University Report: Balanced Scorecard for Retail Pharmacy

This report provides a comprehensive analysis of the Balanced Scorecard (BSC) as a performance measurement system and strategic tool for achieving long-term competitive advantage, particularly within the context of retail community pharmacies. The report explores the evolution and history of the BSC, examining its application in monitoring the transformation of organizational capital. It delves into the four key perspectives of the BSC: customer, learning and growth, internal processes, and financial, illustrating how each contributes to strategic goals. The report reviews existing literature to assess the BSC's suitability as a performance management system, correlating qualitative and quantitative data to predict future outcomes. It discusses the importance of aligning incentives, fostering innovation, and adapting to dynamic environments. The report also highlights the historical context of performance measurement, from financial accounting to the development of multi-dimensional frameworks and the integration of concepts like the triple bottom line. The study concludes by emphasizing the BSC's role in enhancing business transformation and sustaining competitive advantage within the retail sector. The report is a student contribution to Desklib, a platform providing AI-driven study tools for students.

Running head: BALANCED SCORECARD
Balanced Scorecard
University Name
Student Name
Authors’ Note

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Executive Summary
Business concerns these days replicate dynamic intricate system and their behaviour cannot
be assessed effectually by means of a reductionist view regarding the same. Competitive
advantage can necessarily be considered as the capability to make the most of various
opportunities that take place both inside as well as outside business concerns and adapt to
satisfy the opportunities. In essence, it is alignment of external as well as internal
environment of business concerns that necessarily generate as well as sustain competitive
advantage. Fundamentally, the utilization of balance scorecard (BSC) as a performance
dimension as well as a strategic tool, contributes to survival of business concerns and success.
In essence, the adoption of BSC contributes towards specific kind of behaviour that is elicited
by means of usage of positive feedback. Basically, acceptable actions can be reinforced by
means of fitting culture (that is to say, norms as well as values) as well as rewards relatable to
the performance. Since the pace of transformation is enhancing, there is persistent demand
for both creativity as well as innovation. Again, agile and at the same time flexible BSC can
act as a strange attractor in particularly agent’s behaviour of the system, functioning in a
tumultuous and dynamic environment. Also, feedback with information is circulated
throughout the entire system, upgrading knowledge and finally enhancing performance in the
course of learning. Business concerns that are able to gain knowledge from business
environment and alter their internal arrangement can survive and time flourish through
alteration, which is considerably affected by strange attractors. Essentially, chaos theory can
aid in comprehending and enhancing the process of transformation through utilization of
balance scorecard.

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Topic: Using the Balanced Scorecard to Monitor the Transformation of Organisational
Capital, to Sustain Long Term Competitive Advantage in Retail Community Pharmacy in
Malta
Introduction
The current study elucidates illustratively the system of performance measurement that can
be used as a base to oversee the transformation of organizational capital in a bid to sustain
competitive advantage during the long term. For this, the current study embarks upon the
notion of balanced scorecard and elucidates illustratively about evolution and detailed history
of balanced scorecard. Furthermore, this study undertakes analysis of subsisting literature
presented by different scholars on the subject matter under deliberation. This segment
therefore systematically reviews past literature to examine whether BSC can be considered to
be an ideal performance management system for Retail community pharmacy. The study also
culminates with a detailed discussion on the establishment of whether a correlation exists
between the two sets of results (qualitative and quantitative data), that is to say, whether
literature on past events are indicative of future outcomes. Also, the study presents certain
uncommonly agreed upon perspectives that can qualify for inclusion in the balanced
scorecard for addition of value.
Defining Balance Scorecard
The balance scorecard is referred to as a mechanism of performance measurement system
that acts as an attractor tool contributing to enhancement of transformation procedure and
finally to competitive advantage of the corporation (Singh et al. 2018). Fundamentally,
balance scorecard can be utilized by top managers to assist in the process of formulation of

