responses are shown in the resultant ndings. In total 800 questionnaires were sent with 157 usable returns, a response rate of 19.6 per cent. This is an acceptable response rate considering response rates for e-mail notication surveys vary from a very low of 6 per cent (Tse et al., 1995) to a high of 75 per cent (Kiesler and Sproull, 1986). 4. Results and discussion 4.1 Organisational demographics In relation to participant organisations (n 157) just over a quarter of the respondents (n 40, 25.5 per cent) operated within the public sector. This gure is closely followed by participant organisations from other manufacturing industry (n 34, 21.7 per cent). About 28 respondents (17.8 per cent) operated within the service sector and 20 respondents (12.7 per cent) operated within the manufacturing industry. This is closely followed by the information technology (IT) sector (n 18, 11.5 per cent) and the

Benchmarking and performance measurement 371

BIJ 15,4

372

energy sector (n 7, 4.5 per cent). An additional four industrial sectors with very low numbers and percentages made up the total sample population (chemical n 4, 2.5 per cent; voluntary/not for prot n 3, 1.9 per cent; research and consultancy n 2 1.3 per cent; university n 1, 0.6 per cent). These gures are shown in Figure 2. In relation to organisation size, 44.9 per cent of respondents are large organisations (n 70), 30.1 per cent are medium (n 47) and 25 per cent are micro/small (n 39). Existing business improvement and TQM studies on small and medium organisations by Shaw (1999) and McAdam (2000) have shown that the small band is best dened as up to 99 employees and the medium band as 100-499 employees. Further demographic investigation outlined that a total of 107 organisations have been in operation for more than 20 years (68 per cent), 40 respondents have been in operation 5-20 years (25 per cent) and 6.4 per cent (n 10) state that their organisation has been in operation less than ve years. 4.2 Lead benchmarking by denition When asked to dene lead benchmarks a strong response was provoked for a number of items (Table I). For example, the majority of respondents (n 85, 54.1 per cent) consider performance drivers to be key. This gure was closely followed by performance measures (n 78, 49.7 per cent), forward looking (n 72, 45.9 per cent) and proactive leading indicators (n 66, 42 per cent). These ndings are consistent with those of
Industrial Sector Public Sector Other Manufacturing Service Manufacturing IT Energy Chemical

Figure 2. Respondent organisations by sector

Voluntary/Not for profit Research/Consultancy University

Frequency Predictive measures Proactive leading indicators Forward looking Future looking Performance drivers Dynamic metrics Financial measures Performance measures Cost measures Competitor measures 50 66 72 59 85 23 22 78 29 37

Valid (per cent) 31.8 42.0 45.9 37.6 54.1 14.6 14.0 49.7 18.5 23.6

Table I. Denition of lead benchmarks

Fernandez et al. (2001) and Sarkis (2001) who attempted to differentiate between lead benchmarking and traditional benchmarking. 4.3 Levels of use and development within organisations From a total of 147 respondents who replied to questioning regarding the application of benchmarks within their organisation, 104 respondents (70.74 per cent) stated that benchmarks were mostly used at the operational level, and only 43 respondents (29.25) claimed that they were used at a strategic level. A further comparison with organisational size revealed similar ndings (Table II). These ndings depict the lack of development of lead benchmarks and performance measurements in organisations. As Sarkis (2001) outlines lead benchmarking as being most effective at a strategic level the ndings demonstrate the potential for lead benchmarking within the respondent organisations, not least for global competitive comparison and development (Watson, 1993). Leonard and McAdam (2003) observed similar effects in their multiple case analysis of TQM at strategic and operational level in organisations which showed that organisations may be underestimating the potential benets of adopting lead benchmarking. 4.4 Location of lead benchmarks in the organisation Table III shows that 94 respondents (68.61 per cent) out of a total of 137 state that lead benchmarks are found more upstream within their organisation while 43 respondents (31.38 per cent) stated downstream. It can be noted from Table III that across all sizes of organisations at least twice the number of lead benchmarks are perceived as coming from upstream in the organisation. Comparing Tables II and III with Sarkis (2001) analysis shows that organisations have located lead benchmarks in line with that suggested in the literature. Although there remains a need to recognise this phenomenon as a strategic issue more than an operational issue, there are encouraging signs that more strategic identication is happening, a point also indicated by Welch and Mann (2001). For example, the performance management dimensions identied as being upstream were strategy 51.3 per cent, employee development 45.5 per cent, new product development 44.2 per cent, processes 43.6 per cent and nally innovation 39.1 per cent.
Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total Strategic Frequency Percentage within Percentage within Operational Frequency Percentage within Percentage within Total Frequency Percentage within Percentage within 10 23.3 29.4 24 23.1 70.6 34 23.1 100.0 16 37.2 34.8 30 28.8 65.2 46 31.3 100.0 17 39.5 25.4 50 48.1 74.6 67 45.6 100.0 43 100.0 29.3 104 100.0 70.7 147 100.0 100.0

