I suspect at least one of the reasons is because people blindly copy a model. What worked in a particular location is dependent on a myriad of factors including culture, and the disposition of the various characters in the company. To succeed, other companies would probably need to study these companies, take their concept (not the whole model), and then modify according to their particular industry, location and local culture.

Institutionalists would argue that firms strive for legitimacy as a critical resource for survival.

Classic reading is:

Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2): 340-363.

A more detailed analysis why firms use benchmarking can be found in the following paper:

Walgenbach, P., & Hegele, C. 2001. What can an apple learn from an orange? Or: What do companies use benchmarking for? Organization, 8(1): 121-144.

A more entertaining, but well put answer can be found in Tom Peters presentation on youtube.

http://www.youtube.com/watch?v=8AGTpu_i8sc

I hope this helps.

Best

Markus

The resource-based view of the frim (RBV) suggests that the key to long-term success is to assemble a core competency that is valuable, rare, costly to imitate, and non-substitutable. The way to assemble such a core competency is by integrating a collection of competencies that, individually, might not be all of those things, but that combine in a gestalt, making a whole that is more than the sum of its parts.

When one company imitates another, it does not do a perfect imitation. Some things it can't imitate, some things it considers unimportant. Those tihngs it does imitate, possiblly at a mugh higher cost than the original, may not include all the capabilities and resources that give the original its power. Southwest is often used as an example of a company with a long-lasting core competency.

A few classic (and still relevant) cites on RBV (in order of publication, one paper per author; the fourth is a response to the third, which critiques RBV):

Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic management journal, 5(2), 171-180.

Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource‐based view. Strategic management journal, 14(3), 179-191.

Priem, R. L., & Butler, J. E. (2001). Is the resource-based “view” a useful perspective for strategic management research?. Academy of management review, 26(1), 22-40.

Barney, J. B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of management review, 26(1), 41-56.

Firstly, I would not consider both similar, because one is a service provider and the other is a manufacturing company. So, let's talk just about Southwest. For a company to obtain the skills of this company, its staff must have a strong entrepreneurial culture. Ie, in this case, the Southwest biggest asset is really its Human Resources (this is not just an empty slogan).

Otherwise, one can not ignore an interesting pioneering Southwest: it was the first airline in the world with low cost low fare's philosophy. This provided considerable comparative advantage, ie, a decade of front on competition and quite cheaply.

I really agree with Shun Fam

I agree with Shun Fam

I agree with Shun Fam but would stress the location factor as probably the most important. The culture is one issue but it seems very important to know from which background and circumstances come. If you take the regional living conditions surrounding some haevy industry manufacturing facilities ytou will find that people there are not used certain models of work organization which you find in highly developed countries, they require much less than other workers which makes them more willing to do any kind of work. Something similar is obvious in the case of big companies like Southwest there you can find a mentality which tells employees "take it or leave it - our reputation makes it easy to find replacement" - consequently people will adjust to the culture. Now in such constellations nice models can be developed and applied.

Functionally, mirroring is not creating! The corporate culture prodded to imitate is not the one that can self-lead for continuous improvements (such as in Kaizen). Can you see GM trying to emulate Toyota as it now stands? Six sigma culture takes a very long time to really pay off since it starts at the workbench... not at the corporate VP level as it has been announced by GM recently.

The reason for failures following benchmarking strategies lies within the benchmarking concept istself.

From looking onto a compay, we can extract the numbers the business produces. These numbers constitute the goals of the company benchmarking itself. Now, the company tries to reproduce the numbers, while it cannot reproduce the system that created these numbers.

Benchmarking apologists may say that they are looking beyond numbers, and that they really go into the details to find out what one company can learn form another, but you cannot derive the driving concepts of a company from the outside. This is just another try to destillate the "secrets of success" from looking into some successful companies. Most of what scientists or (more probable) managemnt gurus will get as results is what they firmly believed just before even looking, because in every company we will find a myriad of factors, and most of them will differ from one location to another, from one department to another, mostly even from one person to another. So, they generally tend to believe what the top managements belives to be the top reasons for their success, and I relly doubt that they usually even know. To really get something meaningful from analysis like this, benchmarking would be more expensive than experimenting for yourself.

