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Benchmarking Corporate Headquarters: Instrumental, but not Strategic?
Journal
Long range planning : LRP
ISSN
0024-6301
ISSN-Digital
1873-1872
Type
journal article
Date Issued
2017-02
Author(s)
Abstract
Benchmarking is a widely applied management practice, but it is controversial from a strategy viewpoint. In business terms, “benchmarking” refers to the process of comparing one firm's practices or performance to best practices from other companies.1 In his article entitled “Benchmarking Corporate Headquarters”, David Young (1998) applies this general idea to the corporate headquarters (CHQ), which is the central organizational entity in large and diversified firms (cf. Menz et al., 2015). Whereas Young largely focuses on the potential merits of CHQ benchmarking, the purpose of this commentary is to draw attention to its potential perils.
It is useful to first briefly revisit Young's main assertions: The article is motived by two observations. One observation is that many firms are dissatisfied with their CHQ performance (Young, 1993, Young and Goold, 1993, Young et al., 2000). A second observation is that firms often struggle to challenge the CHQ's status quo owing to its highly political nature (also see Ferlie and Pettigrew, 1996). Based on these observations the article's main objective is to suggest a rather objective way for practicing managers to assess the design and performance of their CHQ. The author argues that a comparison of the firm's own CHQ activities and performance metrics with corresponding metrics for industry leaders or other corporations can be useful for improving performance and for triggering discussions about the corporation's parenting strategy.
It is useful to first briefly revisit Young's main assertions: The article is motived by two observations. One observation is that many firms are dissatisfied with their CHQ performance (Young, 1993, Young and Goold, 1993, Young et al., 2000). A second observation is that firms often struggle to challenge the CHQ's status quo owing to its highly political nature (also see Ferlie and Pettigrew, 1996). Based on these observations the article's main objective is to suggest a rather objective way for practicing managers to assess the design and performance of their CHQ. The author argues that a comparison of the firm's own CHQ activities and performance metrics with corresponding metrics for industry leaders or other corporations can be useful for improving performance and for triggering discussions about the corporation's parenting strategy.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Responsible Corporate Competitiveness (RoCC)
Refereed
Yes
Publisher
Elsevier
Publisher place
Oxford
Volume
50
Number
1
Start page
30
End page
32
Pages
3
Subject(s)
Division(s)
Eprints ID
252741