The Triple Bottom Line Theory - Coursework Example

TRIPLE BOTTOM LINE (FINANCIAL, SOCIAL & ENVIRONMENT ASPECTS) Introduction Most organizations emphasize on sustainability as one of their core features; however, establishing the depth of sustainability by these corporations is always hectic as they are very limited and sometimes there no utter way for achieving this (Tavanti 2010). A business researcher first initiated triple Bottom Line as he struggled to evaluate the different corporations in America by analyzing their performance in dissimilar markets. This framework was the first to include ecological and societal factors on top the common ones like proceeds, returns and the value of shareholders in its evaluation. Today, Triple Bottom Line is a significant tool that organizations can use to maintain and anticipate their goals as it focuses on utter venture outcomes in relation to the financial, social and environmental aspects (profits, people and the planet) (Slaper 2014). Due to the promising results, Triple Bottom Line has lured a lot of attention from nations’ authorities, non-governmental organizations and businesses all-round the globe using this to analyze their ways and places in the competitive markets. Resultantly, implementation of this approach has had its merits especially with international organizations and governments that have profited in all the levels. This paper reviews the Triple Bottom Line theory through evaluating a company that has been implementing it to elaborate how it has influenced the overall performance; moreover, it emphasizes on ways that the performance can improve, focusing on theory, research literature and different concepts. The company’s analysis revolves around the usefulness of the concept to the business, the management and other growth practitioners in the economy. Review of the Triple Bottom Line Initially, most of businesses’ reports focused on financial aspects alone as the sole dimension in their evaluation framework; however, the Triple Bottom Line definitely stands out as it also incorporates the environmental and societal factors that require a lot of work to establish. The difficulty in measuring is the main reason why people overlooked the two additional dimensions (Soderbaum 1984). All the same, one can also interpret the Triple Bottom Line as the 3Ps, as all its attention is on ‘profits’, ‘people’ and the ‘planet’. Before the introduction of this concept, it is clear that people had many challenges in trying to establish sustainability among other essential factors of businesses and other institutions; however, after this, many academic institutes now have many theories and principles that base on the Triple Bottom Line concept (Anderson 2004). Nonetheless, all the new theories do not necessarily originate from people in the academic field but there are people in other fields that still contribute to the same. Almost everyone agrees with the initial notion brought out from the Triple Bottom Line concept that it uses the significance of sustainability in gauging the effect of a corporation’s events on states around the globe (Sustainable Hamilton 2014). Additionally, profits and the shareholder values are also part of the effects on top of the three levels of capital (i.e. communal, individual and environmental). However, different people have varying definitions of the Triple Bottom Line concept and they do not understand that the real essence here is not describing it but determining it. For instance, a financier or stakeholder would describe the TBL as a concept that a company could use to inaugurate as business with steady and consistent returns while a scholar in the university would say that it is a way out for a company that has no significant impact for its environment (Davis 2013). Some people will consider these two notions to be wrong, other will support one and, others argue that they are all correct but would be perfect if they include the aspect of people. Obviously, businesses that operate using the Triple Bottom Line concept as their basis, have varying results because of the different understandings and perception of it. For example, some people argue that a company such as Dom’s Shoes that manufactures environmental-friendly shoes is a better implementer of the concept than Jane’s shoes which produces shoes made from hides and animal skin. There is a clear connection between the people, the company and the reason behind the notion hence creating the different images of the two in the community (Triple Pundit 2014). Nonetheless, there is no evidence supported by the Triple Bottom Line concept from which the arguments base; moreover, they indicate lack of enough information and understanding of the concept. From another angle, there is a lot of discussion on whether it is advisable for a new business to implement the TBL concept as part of its development; will this help a starting business? Is it best for companies that have already established themselves? Analytically, this depends on the businesses’ interests and objectives because sometimes an organization might extensively achieve on factor but end up hurting another, which is essential just as much. However, today there is ample proof that using the Triple Bottom Line for a starting business has its advantages, which also relies on the core strategy that the organization has put in place (Colbert 2009). About a decade ago, startup businesses refrained from implementing the TBL ideologies into the organization’s prospectus because of the uncertainty and because it will make its mission known. However, today there are people who testify of the positive impacts of the Triple Bottom Line concept to a starting business, as there are those that are now booming after doing so. However, not all types of businesses are sure that it works because they are people in the field that argue that a organization’s success depends on its position in the market once it decides to apply TBL. For a new business, the position that they start at is the core sustainability factor for the starting years before it is capable of attracting a larger audience and balance. The people or social side of the Triple Bottom Line is a conflicting aspect, as most people do not utterly apply of the necessary modules of the dimension; generally, when