Benchmarking and performance measurement 373

respondents employee respondents employee respondents employee

Table II. A cross tabulation of organisational size and benchmark levels applied

BIJ 15,4
Upstream Frequency Percentage within Percentage within Downstream Frequency Percentage within Percentage within Total Frequency Percentage within Percentage within respondents employee respondents employee respondents employee

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total 21 22.3 67.7 10 23.3 32.3 31 22.6 100.0 28 29.8 66.7 14 32.6 33.3 42 30.7 100.0 45 47.9 70.3 19 44.2 29.7 64 46.7 100.0 94 100.0 68.6 43 100.0 31.4 137 100.0 100.0

374

Table III. A cross tabulation of organisational size and lead benchmark location

4.5 Lead performance measures A number of different lead performance dimensions found more upstream within the respondent organisations were identied. Cross tabulation between the dimension and organisation size (Table IV), outlined that within small organisations (n 39) 17 respondents (43.6 per cent) stated customers as the highest upstream performance dimension. This gure was closely followed by new product development (n 15, 38.5 per cent). Within medium-sized organisations (n 47) 25 respondents (53.2 per cent) identied new product development as the highest upstream performance dimension. This was closely followed by processes and strategy, both obtaining 24 responses (51.1 per cent). Within large organisations, the ve most important elements identied from a total of 70 respondents were strategy (n 42, 60.0 per cent); employee development (n 35, 50.0 per cent), processes (n 31, 44.3 per cent), innovation (n 30, 42.9 per cent) and new product development (n 29, 41.4 per cent). This gures indication that organisations need to address the challenge of improved charting of the upstream parts of the organisation as shown in Figure 1. Table V shows that the majority of respondent organisations consider both lead and lag benchmarks (n 52, 37.7 per cent, total of 138 responses). In contrast 37.0 per cent (n 51) state they mostly benchmark lead measures while just over a 25 per cent (n 35) claim they mostly benchmark lag measures. When cross-tabulated with organisation size, a few distinct characteristics are evident. Firstly, the analysis depicts that both small- and medium-sized organisations follow the same pattern of benchmarking. The majority of organisations in both cases apply both benchmarking techniques, followed by those who adopt lead benchmarking only. In contrast within large organisations (n 66), the majority of respondents (n 25, 37.9 per cent) claim to benchmark lead measures only. These ndings are consistent with those of Table V reecting the more progressive approach to lead performance measures taken by large organisations in comparison to smaller organisations. In addition these ndings reect the follow through from performance dimensions to measures as indicated conceptually in Figure 1. 4.6 Benchmarking maturity levels From Table VI one can depict that the majority of organisations who are undertaking benchmarking are new to the benchmarking process (n 67, 48.9 per cent).

