Analysing Benchmarks for Effective Risk Management

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Analysing Benchmarks for Effective Risk Management
As discussed in Chapter 3, benchmarking is crucial in risk management (Youngberg & JD, 2011). Benchmarking entails contrasting one organization's methods, workflow, and output indicators with other, more successful businesses (Graf et al., 2021). However, how does this approach benefit risk managers? Comprehension of the benchmarks clarifies industry norms. Additionally, risk managers can spot potential pitfalls by comparing internal data with outside standards. If a hospital's claims related to medication errors significantly surpass the benchmark, it suggests that internal processes require revision. Thus, early detection is essential in risk management because it allows for prompt interventions. Early detection of issues allows for more efficient resolution.
Conversely, benchmarking involves understanding successes and vulnerable areas (Cowls et al., 2021). Identifying areas of superior performance within an organisation can inform strategic approaches in less efficient sectors. Therefore, benchmarking is a diagnostic tool and a strategic planning compass. Thus, the question of whether benchmarking can reduce risk ...