people recognize the word ‘social’ the first thing that crosses their mind is the society. This is the reason why most corporations fail because they reflect more on the community ignoring the staff and other essential people in the organization. A significant example elaborating the aspect of people is of a company X that produced dough, the main component required by company Y to make its ice cream and cookies. The manager of company X insists on employing migrants to support them in stabilizing their stay in the new country as a way of giving back to the society and applying the social dimension of the Triple Bottom Line (University Alliance 2014). The employees of company X are experiencing challenges in being punctual for work affecting the overall performance and inconveniencing company X. The lateness resulted from breakdown of their cars and others lacking a dependable means that they can used to get to work; evidently, they are in a new country so they have no credit cards or any other opening that they can use to counter these challenges. At the end, the manager of company X decides to use his bank and secures all of his employees’ a thousand dollars line of credit that they could now use to buy cars or find a house near the working premises. For most employers and organizations, the social dimension of the Triple Bottom line would have concluded at the point of giving the immigrants the chance to work at the plant hence overlooking the challenges that they face as new employees. Companies under the Triple Bottom Line should consider the quality of the employees and their working conditions since the workforce contributes greatly to the mission and objectives of any organization. Using the available resources is a good start for the companies to make this effective (The Economist 2009). Assertively, today most of the young people starting businesses focus on a large gain and assignments rather than the traditional simple and work-your-way-to-the-top initiatives. This is the main reason behind the failure of new businesses and the success of companies that have been there for a while. Companies that started decades ago tend to increase their success as days go by, essentially, because the sustainability lures interested and conversant candidates that end up as employees or investors (Vanclay 2012). This is because the organization and these candidates have mutual objectives and drives that when merged impact greatly on the Triple Bottom Line initiatives influencing and covering all the dimensions. Resolutely, most companies that took the Triple Bottom Line initiative a few years ago in the United States have enjoyed the adverse rewards with some experiencing up to over a hundred percent increase in the annual profits. Only a few starting companies and organizations incorporated TBL in their mission; for some it has turned out to be profitable but others require review on the strategies best for it (Scott 2012). One of the successful companies is The Jess Company a multimillion-dollar startup organization with impressive results. Background and Analysis of the Jess Company The Jess Company started around three years ago and one of the co-founders was a prominent figure in the entertainment business; nonetheless, the company’s main aim was manufacturing organic, environmental-friendly and fair price merchandise for toddlers and the rest of the household. The company has experienced many developments since it started with over a hundred-percentage increase in the profits in the duration of two years. The Jess Company is popular and prominent because it was among the first corporations that took on the Triple Bottom Line initiative from the beginning. The reason behind the foundation of company was that one of the co-founders went through almost all the supermarkets and stores in her area without coming across a baby product that lacked a noxious component for her daughter. Due to the struggle, she consulted one of her friends in the medical profession, which led to them initiating an establishment that dealt with a kind of products (non-toxic), different from those of the competitors; surprisingly, the company sold its own and original products unlike most startup businesses. The products entailed lotions for the skin, diapers and other products that had zero lethal components through indenture industrialists in the United States. The best step of their starting strategy was collaborating with ecommerce experts that controlled and saw over all the procedures. Formerly, the company focused on selling scheduled orders and conducting online transactions but as from last year, it switched to a more retail model where it now vends to a number of stores that deal with these baby products. Moreover, the Triple Bottom Line initiative has caused much advancement with the company now having over fifty products that they trade and make alterations according to customer’s requests. The company’s tactic to win the customer’s trust is through the quality of the products, which have natural, carbon-based, sustainably collected, untainted underdone constituents as their components i.e. the company’s diapers, that can be disposed use provisions from vegetation. The company’s suppliers sign a contract, which obliges them to conform to civil rights, ecological and certification morals; significantly, the laws are very essential that the company has a record of sacking numerous suppliers and maintaining a minimum number of twelve suppliers. Recently, the Jesse Company set aside funds to extend its business and construct outlets in the United Kingdom and Australia where most of other baby product manufacturers fail to venture because of the stern biochemical conventions. In these areas, the protocols are so serious with a difference of nine hundred and fifty chemicals from the ten that the United States restricts. Remarkably, the Jesse Company is the only company in the United States whose merchandise happens to pass all the criterions in these countries. As of now, the Jesse Company is bases in California where the manufacturing and the rest of the operations take place; most of the people around that location confess that since its start, there have been many developments and the company insists on giving back to the community through different