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total (n 39) (n 47) (n 70) (n 156) New product development Frequency Percentage within employee Strategy Frequency Percentage within employee Operations Frequency Percentage within employee Employee development Frequency Percentage within employee Processes Frequency Percentage within employee Customers Frequency Percentage within employee Supplier development Frequency Percentage within employee Culture Frequency Percentage within employee Innovation Frequency Percentage within employee 15 38.5 14 35.9 14 35.9 14 35.9 13 33.3 17 43.6 5 12.8 7 17.9 13 33.3 25 53.2 24 51.1 19 40.4 22 46.8 24 51.1 14 29.8 15 31.9 18 38.3 18 38.3 29 41.4 42 60.0 24 34.3 35 50.0 31 44.3 25 35.7 18 25.7 26 37.1 30 42.9 69 44.2 80 51.3 57 36.5 71 45.5 68 43.6 56 35.9 38 24.4 51 32.7 61 39.1

Benchmarking and performance measurement 375

Table IV. A cross tabulation of organisational size with lead performance dimensions, which are found more upstream within organisations

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total Lead Frequency Percentage Percentage Lag Frequency Percentage Percentage Both Frequency Percentage Percentage Total Frequency Percentage Percentage 12 23.5 41.4 4 11.4 13.8 13 25.0 44.8 29 21.0 100.0 14 27.5 32.6 12 34.3 27.9 17 32.7 39.5 43 31.2 100.0 25 49.0 37.9 19 54.3 28.8 22 42.3 33.3 66 47.8 100.0 51 100.0 37.0 35 100.0 25.4 52 100.0 37.7 138 100.0 100.0

within respondents within employee within respondents within employee within respondents within employee within respondents within employee

Table V. A cross tabulation of organisational size with the types of benchmark measures

BIJ 15,4
Introduction Frequency Percentage within Percentage within Growth Frequency Percentage within Percentage within Maturity Frequency Percentage within Percentage within Decline Frequency Percentage within Percentage within Total Frequency Percentage within Percentage within group overall group overall group overall group overall group overall

Lead benchmarks 26 38.8 52.0 12 23.1 24.0 10 66.7 20.0 2 66.7 4.0 50 36.5 100.0

Q. 29 Lag benchmarks 20 29.9 57.1 12 23.1 34.3 2 13.3 5.7 1 33.3 2.9 35 25.5 100.0

Both 21 31.3 40.4 28 53.8 53.8 3 20.0 5.8

Total 67 100.0 48.9 52 100.0 38.0 15 100.0 10.9 3 100.0 2.2

376

Table VI. A cross tabulation of measures mostly benchmarked with benchmarking maturity levels

52 38.0 100.0

137 100.0 100.0

Within this remit it is interesting to note that 26 respondents (38.8 per cent) have adopted a lead benchmarking approach, 20 respondents (29.9 per cent) are focused on lag measurement while 21 organisations (31.3 per cent) are utilising both. The closeness of this gures outlines that organisations commencing on the benchmarking journey are still unclear as to which approach is the most benecial. In contrast the majority of organisations claiming to be within the growth stage of benchmarking tend to use a combination of both lead and lag benchmarks (n 28, 53.8 per cent). This gure would give the impression that a combination of techniques is the best approach to adopt, so it is somewhat contradictory that the majority of organisations who have reached a level of maturity with benchmarking tend to use lead benchmarks (n 10, 66.7 per cent). Although the results of the analysis undertaken in this section are quite contradictory they overall results do indicate, in agreement with Bond (1999) that there is recognition amongst organisations that progression on the benchmarking journey must include lead benchmarking, with appropriate dimensions and measures. Hence, increased maturity levels lead to more sophisticated use of measures as found by Sarkis (2001). In summary, organisational attitudes to benchmarking must be developmental rather than treating the approach as a one-off initiative. 4.7 Measures to support the dimensions Probing further into the dimensions of lead benchmarking a total of 156 responded to questioning regarding specic lead benchmarking measures used within their organisations. The results of the measurement items cross tabulated with organisation size can be viewed in Table VII.

