What is inter firm comparison with Example?
Inter Firm Comparison – Introduction. In a competitive situation, it is mandatory to have a comparison with the other similar organisation for finding out sales, profits and other matters. When the profit of one organisation is compared with the profit of another organisation, it is known as inter-firm comparison.
Which technique used in inter firm comparison?
Inter-firm comparison technique is a method of self-analysis of the business by the businessmen themselves. The management of the business on the basis of results obtained from the self-analysis is bound to react and look around for means to improve its performance or increase productivity.
How do you compare intra firms?
Intra-firm comparison means comparison among different units/products/strategic business unit (SBU) of a firm. and SBUs. Intra firm comparison helps the management in identifying the units/Strategic SBUs which have not been performing as per the internal benchmark or standards achieved by other units SBUs.
What is the difference between inter and intra firm comparison?
It means comparing the two or more than two similar types of business units. Intra firm : It is actually about the comparing of two more than two department of the same firm or the business unit.
What is inter firm?
: occurring between or involving two or more firms interfirm transactions … other research found that Silicon Valley has an unusually high level of inter-firm mobility for workers— Tim Fernholz.
What is the purpose of inter firm comparison?
The main purpose of IFC is improvement of efficiency by showing the management of participating firm its present achievements and possible weaknesses. These firms have to contribute their data to the central body which acts as a neutral body.
What are the advantages of inter firm comparison?
Benefits or Advantages of Inter Firm or Intra Firm comparison
- The management can pay special attention on the weakness area of business to take suitable action.
- Uniform information is available to all participating companies of inter firm comparison.
What is inter firm comparison in accounting?
Inter-firm comparison can be defined as the technique of evaluating the relative performance, efficiency, costs and profits of firms in a given industry’. The meaning of IFC can be easily explained by considering the main object of the system.
What is inter comparison?
: to compare (members of a specified group or their qualities) with one another intercompared the two sets of data.
What are inter firm relations?
The authors define inter-firm relationships as a broad range of relationships including strategic alliances, joint ventures, and mergers and acquisitions (M&A) or other equity-based relationships in this paper.
What are the limitations of inter firm comparison?
Limitations of inter-firm comparison :
- Top management feels that secrecy will be lost.
- Middle management is usually not convinced with the utility of such a comparison.
- In the absence of a suitable Cost Accounting System, the figures supplied may not be reliable for the purpose of comparison.
What is inter-firm?
What is the purpose of inter firm comparisons?
Inter-firm comparisons is a technique of evaluation of performance, efficiency, costs, profits etc. of firms producing same type of products. It consists of voluntary exchange of information/data concerning costs, prices, profits, productivity, efficiency among the concerns engaged in same industry.
Do you have to have uniform costing system for inter firm comparison?
So, needless to mention that in order to make an inter-firm comparison there must be a uniform costing system.
Why is intra firm comparison important in SBus?
This comparison is possible only when uniform costing methods and practices are being adopted by all units and SBUs. Intra firm comparison helps the management in identifying the units/Strategic SBUs which have not been performing as per the internal benchmark or standards achieved by other units SBUs.
When is one firm compared to another firm?
The method by which one firm is compared with other firms particularly when technology, product characteristics, production method and general operating conditions are same in the same industry, the same is known as inter-firm comparison.