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Executive Summary
MBA 500
SNHU
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The triple bottom line approach, which is commonly known as the TBL approach has
gained considerable attention among business entities across diverse industries and sectors.
When a company adopts the TBL approach, it primarily focuses upon a diverse range of
elements such as social and environmental concerns along with the profitability of the
business. The approach can act as a pathway that can enable a business entity to demonstrate
its level of commitment to corporate social responsibility while conducting the business
operations. Researcher Correia (2019) has argued that TBL acts as an ideal opportunity for a
company to integrate sustainability into its business (Correia, 2019).
Advantages and disadvantages of adopting the TBL model
The adoption of the triple bottom line model can have a major impact on a business.
It can give rise to numerous advantages such as the adoption of sustainable practices, high
focus on environmental issues as well as social problems. In the highly competitive and
dynamic business landscape of the 21st century, the adoption of the triple bottom line model
can help a business to improve its reputation as a responsible corporate citizen. In the market
context, such an approach can improve the goodwill of the company and strengthen its brand
image, which can have a positive influence on its demand and market performance. Even
though the TBL model can give rise to a large number of benefits, it can also give rise to
numerous disadvantages that cannot be negated. According to Sridhar and Jones, the triple
bottom line approach is highly conservative in nature and hence it is not well-suited for the
prevailing dynamic business landscape of the 21st century (Sridhar & Jones, 2013). Since the
TBL approach focuses on diverse areas such as people, planet and profit, the ability of a
business entity to conduct its operations in a focused manner gets diminished. For instance,
while trying to create value for the planet, a company might not be able to effectively create
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value for the ‘people’ factor. The integration of variables, namely people, planet, and
profitability, in the TBL model increases its complexity. This is because an organization has
to devise a suitable strategy that can focus in the needs and expectations relating to each of
these elements.
Role of a balanced scorecard to assist a company in measuring its TBL performance
A balanced scorecard refers to a performance metric that is used for the purpose of
identifying, improving, as well as controlling the diverse functions and results of an
organization. It acts as an extremely important tool that helps to measure a business entity in
relation to several areas such as learning and growth, customers, finance, and business
processes. A balanced scorecard can play a cardinal role to help a business to measure its
triple bottom line performance. According to Kaplan and McMillan (2020), a company can
use the balanced scorecard to evaluate its strategy that influences each and every action that
it takes to conduct the business processes (Kaplan & McMillan, 2020). For example, the
company can evaluate how it makes use of natural resources to increase the sustainability of
the processes and diminish the adverse impact on the environment. Similarly, the balanced
scorecard can also help a business to create value for human factors, including the internal
stakeholders as well as the external stakeholders. For the internal stakeholders i.e. employees,
an organization can create new learning and development opportunities for the staff so that
they can upgrade their skills and expertise while working in the organization. Researcher
Scholtz et al. (2012) has stated in her study that a balanced scorecard can help a business to
measure its TBL performance by facilitating and supporting sustainable reporting process
(Scholtz et al., 2012).
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References
Correia, M. S. (2019). Sustainability. International Journal of Strategic Engineering, 2(1), 29–
38. https://doi.org/10.4018/ijose.2019010103
Kaplan, R. S., & McMillan, D. (2020). Updating the balanced scorecard for triple bottom line
strategies. Harvard Business School Accounting & Management Unit Working Paper,
(21-028).
Sridhar, K., & Jones, G. (2013). The three fundamental criticisms of the Triple Bottom Line
approach: An empirical study to link sustainability reports in companies based in the
Asia-Pacific region and TBL shortcomings. Asian Journal of Business Ethics, 2(1), 91-
111.
Scholtz, B., Calitz, A. P., & Eastes, B. (2012). A Balanced Scorecard for Sustainability
Reporting. In Conference Paper at IBC Conference, Kenya.
