Triple Bottom Line Overview

Study Notes

Triple Bottom Line

Measures an organization's social, environmental, and financial performance.
Emphasizes accountability to employees and the wider community (People).
Commits to sustainable development (Planet).
Recognizes costs associated with pollution and worker displacement in financial calculations (Profit).

Stakeholders

Internal Stakeholders: Employees, owners, and board of directors involved in regular internal activities.
Board of Directors: Elected group overseeing firm activities, ensuring management acts in shareholders' best interest.
External Stakeholders: Parties outside the organization impacted by its decisions.

Environments

Internal Environment: Stakeholders connected to the organization's internal operations.
Task Environment: Comprised of groups interacting frequently with the organization, including customers, competitors, suppliers, and government regulators.
General Environment (Macroenvironment): Broad, uncontrollable forces affecting the organization.

Ethics

Standards of right and wrong influencing behavior can differ across cultures and countries.
Common ethical conflicts for managers involve balancing economic and social performance.
Ethical dilemmas arise from conflicting values held by different parties.

Values and Ethical Decision-Making

Values: Permanent beliefs influencing behavior and decisions.
Four Approaches to Ethical Dilemmas:
- Utilitarian Approach: Focuses on the greatest good for the greatest number, potentially harming the workforce for short-term profits.
- Individual Approach: Considers long-term self-interest, but may not benefit everyone collectively.
- Moral Rights Approach: Respects fundamental human rights; can lead to conflicts between employer and employee rights.
- Justice Approach: Upholds fairness and equity, ensuring impartial handling of policies like promotions and harassment cases.

Key Terms

Insider Trading: Illegal trading of a company's stock based on confidential information.
Whistleblower: Individual reporting organizational misconduct, such as health and safety violations or corruption.
Competitor: Entities vying for the same customers or resources.
Customer: Individuals or organizations purchasing goods or services from a business.
Distributor: Organizations aiding in the sale of goods and services to customers.
Philanthropy: The act of making charitable contributions for the benefit of society.
Supplier: Entities providing raw materials, services, or labor to organizations.

Description

This quiz examines the triple bottom line framework, which assesses an organization's social, environmental, and financial performance. It highlights the importance of accountability to employees and the community, as well as commitments to sustainable development and profit calculations that factor in costs like pollution and worker displacement.