FINANCIAL PERFORMANCE MANAGEMENT

Analysis of Tesla’s Performance with Total Quality Management (TQM) And Balance ScoreCard (BSC) Student Name Institutional Affiliation Course Code Instructor Date Total words: 2488 Word Count Excluding References: 2178 Contents TOC \o "1-3" \h \z \u Introduction PAGEREF _Toc161159372 \h 3Total quality management PAGEREF _Toc161159373 \h 32.1 Key principles underline TQM and various TQM systems PAGEREF _Toc161159374 \h 32.2 Explanation of Key TQM principles that went wrong at Tesla PAGEREF _Toc161159375 \h 32.2.1 Customer Focus PAGEREF _Toc161159376 \h 32.2.2 Process Management PAGEREF _Toc161159377 \h 42.2.3 Employee empowerment and involvement. PAGEREF _Toc161159378 \h 42.3 Cost of Quality Report (COQR) PAGEREF _Toc161159379 \h 52.3.1 Prevention Costs PAGEREF _Toc161159380 \h 52.3.2 Appraisal Costs PAGEREF _Toc161159381 \h 52.3.3 Internal Failure Costs PAGEREF _Toc161159382 \h 62.3.4 External Failure Costs PAGEREF _Toc161159383 \h 62.4 Major Barriers to Adopting the COQR System at Tesla PAGEREF _Toc161159384 \h 63. Balance ScoreCard PAGEREF _Toc161159385 \h 73.1 Perspectives PAGEREF _Toc161159386 \h 73.1.1 Financial Perspective PAGEREF _Toc161159387 \h 73.1.2 Customer Perspective PAGEREF _Toc161159388 \h 83.1.4 Learning and Growth Perspective PAGEREF _Toc161159389 \h 93.2 Linkage PAGEREF _Toc161159390 \h 103.3 Limitation of balanced scorecard PAGEREF _Toc161159391 \h 11Conclusion PAGEREF _Toc161159392 \h 12References PAGEREF _Toc161159393 \h 13 Introduction This report will analyze Tesla's performance and current issues related to quality control, as highlighted in the given articles. Solutions to address these issues will be proposed by applying Total Quality Management (TQM) principles and the Balanced Scorecard (BSC) framework. Specifically, relevant areas of TQM will be identified and critically evaluated to mitigate Tesla's quality problems. Additionally, the BSC perspectives will be examined to determine how they could support Tesla's competitive strategy and position in emerging markets. This essay concludes with recommendations integrating TQM practices and the BSC approach to enhance Tesla's overall performance and address its quality concerns while maintaining a competitive edge. Total quality management 2.1 Key principles underline TQM and various TQM systems Total Quality management is planning and overseeing all aspects of a company's operations with the objective of delivering goods and services that either meet or surpass the expectations of its clients. (Lecturer, n.d.). TQM has eight key principles; Tesla's issues utilize three of the eight principles: customer focus, continuous improvement, and employee empowerment and involvement. 2.2 Explanation of Key TQM principles that went wrong at Tesla 2.2.1 Customer Focus Customer focus is one of the key principles that went wrong at Tesla; it emphasizes understanding and meeting customer needs and expectations. Tesla has faced numerous reports of quality control problems, such as missing suspension bolts, panel gaps, glass roofs flying off, and crucial components cobbled with substandard materials (Stumpf, 2023). These issues indicate a lack of customer focus, impacting the customer experience and satisfaction with Tesla's products. 2.2.2 Process Management Process management involves analyzing and optimizing processes to eliminate defects and improve efficiency. Tesla's quality issues, such as using substandard materials and critical components being cobbled together (Stumpf, 2023), indicate problems in their process management. Ineffective processes can lead to defects, inefficiencies, and customer dissatisfaction. Also, a lack of excellent process management leads to a struggle to meet production targets. Elon Musk's acknowledgment that ordering a Tesla car during a new model's ramp-up era might not be advisable due to quality concerns further highlights the need to improve in this area to address defects proactively (Isidore, 2021). 2.2.3 Employee empowerment and involvement. Another key principle that went wrong for Tesla was employee empowerment and involvement. The principle encourages employee participation and decision-making to enhance quality and productivity (American Society for Quality, 2024). The quality issues Tesla faces, such as using substandard materials and critical components being cobbled together (Stumpf, 2023), may indicate a lack of employee empowerment and involvement in the company's processes. Implementing a cost of quality report, quantifying the costs associated with poor quality and the potential savings from quality improvements, could enhance Tesla's total Quality Management. By tracking and analyzing these costs, Tesla could prioritize quality initiatives and demonstrate the financial impact of quality efforts to stakeholders, fostering a stronger commitment to Process Management, Customer Focus, and empowering employees. 2.3 Cost of Quality Report (COQR) (COQR) is a structured approach to identifying and measuring the costs associated with preventing, detecting, and resolving defects or quality issues in an organization's services or goods (What Is Cost of Quality (COQ)? | ASQ, n.d.). By applying the COQR system, Tesla can gain insight into the financial impact of quality problems and prioritize improvement efforts accordingly. 2.3.1 Prevention Costs Prevention costs relate to activities to prevent defects or quality issues. These could include costs associated with quality planning, employee training, process management to eliminate defects, and supplier quality assurance programs for Tesla. An analysis of prevention costs in areas such as quality control systems and employee training related to Tesla's reported quality issues of missing suspension bolts, panel gaps, and substandard materials needs to be done (Stumpf, 2023). Observing the connection between internal failure and prevention cost is essential to improve Tesla's performance issues related to production ramp-up challenges and quality inconsistencies (Isidore, 2021). 2.3.2 Appraisal Costs Appraisal costs involve inspecting and evaluating products or services to ensure they meet quality standards (What Is Cost of Quality (COQ)? | ASQ, n.d.). For Tesla, these could include costs associated with incoming material inspections, in-process inspections, final product testing, and field inspections. An analysis of appraisal costs related to Tesla's quality issues of glass roofs flying off and crucial components cobbled together should be undertaken (Stumpf, 2023). Observing the connection between appraisal costs and external failure costs is vital to boost Tesla's habit related to client dissatisfaction and reputational damage (Isidore, 2021). 2.3.3 Internal Failure Costs Internal failure costs arise from...