Question
The components of the Triple Bottom Line are people, profit, and planet. The focus on people deals with internal employee aspects such as diversity, empowerment,
The components of the Triple Bottom Line are people, profit, and planet. The focus on people deals with internal employee aspects such as diversity, empowerment, and health and safety. It also
expands to charitable contributions and corporate relations.
Organizations that focus on more than the financial bottom line typically generate profit through ethical behaviour as well as cost savings through sustainable practices. The planet element looks beyond environmentalism and finds eco-efficiency in operations, manufacturing, and product development. Over the next 12 chapters, we will examine 3BL in practical circumstances.
This explanation of Triple Bottom Line provides the context for students understanding that there are now three different ways to look at what is "the bottom line" for business. Where this term simply meant what whether a profit or loss was showing at the bottom of an organization's income statement, the current "bottom line" means more than a strict accounting measure of performance. In other words, using a 3BL approach to judge our performance takes how we are contributing to our community and protecting our environment into consideration in addition to just "making money."
THINKING STRATEGICALLY ABOUT 3BL
The business case benefits of 3BL are illustrated in Exhibit 1-7.
Exhibit 1-7 The Business Case Benefits of 3BL
Business benefit case & business case components:
reduction in human resources costs: Recruiting costs are lower due to stronger employer branding; higher employee morale decreases turnover costs.
Reduction operational costs: Manufacturing expenses are lowered through cost savings and continuous improvement; water, energy, and consumables expenses are reduced.
Decreased risk: Risks of non-sustainable practices are reduced, stakeholder relations are improved, and access to financing is increased.
Business improvements: Productivity is increased due to higher employee morale; sustainability awareness leads to higher innovation.
financial improvements: Revenue increases due to greater market access and customer loyalty; improved relationships with regulators.
Source: Adapted from B. Willard, The Next Sustainability Wave (Canada: New Society Publishers, 2005), p. 130.
BE THE CONSULTANT
In this scenario students are asked to split up the key management functions of planning, organizing, leading, and controlling and identify three key decisions that they will have to make in each of the four functions to help the new campus comedy club become successful. They are also asked to identify the metrics they would use to evaluate the effectiveness of their managerial roles at the end of six months.
Since students have only the general definitions at this point about the management functions their answers will likely be rather rudimentary. They will likely assign each member of the group to a function, and some of the decisions may be as follows:
Planning: set goals (e.g., to break even or earn a profit by the end of year one)
Organizing: identify the tasks that need to be undertaken to support the club and hire staff Leading: have a meeting to communicate goals and provide some incentives to motivate staff
Controlling: have a budget for expenses, etc.
Again, without much experience the metrics (once defined for them) will be basic, such as number of visitors per show, average expenditure per visitor, so that they can connect their goals to some kind of result.
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