What Is Triple Bottom Line All about - Research Paper Example

Triple bottom line (TBL) XXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXX Triple bottom line structure has become famous in financial institutions and industries. Most companies seek to integrate sustainability into their business world. Organizational success is not only measured by checking the financial bottom line but also by its social and environmental responsibility. Triple bottom line is used to measure the economic, environmental and social aspects that a firm has to embrace to be considered socially responsible (Slaper & Hall, 2012, 1). Therefore, triple bottom line is a tool used to report business activities basing on its economic, social and environmental perspective. The paper seeks to examine triple bottom line framework within the industrial perspective. This is because; there is a need to appreciate how companies in Bristol have incorporated the triple bottom line issues that has led to their growth and success (Hemingway, 2002, 16). Supporters of triple bottom line claim that, it is necessary for firms and industries to keep in consideration social welfare when measuring their performance. In the past, bottom line involved measuring a company’s capabilities by evaluating the profit margin and other financial measurements. Nonetheless, triple bottom line involves more than financial measurements. It also includes social and environmental welfare. Therefore, for a company to be considered successful it is crucial to ensure social and environmental needs are in consideration (Norman & MacDonald, 2003, 7). It is necessary for firms to use the triple bottom line concept. This is because, by measuring social performance, a firm is able to gain more profit in the long-run. Additionally, firms also have a role in ensuring there are strong social obligation claims. A firm’s social impact is crucial in evaluating whether the firm takes social needs in consideration. a firm also has obligations to stakeholders to put forward information of whether it performs according to stakeholders expectations (Norman & MacDonald, 2003, 12). Therefore, it is crucial for firms to put social and environmental needs in their performance measurement. Additionally, results of the social involvement should be reported accordingly. Other critics claim that it is difficult to measure social and environmental involvement of a firm in a quantitative form. Therefore, when a firm is involved in social and environmental issues, it is impossible to quantify the results. Whether good or bad it is impossible to measure the performance. The traditional bottom line used accounting concept of unit of measure. Nonetheless, the concept cannot be used when measuring a firm’s social involvement. Additionally, when a firm is involved in charitable events it is difficult to evaluate the donation as to whether it is a gain or a loss (Norman & MacDonald, 2003, 14). Corporate social responsibility is known to ensure a company makes profit and at the same time being socially responsible. In the past companies have been known to use CSR initiative for profit making, but the different awards that exist worldwide has made most companies to incorporate both economic and social responsibility. Therefore, most businesses seek to be profitable and responsible at the same time (Carroll, 2010, 499). Corporate social responsibility involves three pillars of social, environmental and economic sustainability. Social responsibility involves things like favorable labor practices. Companies are required to adhere to governmental rules of ensuring they are respecting their employees and the labor laws that exist to protect them (Davis, 2007, 73). Additionally, in practicing social responsibility, having good relationship with the community is crucial. A company that adheres to community laws is likely to gain more profit and better growth in the long term. Legal laws and regulations are also considered to be part of social responsibility. Stakeholders’ participation, social justice and partnerships is also considered to be part of social responsibility (Slaper & Hall, 2012, 4). Economic responsibility involves indirect economic effects, where a company gains momentum and grows indirectly (Slaper & Hall, 2012, 2). Financial health profitability involves the growth in financial status of a company to a stable position, economic performance, where the operations of the company lead, to enormous growth of the company. Policy goals and the target market also add up to the economic responsibility of a company (Davis, 2011, 115). Environmental responsibility involves better use of resources like air, energy and minerals. Companies are required to preserve natural resources. Most companies have adopted TBL initiative in order to ensure a sustainable environment is maintained. In the recent past, companies’ performance and growth have been measured against triple bottom line (Ackerman, 2009, 87). Majority of businesses and non-profit organization have adopted the use of TBL in conserving the environment. Additionally the governments have put in laws and measures to ensure businesses adhere to the rules of sustainable responsibility (JToftheD, 2011, 1). Nonetheless, triple bottom line has been argued to be difficult to follow. This is because; the three aspects that measure triple bottom line are hard to maintain if a company seeks to gain profit. Majority of companies are known to only be profit seeking forgetting social and environmental issues (Economic affairs, 2012, 5). Bristol was considered the best company because it incorporated the three pillars of triple bottom line. The city is known to take into consideration both the social and environmental issues of the community. At the same time, the city keeps on growing and expanding economy wise. The city ensures sustainable development is achieved in the society. Industries are advised to respect the environment and to ensure the society is not affected by air or water pollution (Hemingway, 2002, 20). In addition, with the increasing changes in the technological world Bristol also puts that into consideration. Bristol also ensures the community is involved in development of the city. Communication platform has been established that assist in ensuring the society is involved in development of the city (Burke & Gaughran, 2007, 6). Bristol has been involved in a number of social activities that has assisted in boosting its image. Bristol also has invested in green technology. This involves using technological products that are environmentally friendly. Hence, Bristol deserves to win the green capital award for 2015. References Ackerman, R.W. 2009. How companies respond to social demands. Harvard Business Review, 51(4), pp. 88‐98. Burke, S. & Gaughran, W.F. (2007). Developing a framework for sustainability management in engineering SME’s. Robotics and Computer‐Integrated Manufacturing, 1‐8. Carroll, A.B. 2010. A three‐dimensional conceptual model of corporate performance. The Academy of Management Review, 4(4), 497‐505. Davis, K. 2007. Can Business Afford To Ignore Social Responsibilities? California Management Review, 2(3), 70‐76. Davis, K. 2011.The Case for and against Business Assumption of Social Responsibilities. The Academy of Management Journal, 16(2). 312‐322. Economic affairs. 2012. Case against TBL. Blackwell Publishing Limited. 1-6. Hemingway, C. 2002. An Exploratory Analysis of Corporate Social Responsibility: Definitions, Motives and Values. Research memorandum. 1(25). JToftheD. 2011. Bite the Bullet: The extent to which governments should influence Corporate Social Responsibility. http://buss4csr.blogspot.co.uk/2011/02/bite-bullet-extent-to-which-governments.html. Norman, W & MacDonald, C. 2003. Getting to the Bottom of “triple bottom line”. 1-31. Slaper, T & Hall, T. 2012. The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Research Center, Indiana University Kelley School of Business. 1-6. Read More