Balance Scorecard: Features, Differences from Traditional Performance Measurement, and Suitability for Tesco Plc

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Balance Scorecard

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Contents
Introduction......................................................................................................................................3
Discussion on the Tesco Plc............................................................................................................3
Balance Scorecard and its main features.........................................................................................4
Discussion on how the balance scorecard is different from the traditional performance
measurement....................................................................................................................................7
Discussion on whether balance scorecard can be applied in Tesco Plc or not................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
In the recent time it has been found that Balance Scorecard has gain considerable
attention among the organization due to special features of the balance scorecard that no other
technique have. Balance scorecard (BSC) has some features similar to the management
technique known as MBO (Management by Objective). The purpose of both the techniques is to
help the organization in the providing the base that align the activities of the organization with
the objectives of the organization. The main difference that these techniques have is that BSC is
more systematic as compare to the MBO. The balance scorecard is more systematic that links the
organization strategic objectives in more meaningful way with its activities. Despite of numerous
advantages of the balance scorecard there have some limitations that force the organization to
implement the balance scorecard at limited stage. It can be said that there are many difference
between the traditional financial performance metrics and balance scorecard. As traditional
financial performance metrics provides only the information about the past performance of the
organization and does not include any future plan for the financial performance and
implementing & controlling the firm’s strategic plan. Managers are keen to know about the
management perspective about the strategic plan that needs to be followed for the future period.
This information is successfully provided by the balance scorecard. In this regard, balance
scorecard has been defined management system that maps all the strategic management
objectives into four perspectives of performance metrics. These four perspectives are financial,
internal processes, customer perspectives and learning & growth. The main purpose of these
perspectives is to provide the management with relevant feedback on how well the strategic plan
has been executing so that necessary changes can be made (Smith, 2010).

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As the consultant in the management consultancy firm, the purpose is to define balance
scorecard and know its suitability in the Tesco Plc. Tesco Plc is most famous British retail
company and it is listed on the London Stock Exchange. In this report it has been evaluated
about the balance scorecard and its various features. There will be detailed discussion on the
difference between the balance scorecard and traditional performance measurement systems. At
the end there will discussion on the whether the balance scorecard is suitable for Tesco Plc or
not. Initially a brief description about the Tesco Plc has been provided to understand the main
activities performed by the management.
Discussion on the Tesco Plc
Tesco has been founded by the Jack Cohen in early 1919 from the small store to the giant
retailer in the whole of the United States and Ireland. In year 1947, Tesco has started to be
floated on the London stock exchange and currently become the number one retailer company in
whole of United Kingdom. As it was said that Tesco is the UK’s main food retailer in the highly
completive market that makes management to expand the business in Europe and Ireland. Tesco
has purchased Quinnsworth, Crazy Prices and Stewart’s stores in order to expand its business in
the Ireland. The strategic planning of the Tesco has been known as balance scorecard by many of
the people but management of Tesco has given it a name known as Steering Wheel. The business
tool has helped the management to align all the strategies with the core business objectives. In
balance scorecard there are four main perspectives while in steering wheel there are five
perspectives. The added perspective to the steering wheel is known as Community (Tesco:
History, 2018).