Discuss about the Triple Bottom Line of Entrepreneurship.
Entrepreneurship in any industry should focus on a number of factors of the business to ensure high performance and effective success of the business. Entrepreneurs across the globe utilize various tools and frameworks to measure the success of their businesses. Triple Bottom Line (TBL) is such a framework used to define the success of a business, which is considered to be one of the most important frameworks used by the entrepreneurs across the globe. This framework is related to the concept of sustainability in the corresponding business. The conventional metric for measuring the success of a business used to be only the financial performance or the revenue generated from the business processes, which was considered to be the single bottom line in entrepreneurship. But the modernization of all the industries across the globe has evolved entrepreneurship to have two new bottom lines along with the financial performance of the business. These two new bottom lines are the social and environmental factors of the business. All of these factors constitute the Three Bottom Lines of entrepreneurship (Gimenez, 2012).
Triple Bottom Line (TBL)
The improvement and modernization of the various factors of the industries across the globe allows the entrepreneurs to utilize different tools and frameworks for determining the success of the businesses. The three bottom lines defined in this framework for the success of the businesses are economic line, social line and environmental line (Glac, 2015).
The economic line of the TBL framework is based on the economic system in sustainability. This line defines the capabilities of the business to create a strong effect on the economic system in order to support the needs and requirements of the future generations. So the success of the organization is based on the positive effects of its business operations on the economic system of both the corresponding market of operation and the global economic system in terms of the sustainable development of the economic system (Henriques, 2013).
There are a number of businesses and industries whose performance can’t be measured through this line as the economic impact of the business won’t always show the success of the business. Sometimes the business processes of the organization may not affect the economic condition of the market of operation, but that necessarily doesn’t mean that the business isn’t sustainable. In such scenarios, the business might be indirectly regulating the economic condition of the market of operating, which in turn positively affects the economic condition of the market of operation. This in turn allows the business to have sustainable impacts and become a sustainable business.
The bottom line of the TBL framework is based on the effects of the business on the corresponding societies of operation. This line considers the positive impacts of the business in terms of benefiting the society and the community by taking a number of initiatives. So the business initiatives to practice fair business operations along with fair business policies to the individual employees, customers and the societies are considered as this bottom line of the TBL framework, which in turn leads to sustainability (Savitz, 2012).
There have been many arguments on this bottom line of the framework, which defines the performance of a business in terms of sustainability. The social impacts of the business processes can’t be direct for all the businesses operating in various industries. In such scenarios, the successful and sustainable business processes of the organization aren’t considered to be sustainable by this bottom line of the framework. Moreover, the social impacts of the business are a set of highly uncertain variables in case of various markets across the world.
This bottom line of the TBL framework defines the performance of an organization on the basis of its effects on the environment. This line focuses on the minimization of the wastage of various natural resources along with the minimization of various pollutants from the business operations, as a metric for the success of the organization. This in turn aims for the sustainable development with effective focus on the environment. So this line of the TBL framework defines the success of the business in terms of its capabilities to minimization of the negative impacts to the environment, in order to be able to satisfy the needs and requirements of the future generations efficiently (Willard, 2012).
There have been a number of criticisms of this bottom line of the framework similar to that for the other bottom lines of the framework, regarding the effectiveness of this bottom line to determine the sustainability and success of the business. A number of businesses across various industries won’t have any of the businesses having any direct impact of the environment of the market of operation. Such businesses aren’t evaluated efficiently by this framework for their sustainability and success in the corresponding market of operation.
The Three Bottom Line is an effective framework for the entrepreneurs to define the success of the businesses in relation to sustainability. The framework defines three bottom lines for the success of the business, which are the economic line, social line and environmental line. The economic line determines the success of the business in terms of the sustainable development of the economic condition of the corresponding market of operation. The social line defines the success of the businesses in terms of the benefits provided to the society by the businesses in terms of sustainability. The environmental line defines the success of the businesses in terms of the impacts of the businesses on the environment in terms of sustainability (Hollos, 2012).
Gimenez, C., Sierra, V., & Rodon, J. (2012). Sustainable operations: Their impact on the triple bottom line. International Journal of Production Economics, 140(1), 149-159.
Glac, K. (2015). Triple Bottom Line. Wiley Encyclopedia of Management.
Henriques, A., & Richardson, J. (Eds.). (2013). The triple bottom line: Does it all add up. Routledge.
Hollos, D., Blome, C., & Foerstl, K. (2012). Does sustainable supplier co-operation affect performance? Examining implications for the triple bottom line. International Journal of Production Research, 50(11), 2968-2986.
Savitz, A. (2012). The triple bottom line: How today's best-run companies are achieving economic, social and environmental success--and how you can too. John Wiley & Sons.
Willard, B. (2012). The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.