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total (n 39) (n 47) (n 70) (n 56) No. of new products/services Frequency Percentage within employee IT expense/employee Frequency Percentage within employee Product return/sales Frequency Percentage within employee Customer retention Frequency Percentage within employee R&D expenditure Frequency Percentage within employee Training exp/hr per employee Frequency Percentage within employee Customer complaints Frequency Percentage within employee No. of processes reviewed/implemented Frequency Percentage within employee 12 30.8 5 12.8 6 15.4 10 25.6 6 15.4 14 35.9 17 43.6 9 23.1 13 27.7 2 4.3 23 48.9 11 23.4 8 17.0 21 44.7 30 63.8 11 23.4 20 28.6 12 17.1 12 17.1 18 25.7 12 17.1 27 38.6 45 64.3 29 41.4 45 28.8 19 12.2 41 26.3 39 25.0 26 16.7 62 39.7 92 59.0 49 31.4

Benchmarking and performance measurement 377

Table VII. A cross tabulation of organisation size with specic lead benchmark measures

4.8 Benets of lead benchmarking In relation to the benets of applying lead benchmarking the highest number of respondents (n 99, 63 per cent) stated that the main benet received was improved customer service, this was closely followed by improved organisational performance (n 98), improved processes (n 92), improved strategy (n 89), cost reductions (n 75) and nally the ability to adapt to change (n 71). A total of 156 respondents had answered this question. When cross tabulated with organisational size (Table VIII), it is evident that within small organisations the key benets gained by using lead benchmarking include improvements in strategy, customer service and organisational performance. These areas are also reected in both medium and large organisations with the addition of improved processes. 4.9 Expected future use of lead benchmarks When cross-tabulated with organisational size (Table IX), 109 respondents from a total of 142 stated that they expect the number of lead benchmarks used within their organisations to increase. The highest response came from large organisations (n 53, 48.6 per cent). Surprisingly, then the largest response to questioning in relation to the number of lead benchmarks used remaining static also came from within the large organisation category (n 15, 48.4 per cent of a total sub-sample of n 31 respondents). A total of 24 respondents (22 per cent) stated that they expect the

BIJ 15,4

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total (n 39) (n 47) (n 70) (n 156) Improved strategy Frequency Percentage within employee Knowledge of IND best pract Frequency Percentage within employee Increases in prot Frequency Percentage within employee Cost reductions Frequency Percentage within employee Improved customer service Frequency Percentage within employee Improved processes Frequency Percentage within employee Improved organisational performance Frequency Percentage within employee Ability to adapt to change Frequency Percentage within employee Increased competitiveness Frequency Percentage within employee 19 48.7 15 38.5 8 20.5 10 25.6 23 59.0 17 43.6 23 59.0 14 35.9 12 30.8 25 53.2 22 46.8 23 48.9 28 59.6 33 70.2 30 63.8 31 66.0 25 53.2 26 55.3 45 64.3 32 45.7 25 35.7 37 52.9 43 61.4 45 64.3 44 62.9 32 45.7 27 38.6 89 57.1 69 44.2 56 35.9 75 48.1 99 63.5 92 52.0 98 62.8 71 45.5 65 41.7

378

Table VIII. A cross tabulation of organisational size with the benets of using lead benchmarking

proportion of lead benchmarks to increase within small organisations. Within the medium sized organisations 32 respondents (72.7 per cent) stated that they expect the proportion of lead benchmarks to increase. These ndings are in agreement with Sarkis (2001) that lead benchmarking and performance measures is likely to increase in importance as a business improvement approach across organisations of all sizes (to greater or lesser degree). 5. Conclusions and recommendations This aim of this paper was to explore the understanding and use of lead benchmarking and performance measurement as an emerging approach to business improvement. By dening benchmarking and developing a conceptual model, as shown in Figure 1, the idea of dimensions composed of indicators was a useful way of exploring the different aspects of the eld and enabled the respondent organisations to see the breadth and depth of this area of study (Sarkis, 2001). From the empirical results obtained regarding current use of benchmarking there is an indication that across all organisation sizes more focus is placed on operational issues than strategic issues. Firstly, it is suggested that these results show that lead benchmarking and performance measurement are an emergent and

