A mutual fund could set a benchmark as a target for the performance. For such a fund, one that is 100% focused on the stock-market, the benchmark could be a stock-market index, like the Dow Jones. For individual portfolios that carry more than stocks only but include currencies and bonds, it is more difficult to define an appropriate benchmark.

And that is exactly the problem with benchmarking as a performance management instrument in organisations. How are you to measure a performance if every company is unique and wants to deviate from the standard?

And that is exactly the problem with organisations. How are you to measure a performance if every company is unique? Benchmarking is done to compare activities with the objective to improve these. So how do we translate the financial adagio,