How do standards differ from grades in a business context?

In a business context, the distinction between standards and grades is crucial for understanding how organizations assess quality and performance. Standards serve as established benchmarks that define the required criteria for quality and performance in various processes or outcomes. They set the expectations for what is considered acceptable or excellent in a product, service, or practice within the industry.

Grades, on the other hand, are the evaluations or ratings that reflect the degree to which those established standards have been achieved or met. When a business grades its performance or output, it is measuring itself against the predefined standards. This grading signifies how effectively the organization meets or exceeds the quality norms set forth by those standards.

For example, a company may have a standard for customer service response times. The grade could represent how well the company performed against that specific standard. Therefore, the option correctly emphasizes that standards provide the necessary criteria and benchmarks while grades assess the level of accomplishment in meeting those criteria.