During the last some decades, we have seen tremendous improvement in the areas of board philosophies, approaches and techniques. rising competition as well as changing markets has intensified the search for the top practices that is lead business organizations to adopt different tools as benchmarking, performance management, just-in-time, total quality management, as well as process re engineering.
Benchmarking is consider one of the most effective continuous improvement tools of transferring knowledge as well as innovation into organizations. It is evident from a survey among Fortune 1,000 companies, where 65 percent of the organizations use benchmarking as management tool to gain competitive advantage. In a similar survey in France, it has been estimated that 50 percent of the 1,000 companies use benchmarking regularly as well as 80 percent of them regard it as an effective approach of change. Jarrar as well as Zairi have conducted a survey of about 227 organizations in 32 different countries as well as concluded that benchmarking concepts can be adopted across companies irrespective of their locations, size or industry, for example, in the sectors as manufacturing, health services, insurance, economic services, construction, banking, government, etc.
With these sectors, financial services, mainly banking has witnessed a significant modify since the early 1990s. For example, with intense struggle from both domestic as well as international players, rapid innovation as well as introduction of new financial instruments, changing consumer demand and explosive growth in information technology, the way in which a commercial bank conducts business as well as reaches out its customers has significantly changed. In order to survive as well as adapt to the changing environment, process of delivering quality service to its customers as well as performance benchmarking. Arnott and Poulson (1997), Whymark (1998), Holloway et al. (1999) as well as Hinton et al. (2000) have witnessed the penetration of best practice benchmarking in financial services as well as the role of technological innovations in that process.
Purpose
The reason of this paper is to increase a benchmark form for banking firms to improve the quality of services. For a focused understanding, function letter of credit (L/C) has been considered to develop the model. Therefore, it focuses less on the specific results found per Se but rather on some of the practical issues encountered when attempting to benchmark the L/C operation of a bank.
Benchmarking Meaning
Meanings of benchmarking vary as well as are still evolving. There are 49 definitions of benchmarking available in the literature. Maire et al. (2005) have identified that these definitions were proposed in the various stages of the evolution of benchmarking. During that period, some of the noted definitions were given by Bemowski (1991), Vaziri (1992), International Benchmarking Clearing House Design Committee (Lema as well as Price, 1995), Epper (1999), American Productivity & Quality Centre (1993), Dervitsiotis (2000), Freytag as well as Hollensen (2001), Sarkis (2001), Maire (2002), etc. to name a few. One of the most commonly quoted definitions of benchmarking is provided by Camp (1989) “benchmarking is the search for the best industry practices which will lead to exceptional performance through the completion of these best practices.”
A recent meaning has been provided by Kumar et al. (2006) which states that it is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help an organization improve its performance. It is an activity that looks outward to find best practice as well as high performance as well as then measures actual business operations against those goals.
Analyzing various definitions, Anand as well as Kodali (2008) define benchmarking as: a continuous analysis of strategies, functions, processes, products or services, performances, etc. compared within or between best-in-class organizations by obtaining information through appropriate data collection method, with the intention of assessing an organization’s current and thereby carry out self-improvement by implementing changes to scale or exceed those standards.
Finish
The benchmarking model discussed in this paper is designed for banking firms. A variation in design or difference in use of tools is possible depending on the benchmark team’s preferences. Banking firms may take the opportunity to improve service quality by implementing benchmarking. Today, benchmarking has become a widely practiced as well as generally accepted quality approach. As this management tool continues to evolve, innovative adaptations as well as extensions of the original intent, scopes, as well as methodology continue to appear in the literature. This is not surprising, as managers in competitive, dynamic operating environments tend to seek new ways in which to enhance operational efficiency as well as strategic effectiveness. Moreover, the growth in international awareness as well as application of benchmarking has been “boosted” by the increase in prestigious quality awards. In quest of getting global, Bangladeshi banking firms may adopt quality improvement tool as benchmarking.