CSR initiatives. The company has prospects of implementing the same in other areas through other outlets inside and outside the country and manufacturing other products. Comprehensively, the Jesse Company is a non-profit corporation whose main objective is assisting kids and people with basic needs’ struggles; typically, they have a popular initiative known as the ‘kid to kid’ program that goes through cities in the United States providing toddler necessities to families. This program and donation is a clear exercise of the social dimension of the Triple Bottom Line. Most organizations expand so that they can invest in other areas hence create more financial gains but for the Jesse Company they are focused on dominating the non-toxic products manufacture through reaching out to a bigger number of consumers and inspire them to embrace restored ways (Elkington 1994). In any case, this is the best way there is for a company to implement and use the Triple Bottom Line without profits being the main facet. Generally, most of the companies that manufacture products that are hard to find (i.e. the Jesse Company) set high prices that most of the consumers cannot attain, but using the Triple Bottom Line has helped this company overlook such traditions and they still stand out from the rest of competitors (University of Wisconsin 2014). Ways that the Jesse Company Can Improve Corporate Social Responsibility is one of the powerful principles that create the urge for the Triple Bottom Line initiative while creating the plan for a certain business plan; nonetheless, there are others, such as sustainability that also depend on the same and appear to be lucrative than the rest. Most of the profits that result from the integration of these dissimilar aspects are incorporeal as they revolve around being ahead of the competition, company’s repute and amended novelty (UWS 2014). Generally, the profits do not always have to be about the financial gains and the most important is the reputation of the brand once the TBL is incorporated. The Jesse Company has had its vicissitudes in the past but some are still challenges and require addressing, as they are essential to the brand’s reputation. There has been a series of customers complaining that the company’s hotline put them on hold for a long time and in the long last, they did not get the chance to voice their needs at all; moreover, another customer made an error and they signed up for the company’s free trial that charges a certain amount. Unfortunately, the customer did not manage to cancel the free trial through the website, when they called the company, the call did not go through. This has led to many arguments online and the company is yet to reply raising questions related to its efficiency and management. The Jesse Company, as an advocate of the Triple Bottom Line, should put more effort in making the life of the customers easier on this factor; additionally, this part of their objectives should not focus on producing essentials that are not lethal and environmental-friendly only (Garriga 2004). There should be more research done on aspects that do not necessarily relate to products putting a little more focus on the customers complains and reviews. Moreover, the evaluation of customer’s criticisms and compliments should be regular to facilitate the developments and changes made. Appreciably, the company encourages its consumers to call frequently and send emails too but it is clear that the system involved requires utter appraisal, as some of the customers feel unappreciated. REFERENCES Anderson, R (2004) Climbing Mount Sustainability: Quality Progress, 37(22): 32-37 Davis, G (2013) Triple Bottom Line Goal of Sustainable Business: Starting a Business, Entrepreneur. Retrieved on 22nd October 2014, from http://www.entrepreneur.com/article/225948 Scott, Ryan (2012) Bottom Line of Corporate Good: Forbes, Retrieved on 22nd October 2014, from http://www.forbes.com/sites/causeintegration/2012/09/14/the-bottom-line-of-corporate-good/ University of Wisconsin (2014) Understanding Sustainability and Triple Bottom Line: About Sustainable Management, Retrieved on 22nd October 2014, from http://sustain.wisconsin.edu/about-sustainable-management/ Triple Pundit (2014) Understanding People, Planet and Profit for Responsible Business: Triple Bottom Line, Retrieved 22nd October 2014, from http://www.triplepundit.com/topic/triple-bottom-line/ The Economist (2009) Triple Bottom Line: Online Extra, Retrieved on 22nd October 2014, from http://www.economist.com/node/14301663 Sustainable Hamilton (2014) What is Sustainability: Discover, Retrieved on 22nd October 2014, from http://www.sustainablehamilton.ca/discover/ University Alliance (2014) Triple Bottom Line: University of Vermont, Retrieved on 22nd October 2014, from http://www.universityofvermontonline.com/resources/corporate-sustainability/the-triple-bottom-line/#.VEf9xvmSzJc Vanclay, F (2012) Impact Assessment and the Triple Bottom Line: University of Tasmania, 2 (9): 27-39 http://www.minerals.csiro.au/sd/pubs/Vanclay_Final.pdf Colbert, B (2009) Three Conceptions of Triple Bottom Line Business Sustainability and the Role for HRM: Wolf Institute, 30(1): 21-29 Http://www.stakeholderresearch.com/documents/sra-three-conceptions.pdf Soderbaum, P (1982) Positional Analysis and Public Decision Making: Journal of Economic Issues, 16 (2) 391–400 www.jstor.org/stable/pdfplus/4225177.pdf Elkington, J (1994) Towards the Sustainable Corporation- Win-Win-Win Business Strategies for Sustainable Development: California Management Review, 36 (2): 90–100 Garriga, E (2004) Corporate Social Responsibility Theories- Mapping the Territory: Journal of Business Ethics, 53(1): 51-71 University of Western Sydney (2014) Corporate Social Responsibility – The Triple Bottom Line: Small-Biz Connect, Retrieved on 22nd October 2014, from http://toolkit.smallbiz.nsw.gov.au/part/17/84/363 Tavanti, M (2010) Sustainable Value Management- Leading Organizations for an Integrated Triple Bottom Line: DePaul University, Retrieved on 22nd October 2014, from http://works.bepress.com/cgi/viewcontent.cgi?article=1011&context=marcotavanti Slaper, T (2014) Triple Bottom Line: Indiana Business Review, Retrieved on 22nd October 2014, from http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html Read More