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strategy of the corporation and ways to measure level of performance (Hakkak and Ghodsi
2015). There are different perspectives that can be broadly categorised as learning and growth
perspective, capabilities of the employees, information system as well as capabilities of the
organization.
Four Different Perspectives of the Balanced Scorecard
As rightly indicated by Singh et al. (2018), long term objectives can be illustrated as the
outcome of the firm intending to attain over a specified time period. Chiarini (2016) says that
managers can be able to scope their own target in four different perspectives. This includes
enhancement of revenue from stretched amount of sales to subsisting customers, presentation
of solutions to different targeted clients, enhancement of excellence implementation in a bid
to satisfy demands of the customers by means of continuous enhancements. Also, this also
includes alignment of incentives as well as rewards with the business strategy. Chiarini
(2016) suggests that grand strategy can be referred to as a grand strategy that is necessarily a
comprehensive tactic guiding diverse major activities formulated to achieve long term
objectives.
-Perspective of customer: Long term outlook implies offering complete solutions to targeted
customers. Nonetheless, employees have the need to realize the position they intend to arrive
at. There are numerous business entities that have a corporate mission to concentrate on
specifically customers (Mehralian et al. 2017). Hence, performance of a business entity from
the perspective of the customers has now become a priority for firm’s management.
Distinctly, in case if business units intend to attain long term superior financial performance,
then they have the need to generate and deliver better financial performance. There is also
need to generate as well as deliver products/services that are necessarily valued by clients.
Wu and Liao (2014) suggests that the customer perspective can help business concerns to

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align customer outcome dimensions that include share of the market, acquisition as well as
retention of customers, satisfaction of the customers, profitability of customers, targeted set
of customers as well as specific market fragments. Essentially, this also aids in recognition
and at the same time measurement, explicitly, specific value propositions that they distribute
to different target customers along with market segments (Malagueño et al. 2017). In itself,
value proposition replicates different drivers together with the lead indicators for customer
outcome dimensions.
-Learning and growth: The perspective of learning as well as growth can align incentives
along with rewards of the employees with the stratagem. This dimension of the balance
scorecard effectively helps in augmentation of three different groups in a business concern. In
particular, human resources that concentrates on development strategies can help in attracting
as well as retaining talents. Again, learning and growth dimension also affects the group
namely, information technology (Dudin and Frolova 2015). In particular information
technology also delivers applications that upholds strategy, develops data of customers along
with information system. In addition to this, the perspective of organizational culture also
enhances culture of the organization and alignment also generates a customer-centric culture,
align objectives of the employees to accomplishment, sharing knowledge regarding best
exercises and customers.
-Perspective of internal processes: At a time when a corporation can distinctly shape
objectives regarding what they intend to deliver can help in determining strategies.
Essentially, internal procedures can be regarded as the core factor of attainment. Perkins et al.
(2014) suggest that managers have the need to define a all-inclusive internal process that
starts with innovation functions (recognizing existing as well as future needs of the customers
and thereafter designing a new solution to satisfy the identified requirements). The internal
process continues by means of operational processes (that includes delivering subsisting

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products as well as services to clients) (Zhijun et al. 2014). Finally, the internal process ends
with deliverance of after services. Perkins et al. (2014) suggests that the entire process of
acquiring objectives as well as dimensions for particularly internal business procedures
perspective reflects on the differences between the balanced scorecard and conventional
system of performance measurement. However, system of performance measurement
concentrates on controlling as well as enhancing different existent responsibility centres as
well as departments (Sands et al. 2016).
Figure: Core Measures of Customer Perspective
(Source: Teklehaimanot et al. 2016)