Number of employees/organisation size 99 or less micro/small 100-499 medium 500 or more large Total (n 39) (n 47) (n 70) (n 156) Increase Frequency Percentage Percentage Decrease Frequency Percentage Percentage Same Frequency Percentage Percentage Total Frequency Percentage Percentage 24 22.0 80.0 2 100.0 6.7 4 12.9 13.3 30 21.1 100.0 12 38.7 27.3 44 31.0 100.0 15 48.4 22.1 68 47.9 100.0 32 29.4 72.7 53 48.6 77.9 109 100.0 76.8 2 100.0 1.4 31 100.0 21.8 142 100.0 100.0

Benchmarking and performance measurement 379

within group within overall within group within overall within group within overall within group within overall

Table IX. A cross tabulation of organisational size with expectations on the proportion of lead benchmarks used within their organisation in the future

indeed novel area of business improvement and have some way to go before being fully legitimised as a strategic initiative in many organisations. Secondly, there is an overarching tendency to identify business improvement initiatives in general as being focused primarily on improving operational efciency (Bessant and Caffyn, 1997). This tendency limits the effectiveness and sustainability of such initiatives (Leonard and McAdam, 2003). Thus, there is a challenge to those involved in lead benchmarking and performance measurement to stress the strategic effectiveness of such approaches. The location of lead benchmarking and performance measurement was clearly identied as being upstream in the organisation. Key dimensions included new product development and customers, thus supporting the conceptualisation in Figure 1. Moreover, upstream locations are more likely to be strategic. It can also be concluded that larger organisations are more likely to strategically implement and make effective use of lead benchmarking and performance measures in comparison to smaller organisations. It is suggested that the reasons for this effect may be twofold. Firstly, larger organisations have more resources and skills than smaller organisations in relation to experimenting with lead benchmarking and performance measures. Thus, larger organisations can more fully explore lead benchmarking and performance measurement without a large risk factor (McAdam, 2000). Secondly, and related to the rst point, small organisations traditionally lag behind larger organisations in implementing new initiatives due to the innate bias in the literature that suggests large private sector organisations try it rst and then public and small sector organisations come second (Kouzmin et al., 1999; Ghobadian and Gallear, 1997). In addition, as benchmarking is generally both expensive and time consuming: a rm (especially an SME) usually does not have enough resources to start a benchmarking project (Massa and Testa, 2004). However, there is no innate reason precluding smaller organisations from adopting lead benchmarking and performance measurement approaches to a

BIJ 15,4

degree within their resource and skills capabilities. The results on expected future use are consistent with the rest of the data and give cause for optimism that lead benchmarking and performance measurement is rmly on the future agendas of large and small organisations.
References Atkinson, H. and Brown, J.B. (2001), Rethinking performance measures: assessing progress in UK hotels, International Journal of Contemporary Hospitality Management, Vol. 13 No. 3, pp. 128-35. Babbie, E. (2001), The Practice of Social Research, 9th ed., Wadsworth, Belmont, CA. Bessant, J. and Caffyn, S. (1997), High-involvement innovation through continuous improvement, International Journal of Technology Management, Vol. 14 No. 1, pp. 14-22. Bond, T.C. (1999), The role of performance measurement in continuous improvement, International Journal of Productions and Operations, Vol. 19 No. 12, pp. 1318-34. Camp, R.C. (1989), Benchmarking The Search for Industry Best Practices that Lead to Superior Performance, ASQC Quality Press, Milwaukee, WI. Cassell, C., Nadin, S. and Older Gray, M. (2001), The use and effectiveness of benchmarking in SMEs, Benchmarking: An International Journal, Vol. 8 No. 3, pp. 212-22. Corrigan, J. (1998), Performance measurement: knowing the dynamics, Australian CPA, Vol. 68 No. 9, pp. 30-1. Davenport, T. and Prusak, L. (1998), Working Knowledge How Organisations Manage What They Know, Harvard Business School Press, Boston, MA. Deming, W.E. (1986), Out of the Crisis: Quality, Productivity and Competitive Position, Cambridge University Press, Cambridge. Easterby-Smith, M., Thorpe, R. and Lowe, A. (2002), Management Research: An Introduction, 2nd ed., Sage, London. Fernandez, P., McCarthy, I.P. and Rakotobe-Joel, T. (2001), An evolutionary approach to benchmarking, Benchmarking: An International Journal, Vol. 8 No. 4, pp. 281-305. Geanuracos, J. (1994), The global performance game, Crossborder, Winter. Ghobadian, A. and Gallear, D. (1997), TQM and organisation size, International Journal of Operations & Production Management, Vol. 17 No. 2, pp. 121-63. Heib, R. and Daneva, M. (1995), Benchmarks and Benchmarking: A Denitional Analysis, Institute for Information Systems, University of Sarlandes, Homburg. Kiesler, S. and Sproull, L.S. (1986), Response effects in the electronic survey, Public Opinion Quarterly, Vol. 50 No. 3, pp. 402-13. Kouzmin, A., Lofer, E., Klages, H. and Korac-Kakabadse, N. (1999), Benchmarking and performance measurement in public sectors towards learning for agency effectiveness, The International Journal of Public Sector Management, Vol. 12 No. 2, pp. 127-44. Leonard, D. and McAdam, R. (2003), An evaluative framework for TQM dynamics in organisations, International Journal of Operations & Production Management, Vol. 23 No. 6, pp. 652-77. Lockamy, A. (1998), Quality-focused performance measurement systems: a normative model, International Journal of Operations & Production Management, Vol. 18 No. 8, pp. 740-66. McAdam, R. (2000), Quality models in an SME context: a critical perspective using a grounded approach, International Journal of Quality & Reliability Management, Vol. 17 No. 3, pp. 305-23.

