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Judging OPERATiOns PERfORmAnCE AT A sOCiETAl lEvEl? 51
the triple bottom line

One common term that tries to capture the idea of a broader approach to assessing an
organisation’s performance is the ‘triple bottom line’ (TBL, or 3BL), also known as
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‘people, plant and profit’. Essentially, it is a straightforward idea, simply that organi-
sations should measure themselves, not just on the traditional economic profit that
they generate for their owners, but also on the impact their operations have on society
(broadly, in the sense of communities, and individually, for example, in terms of their
employees) and the ecological impact on the environment. The influential initiative
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that has come out of this triple bottom line approach is that of ‘sustainability’. A sus-
tainable business is one that creates an acceptable profit for its owners, but minimises
the damage to the environment and enhances the existence of the people with whom it
has contact. In other words, it balances economic, environmental and societal interests.
This gives the organisation its ‘license to operate’ in society. The assumption underlying
the triple bottom line (which is not universally accepted) is that a sustainable business
is more likely to remain successful in the long term than one which focuses on eco-
nomic goals alone. Only a company that produces a balanced TBL is really accounting
for the total cost of running its operations.

The social bottom line (People) – the social account, measured by the
impact of the operation on the quality of people’s lives
The idea behind the social bottom line performance is not just that there is a connec-
tion between businesses and the society in which they operate – that is self-evident.
Rather it is that businesses should accept that they bear some responsibility for the
impact they have on society and balance the external ‘societal’ consequences of their
actions with the more direct internal consequences, such as profit. At the level of the
individual, social bottom line performance means devising jobs and work patterns that
allow individuals to contribute their talents without undue stress. At a group level, it
means recognising and dealing honestly with employee representatives. In addition,
businesses are also a part of the larger community and, it is argued, should be recognis-
ing their responsibility to local communities by helping to promote their economic
and social well-being.
Some ways that operations can impact the social bottom line performance include
the following.
● Customer safety from products and services
● Employment impact of an operation’s location
● Employment implications of outsourcing
● Repetitive or alienating work
● Staff safety and workplace stress
● Non-exploitation of developing country suppliers

The environmental bottom line (Planet) – the environmental account, measured
by environmental impact of the operation
Environmental sustainability (according to the World Bank) means ‘ensuring that the
overall productivity of accumulated human and physical capital resulting from devel-
opment actions more than compensates for the direct or indirect loss or degradation of
the environment’. Put more directly, it is generally taken to mean the extent to which

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