One way to judge the performance of a company is to compare it with other companies. This technique, commonly called...
GMAT Critical Reasoning : (CR) Questions
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:
Passage Analysis:
| Text from Passage | Analysis |
| One way to judge the performance of a company is to compare it with other companies. |
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| 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. |
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Argument Flow:
The passage starts with a general concept (comparing companies to judge performance) and then gets more specific by defining this as benchmarking and explaining what managers can gain from it.
Main Conclusion:
There isn't really a main conclusion here - this passage is more of a setup that defines benchmarking and explains its basic benefits.
Logical Structure:
This is descriptive rather than argumentative. The author presents benchmarking as a useful technique and lists its advantages, but doesn't make a strong claim that needs evidence to support it.
Prethinking:
Question type:
EXCEPT Question - This is asking us to find the answer choice that is NOT a valid reason for benchmarking against non-competitors rather than competitors
Precision of Claims
The passage makes quality claims about benchmarking's benefits - it helps discover better practices and justifies adopting good practices
Strategy
For EXCEPT questions, we skip the prethinking process because we need to evaluate each answer choice individually to find the one that doesn't fit the pattern. The question asks for reasons to benchmark against non-competitors rather than competitors, so four answer choices will provide valid reasons for this approach, while one will either be invalid or actually support benchmarking against competitors instead
Comparisons with competitors are most likely to focus on practices that the manager making the comparisons already employs
This provides a valid reason for benchmarking against non-competitors. If we only compare with competitors, we might just focus on practices we already use, which wouldn't help us discover new approaches. Benchmarking against non-competitors would expose us to different practices we haven't considered, making this a good reason to look outside our competitive circle.
Getting "inside" information about the unique practices of competitors is particularly difficult
This gives us a practical reason to benchmark against non-competitors. Competitors are naturally secretive about their unique practices since sharing this information could hurt their competitive advantage. Non-competitors would be more willing to share their methods since we don't directly threaten their market position. This makes benchmarking against non-competitors more feasible.
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
This offers a strategic reason for choosing non-competitors. If competitors have similar efficiency levels, comparing with them won't reveal practices that could give us a competitive edge. Non-competitors might have superior practices that, when adapted to our industry, could help us outperform our actual competitors. This is a solid reason to look beyond our competitive landscape.
Managers are generally more receptive to new ideas that they find outside their own industry
This addresses the psychological aspect of learning. Managers might be more open-minded about ideas from different industries because they don't feel threatened or defensive. Ideas from competitors might be dismissed due to ego or rivalry, while ideas from other industries feel fresh and innovative. This makes benchmarking against non-competitors more effective from a human behavior perspective.
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 is NOT a valid reason for benchmarking against non-competitors. This statement suggests that successful companies succeed by using practices tailored to their specific market circumstances. If success comes from practices that fit special circumstances of particular products or markets, then the most relevant comparisons would be with companies facing similar circumstances - which would be competitors in the same market. Non-competitors would have different special circumstances, making their practices less applicable. This actually argues for benchmarking against competitors, not non-competitors.