380

Manoochehri, G. (1999), Overcoming obstacles to developing effective performance measures, Workstudy, Vol. 48 No. 6, pp. 223-9. Massa, S. and Testa, S. (2004), Innovation or imitation? Benchmarking: a knowledge-management process to innovate services, Benchmarking: An International Journal, Vol. 11 No. 6, pp. 610-20. Neely, A. (1998), Measuring Business Performance, The Economist, London. Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating Company, Oxford University Press, New York, NY. Remenyi, D., Williams, B., Money, A. and Swartz, E. (1999), Research in Business and Management, Sage, London. Sarkis, J. (2001), Benchmarking for agility, Benchmarking: An International Journal, Vol. 8 No. 2, pp. 88-107. Senge, P.N. (1990), The leaders new work: building learning organisations, Sloan Management Review, Vol. 32 No. 1, pp. 7-23. Shaw, E. (1999), A guide to the qualitative research process: evidence from a small rm study, Qualitative Market Research: An International Journal, Vol. 2 No. 2, pp. 59-70. Tse, A.K.C., Tse, C.H., Yin, C.B., Ting, K.W., Yi, K.P.Y. and Hong, W.C. (1995), Comparing tow methods of sending out questionnaires: e-mail versus mail, Journal of the Market Research Society, Vol. 37 No. 4, pp. 441-5. Vaziri, H.K. (1992), Using competitive benchmarking to set goals, Quality Progress, Vol. 25 No. 10, pp. 81-5. Watson, G. (1993), Strategic Benchmarking: How to Rate Your Companys Performance Against the Worlds Best, Wiley, New York, NY. Welch, S. and Mann, R. (2001), The development of a benchmarking and performance improvement resource, Benchmarking: An International Journal, Vol. 8 No. 5, pp. 431-52. Yasin, M.M. (2002), The theory and practice of benchmarking: then and now, Benchmarking: An International Journal, Vol. 9 No. 3, pp. 217-43. Further reading Hammer, M. and Champy, J. (1993), Reengineering the Corporation A Manifesto for Business Revolution, Nicholas Brealey, London. Williamson, O.E. (1979), Transaction cost economics: the governance of contractual relations, Journal of Law & Economics, Vol. 22, pp. 233-61. Corresponding author Sandra Moffett can be contacted at: sm.moffett@ulster.ac.uk

Benchmarking and performance measurement 381

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints