Implementing a balanced scorecard approach in a chain of grocery stores

Abstract

Purpose: With the increasingly competitive environment surrounding the minisupermarket sector, multidimensional performance measurement (PM) systems, such as the Balanced Scorecard (BSC), are crucial. Accordingly, the primary purpose of this research study is to design and evaluate the Balanced Scorecard approach within the context of a local chain of grocery stores. In achieving this, a brief analysis of the current PM system in place was performed, followed by the design of the case company scorecard and strategy map. Ultimately, the study evaluates the potential implementation of the designed BSC within the case company and its contextual suitability. Design: In order to reach the research objectives identified, a qualitative, case study approach was selected. In-depth semi-structured interviews were held with various personnel within the case company. Moreover, this research was also supplemented by validation interviews with the firm’s senior management. Findings: The selected case company adopts various individual KPI’s which are closely linked to staff compensation in established incentive schemes. However, the absence of a holistic PM system established the rationale for the BSC’s introduction. Apart from the four main traditional perspectives outlined by Kaplan and Norton, an additional perspective was introduced to cater for the environmental and social aspects of the firm. Conclusions: The study concluded that the proposed BSC is both feasible and value adding for the chain of grocery stores under study, with the final BSC and strategy map being validated by four senior personnel. In addition, the firm’s rigid company structure and executive support will certainly aid the potential implementation of the BSC although the lack of communication between low-level and senior management might be a hindrance. Value: This study is of value to the selected chain of grocery stores as it confronts several PM shortcomings and provides a holistic approach to PM. Furthermore, the insights and recommendations provided within this study can be useful to similar companies within the same sector.