Introduction
Traditionally, agencies measured the firm’s performance by focusing on the external and internal processes, evaluating allotted factors such as full-time equivalents, analyzing the budget size, and the number of programs that they control. The private sector enterprises, on the other hand, focused on financial measures of their market shares, bottom-line, earnings-per-share, and return-on-investment. Alone, none of the directives provided a vivid perspective of the business’ performance that the managers required. But through the balanced scorecard approach, the company can examine their economic standings and results to provide the leaders with a complete image of how to make relevant improvements. This essay assesses the implementation of a balanced scorecard approach in Wal-Mart. It also evaluates the use of other models like the BAA structure and other traditional methods.
Analysis
As firms implement different entrepreneurial innovations, managers sometimes become too enthusiastic about the latest developments that may prove detrimental to the business. For instance, while focusing on improving the quality of their items, the companies lose sight of benefits and cost considerations. Similarly, in the reduction of inventory levels through the just-in-time procedure, corporations have lost sales due to shortages. A balanced scorecard model is a measurement-performance approach that utilizes non-financial and financial techniques to analyze all the aspects of a firm’s functions through an integrated fashion. The use of the structure is widespread throughout respected enterprises such as Wal-Mart that extends its utilization in evaluating its suppliers. The company recently won an award for maintaining exceptional scorecard outcomes (Biazzo and Garengo, 2012).
The balanced scorecard model has been the most widely utilized in quality management and strategic planning in industries. It applications have broadened to cater for customized project requirements. Other approaches used include the BAA as well as different traditional structures such as the T5. The BAA model is mostly adopted in risk management systems to control the mishappenings that may arise from the execution of a program. The T5 system measures the outcomes of the planned and actual events. It influences the knowledge, attitudes, and behaviors of all the individuals working on a project such that they conduct themselves in a uniform manner to produce the desired quality. The balanced scorecard approach covers all the areas found in the BAA and traditional approaches to providing holistic results in risk and quality management (Niven, 2014).
According to Biazzo and Garengo (2012), the BAA Model requires a plan to be delivered precisely given the risks articulated in a project. The nature of the program necessitates a vigorous performance evaluation tool for successful realization. The BSCs are utilized in firms where the objectives are shared intrinsically. However, the T5 system can incorporate diverse groups such as external suppliers and contractors. Such an initiative can lead to conflicts since the internal processes of a firm look different to the external teams. Hence, steps need to be taken in a T5 system to maintain uniformity in interpreting and comprehending the objectives and goals of the program. The T5 approach also requires that the company highlights the best practices with quality performance indicators and conformance reports that ensure the surveillance of the outcomes and accurate measurements.
Everyone in the U.S knows that Wal-Mart is the place to get fundamental products at the best prices. However, such a business strategy can inhibit growth and the shareholders’ expectations. The balance scorecards address growth and learning in the firm. The staff is developed and trained on new work processes and technologies that can improve and enhance the performance of Wal-Mart. The strategy connects with internal objectives of the enterprise to produce at low costs at a higher pace translating into fewer expenses for customers. The balanced scorecard assists the business in management and strategic planning to align their activities with the initiative and vision of the corporation. The model originated from David Norton and Robert Kaplan as a measurement framework that added non-financial aspects in strategic management to the traditional economic metrics to give a more balanced outlook of the firm (Niven, 2014).
While the BSC approach was coined in the 90s, it is a derivation from the traditional models such as the General Electric performance measurement in 1950 and the French engineering procedure. The Engineers instituted a dashboard that examined outcomes in the 20th century. The BSC has evolved from its simple structure to a complete management system that transforms the passive strategic plan of an organization to marching orders on a daily basis. It assists planners to identify what should be done and the executives to fulfill their goals. At the same time, it maintains the traditional economic measures to provide long-term capabilities and crucial customer relationships (Biazzo and Garengo, 2012).
Conclusion
Managers who adopt the BSC approach evaluate information using four essential perspectives. They include the internal enterprise, financial standings, learning and innovation, and the customer’s opinion. It acts as a multidimensional recipe for boosting the business’ performance. It application in Wal-Mart has already proven its usefulness in maintaining the culture of the firm which is to provide affordable goods to its customers without limiting its growth and the interests of stakeholders. The managers have to ensure that the four aspects are congruent for them to work together to accomplish the goals of the enterprise because the future of the firm depends on their applicability.
References
Biazzo S. and Garengo P. (2012). Performance Measurement with the Balanced Scorecard: A Practical Approach. London: Springer & Science Business Media.
Niven P. R. (2014). Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution, New York: Wiley.
