Principles of Management CLEP Practice Exam 2026 - Free Management Practice Questions and Study Guide

Benchmarking is a systematic process that businesses use to evaluate and compare their current practices, processes, and performance against the best practices from other organizations or within the industry. The primary goal of benchmarking is continuous improvement. By identifying gaps in performance and understanding how other organizations achieve their results, companies can implement changes leading to enhanced efficiency and effectiveness in their own operations.

This process typically involves several steps, such as identifying the areas to benchmark, selecting the best-in-class organizations to compare against, gathering data on their practices, and analyzing the information to derive insights that inform their own processes.

Other choices, such as evaluating employee performance, assessing customer satisfaction, or analyzing financial results, while important aspects of management and organizational performance, do not encapsulate the core purpose of benchmarking, which focuses on the comparative analysis to drive improvements.