Question

how is harmonisation different from standardisation?
please give answer of this question

Answer 1

Standardization refers to the process of creating of a set of uniform business practices and processes across different locations or departments. It focuses to reduce the risk of failure. Standardization would lead to processes that would consistently meet the entity's cost and performance objectives using well- defined business practices. Harmonization refers to the activity of framing and implementing a set of business process standards or even benchmarks across different locations or units, in order to attain target business benefits, while ensuring harmonious acceptance of newly introduced set of processes by various stakeholders like employees etc. There are various differences between Standardization and Harmonization. One of the major differences lies in the degree of strictness of the Accounting Standards. Harmonization aims to reduce variances from accounting, whereas Standardization aims to remove any sort of variance. Standardization is meant in a broader sense where local standards are also covered. Local standards also contribute themselves as a result of standardization efforts. Another difference is that Standardization aims to achieve uniformity of processes across the value chain in different regions. However, Harmonization aims to align similar activities based on a single and precise business objective.