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ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement

Halden Retail's board compares two frameworks. Its Balanced Scorecard has four perspectives. The board wants a framework that explicitly measures what the firm needs from suppliers and regulators and treats those groups as equal in importance to customers. Which conclusion is most accurate?

The Performance Prism is better suited, because it explicitly covers a wide range of stakeholders such as suppliers and regulators and models the two-way relationship of what they want and what the firm needs. The Balanced Scorecard focuses mainly on shareholders and customers.

  1. AThe Balanced Scorecard is adequate because the customer perspective covers all external parties
  2. BThe Performance Prism is better suited because it explicitly addresses a wider range of stakeholders and their two-way relationship with the firmCorrect
  3. CThe Building Block model is better because its rewards element covers suppliers and regulators
  4. DThe Results and Determinants framework is better because it was designed specifically for multi-stakeholder measurement

Explanation

The Performance Prism treats multiple stakeholders and the two-way relationship of satisfaction and contribution. The Balanced Scorecard is mainly shareholder and customer focused, with limited explicit treatment of suppliers and regulators. Building Block rewards concern staff motivation, not stakeholders in general.

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