Corporate Social Responsibility and the Triple Bottom Line: Why Distributive Justice Matters More Than Accounting Tricks
That multinational corporations have an ethical duty to be socially responsible has been made very clear by businessmen and social justice advocates like Sir James Goldsmith (Rose, 1994). The question that remains is precisely how they are to execute that social responsibility. Some contend that a triple bottom line (TBL) concept is the way to measure whether a corporation is meeting its ethical obligations (by focusing on the "interrelated dimensions of profits, people, and the planet"), but TBL accounting is simply that -- accounting: it is not an ethical program that ensures social responsibility, only one that attempts to measure it (Slaper, Hall, 2011). Indeed, as Norman and MacDonald (2003) note, the TBL "is an unhelpful addition to current discussion of corporate social responsibility" (p. 1). This paper will show what the differences are between corporate social responsibility and the TBL, as well as discuss the idea of distributive justice and the current state of the distribution of wealth. It will conclude by showing why triple bottom line concepts do not ensure corporate social responsibility simply because they continue to place more emphasis on earnings than they do no social responsibility. From that perspective, corporations need to re-orient themselves with the duty they owe society, as Goldsmith (1994) argues.
Corporate social responsibility (CSR) programs are effective forms of management that directly and indirectly impact the "social, environmental and economic environment in which" the corporation functions (Castka, Bamber, Sharp, 2005, p. vii). In this context, corporations are viewed by societies as influential in the development of a better world in which there is concern for social and environmental safety. By using an ethical foundation for a business model, corporations can actually gain substantial market share and public trust because they are viewed as being good for the environment and for communities (as well as delivering a good product). It is not necessary therefore to use accounting concepts like TBL, since there is plenty of evidence of corporations failing to live up to ethical practices losing market share to companies that practice them in real life (Ferrell, 2010). The factors that affect the implementation of CSR programs can range from governmental standards to stakeholder involvement to moral and ethical cultures (or lack thereof) within the corporate entity. Thus corporate social responsibility is a framework that supports a company's goal of acting in an ethical manner that places the 3 P's -- profits, people, and planet -- in the right position when it comes to prioritizing: CSR puts people first.
One example of the good CSR is Keller Williams. The business model of Keller Williams is based on the motto "God, Family, Business" in that order and the entire organization is run like a big family, with individual agents teaching the Ignite classes (designed to "ignite" one's business right out of the gate) and always helping any facet of the business that one might be struggling with. The organizational culture of Keller Williams is one that focuses on the agent rather than the broker and supports the idea that every agent is CEO of his own company. To that end, Keller Williams also has a profit sharing system in place in which profits from transactions are divided up among agents who assist in recruiting/bringing new agents to Keller Williams. In short, Keller Williams has a great business plan that focuses on the fundamental values of society by putting people ahead of profits, which goes to foster a positive society where all concerns are catered to, from environmental to economic.
CSR contrasts with TBL in the sense that the former is an activities-driven model based on putting people first and the latter is an accounting-driven model based on putting profits first. The TBL concept is essentially situated in the modern management maxim that "if you can't measure it, you can't manage it" (Norman, MacDonald, 2003, p. 1). This is why major multinationals like AT&T and Shell "have used 3BL terminology in their press releases" -- they are paying lip service to the idea of social responsibility (and this is nothing new, as all companies do this -- even Enron, which was nothing more than a giant pump and dump: it had an "exhaustive code of ethics" which made it look socially responsible on the outside, though it was...
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