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Financial Perspective
As rightly indicated by Teklehaimanot et al. (2016), balanced scorecard is said to keep hold
of financial perspective as financial dimensions can be considered to be important in
summarizing different measureable economic upshots of activities already undertaken.
Fundamentally, financial performance dimensions replicate whether the strategy of the
company, process of implementation along with execution can contribute towards
augmentation of bottom line. Common financial goals relatable to firm’s profitability are
enumerated by operating earnings, return earned on employed capital or else economic value
added (Alolah et al. 2014).
In itself, there are three recognized stages of life cycle of business, namely, growth, sustain
and thereafter harvest. Growth phase refers to the early stage of the business lifecycle during
which products/services of the company has considerable growth potential (Agrawal et al.
2016). However, corporations operating at the sustain stage can attract huge investment as
well as reinvestment, however have the need to receive adequate returns on firm’s invested
capital. In essence, these businesses are probable to maintain their subsisting share of the
market and develop their business (Perramon et al. 2016). Thereafter, at the time when
business entities reach maturity phase of business life cycle, the entity harvests the
investments undertaken in the prior two stages. The main objective of this phase is to
optimize flow of cash to the business concern.

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Figure: Balanced Scorecard Framework
(Source: Busco and Quattrone 2015)
History
Historically, business concerns monitored performance founded primarily on principles of
financial accounting. As suggested by Martello et al. (2016), records of bookkeeping on
financial dealings can be observed thousands of years back at the time when these schemes
were used by Egyptians, Phoenicians as well as Sumerians to aid commercial transactions.
However, after a few centuries, particularly during the time of exploration, actions of
worldwide trading corporations were measured and witnessed using double entry system of
accounting. Thereafter, with advent of the industrial revolution during the 19th century,

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evaluation of financial performance using innovative methods began. During the period
1970s-80s a common expression of dissatisfaction with the conventional financial dimensions
became widespread (Zizlavsky 2014). However, during the period of 1980s and the period of
early 1990s, this dissatisfaction directed to a series of multi-dimensional performance
measurement structures.
In essence, the conceptual foundation for specifically balanced scorecard was designed
during the period 1980s-1990s by numerous academicians as well as practitioners in diverse
fields namely management accounting, performance enumeration plus accounting. During the
period 1990s, the Tableau de Board was developed by a French academician (Coe and Letza
2014). This was a performance measurement mechanism by engineers that associated
stratagems to both financial as well as non-financial dimensions. Regrettably, Tableau de
Board was certainly not brought into practice. During the period 1920s DuPont Corporation
developed the performance measurement system that concentrated on return on investment
calculations that again directed to the use of numerous financial ratios (Lawrie and Sulver
2015). Thereafter, period of Post-World War II actions shifted the concentration on
initiatives on quality as well as measurement of quality that again led to upshot that were not
exclusively financial. Hansen and Schaltegger (2016) correctly mentioned that Activity
Based Costing can be considered as the unique thought that directed towards development of
the framework of Balanced Scorecard. Bergeron (2017) mentions that activity based costing
is an accounting process of assigning costs of resources by means of diverse activities
undertaken to design products/services for different customers. As such, this is an attempt to
comprehend superior product, costs of customers as well as productivity. Bergeron (2017)
recommended a balanced view on operations of the corporation consisting of different
financial dimensions along with dimensions associated to strategy of marketing, works of
research and development, maintenance of social accountabilities and welfare of employees.

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The notions of triple bottom line with social accounting were necessarily introduced during
the period 1990s (Pimentel and Major 2014). These concepts were popularized in response to
the need to track and at the same time confirm corporate profits. Triple Bottom Line is
necessarily a performance reporting framework concentrated on sustainability necessities of
business concerns worldwide (Hoque 2014). In actual fact, this notion suggests concentration
on three social responsibilities that include enhancing economic prosperity, environmental
protection as well as social equity. The advent of the information era during the 20th century
made several suppositions of the industrial age outmoded. Bergeron (2017) highlighted that
continual enhancement methodologies namely total quality management, reengineering of
business processes along with involvement of employees stress the requirement of
performance dimensions for delivering impetus to this kind of performance enhancements.
Throughout the years, the balanced scorecard evolved from being a performance
measurement tool introduced by Kaplan and Norton to an effective tool for implementation
of strategies. Keyes (2016) pointed out that the balanced scorecard can acknowledge diverse
deficiencies in different system of business performance measurement. This system is
entirely dependent on financial dimensions and endeavours to overcome the deficiencies of
subsisting measurement systems by way of enumerating and evaluating outcomes across
wide range of actions. Hansen and Schaltegger (2016) mention three different stakeholders
namely, shareholders (financial point of view), customers (associations with customers) and
employees (referring to internal business procedures along with learning and growth).
However, this concept ignores two important stakeholders namely environmental as well as
social matters. This leads to examination of justification of inclusion of other factors in the
framework (de Andrade et al. 2016).