Another reason why benchmarking will usually fail is the mindset of the people starting a benchmarking project. They will benchmark themselves to Southwest when they are looking for cost cutting ideas. But probably learning from Southwest would mean to first copy the things that don't have anything to do with cost, because they provide the basis for the cost structure.

Example: I do believe that most companies could easily save 10 to 20 percent of their cost if they started harvesting the endless flow of ideas people within their companies get while just doing their job, banging their heads as they face the problems company buereaucracy creates. But you cannot use these ideas just by deciding to do so. The first point would be to really value these ideas. And there's a myriad of changes coming necessarily from this point only, and if you don't follow many of them, so that your employees actually believe you (which they actually don't in most companies), your encouraging emails and bottom-down memos will actually just encourage cynism, which isn't a good starting point for whatever you try to achieve.

Benchmarking projects, like most projects, will start with a hunger for results that can be measured, and I really thik that most project starters neither have the power nor the determination to wade through the things that need to be changed, before there will be measurable results. They will usually produce some results quickly .. and while pursuing these minimal results, they will usually block the way to bigger results in the long run.

Southwest Airlines in the USA and Tata Steel Ltd in India; these are two organizations operating in two economically varying and culturally different environment. Despite the similarities of their success management stories,managers of Tata Steel Ltd may face challenges if workers of Southwest Airlines are transferred to work with them.

The solution is understanding the culture of a people and dealing with them them according to their cultural dispositions. A management style in the USA may not work in China due to cultural differences and social perceptions and so multicultural intelligence in management practice is necessary for successful expatriate management.

Benchmarking people management in Iran with respect to the USA is bound to fail due to attitudinal differences.

I agree with Clyde that when one company imitates another, it does not do a perfect imitation. Many things can't be imitated, such as culture.

In the case studies that I came across in my Master's program, it seemed that both of these companies consciously created and embedded a culture of respect for employees and stakeholders that have been reflected in their operating policies and communicated throughout their organization by the deeds and actions of their leaders. This is rare for most corporations for, although many organizations create glowing mission and vision statements, many do not actually live up to the ideals behind those statements. These are expressed through the leaders' integrity and trustworthiness, through their balanced commitment to their stakeholders, and through effective communication of the organization's values throughout the organization. They also seem to place high value of accountability and fairness.

Success stories of companies and the model followed by them are basically inspirational with motivations to improve, innovate, and bring in desirable changes in the way companies are run. As is opined by the experts above copying or emulating a given successful model of a company is neither possible nor is wise. Principles, policies and philosophies that are people and work friendly have to be drawn and sought-like involvement and participation of employees in setting company's goals and establishing team leadership with responsibility and accountability and inculcating a sense of ownership among the employees.

Sharing fruits of labor and pride is the priceless reward a company earns.

Best practices can be followed by small companies from larger companies. But, there are many factors i.e. organisational culture, types of business, top management support, emploee collaboration, etc. should be considered for the success of benchmarking

I think, it's all about values and culture.

Four hypotheses:

Otherwise TESCO would have started to copy the strategies of German grocery corporations such as REWE or EDEKA (in order to challenge the ALDI / LIDL menace) for a long time.

There are number of companies like GE,SWA,TD Industries etc whose HR practices have been successful.But please note that the practices among these organizations vary to a large extent.Jack Lowe of TD Industries, gave lots of importance for training & development but  did not give much importanvce for measuring the impact whereas GE has a metric for everything. The lesson to be  learned is that a company has to evolve its own HR practices depending on the context in which it operates.And, changes with people , do not happen in a short time and hence one will have to be very patient in keeping the momentum of changes without getting disheartened with lack of encouraging outcomes immediately."Changing People" is a difficult process than "Changing Persons." 

The reality of life is that "success" is attractive and people frown towards failure. The attractiveness of success make many people forget about who they are and wish to be someone else which leads to many failures.

The same principle is extended to organizations where less successful organizations assume being in the shoes of the successful organization will make them successful. Sad to say that perfect imitation is no guarantee to being successful, the answer lies in each and every organization discovering their unique place in the global market and developing their unique culture to best serve humanity. 

It is important to understand that just as every human being is unique so is every organization unique and different from any other. Uniqueness therefore do not imitate (carry the whole) but may learn from another to make adjustment to satisfy the impending needs of society.