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Respond to... Businesses and managers are looking beyond profit to maximize their exposure and create a brand that embraces doing the right thing. “More recently economists have recognized the triple
Respond to...
Businesses and managers are looking beyond profit to maximize their exposure and create a brand that embraces doing the right thing. “More recently economists have recognized the triple bottom line concept that says environmentally conscious and socially responsible firms will want to achieve a balance between profits, avoidance of damage to the environment, and achieving social benefits” (Douglas, 2012). Although there are some companies that startup their business with an environmental and social awareness, such as The Honest Company, other companies are transitioning to this concept to stay in the competitive ballpark.
Jessica Albe, an American actress and businesswoman, teamed together with author, Christopher Gavigan to create a company that sells and makes non-toxic, eco-friendly, affordable product for babies and their families, (Field, 2013). This company took the triple bottom line concept and built a business around it based on their needs and the needs of their children. Although the article mentions “affordable product”, I wonder if that term is in relationship to the income of an actress or the everyday person that is looking for the best choices for their children. Companies like Whole Foods, who sell many healthy and organic products, are higher priced than the average supermarket; eating healthy is expensive. Is the premise around companies like these the same as the mango example in our textbook regarding expected value of profit contribution at alternative price levels? Unlike the mango, these products may not have a shelf expiration date, so the risk involved at setting the price for these products would have to weigh on the target audience, the demographics of this audience and a projected sales volume. From this perspective, the company could make assumptions on volume of sales for the top tier audience and possible create a secondary audience that they can offer reduced pricing to, such as an outlet or a major merchandising store, to handle the inventory of the percentage of unsold merchandise – which would reduce the risk.
I am fortunate to work for a company that has always worked with a culture of a triple bottom line. They have focused on giving back to the community and environmental issues since their founding in 1924, and still focus on maintaining these objectives into their business plan. The grandson of the founder, Steve Holman, resides over community outreach where over $1 million dollars a year is built into the budget for grants, sponsorships and employee help programs. The company also encourages their employees to give back to the community and offers Days of Caring, where employees can spend two workdays helping within their communities. We also have a social responsibility coordinator that reviews processes within the company to make sure we adhere to regulations, but also looks for improvement in these processes that will benefit the environment. We have always advertised this culture, but once the triple bottom line concept appeared, it is becoming the norm in the business environment and advertising this information has less impact, much like the words honesty and integrity. The new norm for the consumer is to expect a company to have some type of triple bottom line culture build into their strategy. I would agree that companies should look beyond profit and engage on more of the triple bottom line initiatives for their business and for employee retention.
References
Douglas, E. (2012). Managerial Economics (1st ed.) [Electronic version]. Retrieved May 8, 2019, from https://content.ashford.edu/ (Links to an external site.)
Field, A. (2013, November 18). Jessica Alba's Triple Bottom Line Startup Raises $25 Million. Retrieved May 8, 2019, from https://www.forbes.com/sites/annefield/2013/11/17/jessica-albas-triple-bottom-line-startup-raises-25-million/#148e5cbd4111
Respond to...
The triple bottom line (TBL) is a framework or theory that recommends that companies commit to focus on social and environmental concerns just as they do on profits (Kenton, 2019). Jessica Alba’s role in creating The Honest Company came as result of her not being able to find non-toxic baby products that didn't contain some kind of toxic element. Alba co-founded The Honest Company with Christopher Gavigan. Brian Lee, (ecommerce veteran) was later named the CEO and Sean Kane to run operations. Customers can influence firms to pay more attention to the preservation of the natural environment. According to Wharton (2012), corporate motivation seems almost beside the point because of the significant business risks to ignoring corporate social responsibility (CSR). Consumers and other companies are likely to shun firms that develop unethical reputations and products. Arguably, companies that don’t pay attention to their ethical responsibilities are more likely to stumble into legal troubles, such as mass corruption or accounting fraud scandals (Wharton, 2012). As personal accountability and sophistication grows, consumers are also considering their own role in addressing social and environmental issues. According to Sustainable Brands (2015), “global consumers surveyed state they are willing to make personal sacrifices for the greater good: Four-in-five are willing to consume or purchase fewer products to preserve natural resources (81 percent) or buy a product from an unknown brand if it has strong CSR commitments (80 percent).” The Honest Company recognized early in its existence that the triple bottom line had to be adopted in order for them to remain sustainable. Incorporating the most important pillars of a successful business includes profitability, people, and planet. The honest company has remained profitable by ensuring that there price points is affordable, all products produced are non-toxic and made with organic products, and works with about 10- 15 suppliers that comply with human rights, environmental and documentation standards.
Reference:
Kenton, W. (2019). How There Can Be Three Bottom Lines. Retrieved from https://www.investopedia.com/terms/t/triple-bottom-line.asp (Links to an external site.)
Study: 81% of Consumers Say They Will Make Personal Sacrifices to Address Social, Environmental Issues. (2015). Retrieved 14 August 2019, from https://sustainablebrands.com/read/stakeholder-trends-and-insights/study-81-of-consumers-say-they-will-make-personal-sacrifices-to-address-social-environmental-issues
Wharton, K. (2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities | TIME.com. Retrieved 15 August 2019, from