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Opinions on BSC
Recent researches on balance scorecard in retail setting
Prior literature indicates towards the fact that for a balance scorecard to generate optimal
performance, different facets need to be part of the arrangement. Studies conducted by
academicians stresses on two different facets namely, effectiveness of information and
support of managers of the entire system. Essentially, employees have the need to understand
that system delivers effectual information (Cooper et al. 2017). Case studies on retailer
namely Wildcat was hugely supportive of project as represented in the participation rate of
survey of over and above 72%. Particularly, Wildcat managers notices that balanced
scorecard is normally advantageous and this report about a positive attitude towards the same.
Furthermore, managers can report favourable awareness for most of the characteristics of
BSC along with functionality. It is also observed that positive managerial approaches towards
BSC are related to higher scores (Bobe et al. 2017). This in turn can be related to higher
financial performance. In case of retailers, conventional financial dimension at the operating
management level is actual sales compared to sales relative to specifically budgeted sales. A
corporation is a small number of merchandising corporations that is in charge of large
proportion of retail market of the product (Coe and Letza 2014). Different conventional
financial profit dimensions that are delayed until the end of reporting period, sales-to-plan
information is available virtually on demand by the manager. Essentially, an issue is about
timeliness in retail setting in which managers concentrate on data on sales (Hawari and Tahar
2015). The utilization of multi-dimensional performance measurement system that
incorporates varied non-financial measures can lead to delayed process of reporting
compared to sales based financial measures.

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Balanced scorecard can be used to enhance retail operations. For example, Tesco Plc can be
considered to be a worldwide as well as general merchandising retail firm established in the
UK. In this company, the property team is said to be at the central part of ongoing concern.
Essentially, operations particularly in property includes diverse aspects of purchasing,
building to particularly maintaining the stores. The company uses balanced scorecard for the
purpose of driving performance in the area of property segment of the business. Management
of the firm is of the view that basic principle of any system of measurement is essentially to
highlight specific areas of improvement (Coe and Letza 2014). In case if one fails to
enumerate, then it becomes difficult to control or else improve the operations. Therefore,
steering wheel can be considered to be an important instrument to gauge performance and to
steer overall business in the correct direction. By means of corporate governance, both
systems and framework to uphold in position, this can be considered to be vast value-add to
any kind of business. Particularly, at the firm Tesco, management use Steering Wheel that
was developed based on the principles of a balanced scorecard (Beard and Humphrey 2014).
Essentially, this was quickly as well as effectually rolled to diverse departments of the
company and is an important part of administration strategy at diverse echelons. As
mentioned in a study by Chiarini (2016), the stores of Tesco have a visual display of the
particular steering wheel and key dimensions behind it can be updated each and every week
for members of the staff to operate in a single direction. Especially within the role,
management of the firm utilize the steering wheel as a part of agenda of the meeting on
property leadership for making certain that the focus is at the top level. In itself, any kind of
under-performing dimensions thereafter are put forward in the meeting with appropriate plan
of action as well as timeliness. In essence, this is also complimented by particularly a visible
along with effective plan of communication for essentially the steering wheel. This takes in
display of wheel, summary as well as actions and diverse change projects that are initiated to