Notes from chapter 1 of The TBL

The following post is made up of my notes from chapter 1 of The Triple Bottom Line by Andrew Savitz.

Questions that need to be considered by business leaders everywhere (Savitz, 6-7).

  1. Do the responsibilities of a business manager go beyond earning the highest possible profits? If so, what are those responsibilities, and how should they be balanced with the pursuit of profits?
  2. What responsibilities does a company have to its workers, their families, the community where they live, and society at large? Is it enough to pay fair wages, provide competitive benefits, and supply needed goods and services–or should a company do more?
  3. What information should be disclosed about corporate decisions and activities to those who have a stake in them? How should the leaders of a company take into account the viewpoints and concerns of those stakeholders? And who should have a say about the fate of the company?

Lessons from the Chocolate Mess (Savitz, 14-17)

  1. Focusing on profit alone can backfire.
  2. Businesses are accountable to more people than they may realize.
  3. Bad things can happen to good companies that fail to take a broad view of accountability.
  4. Stakeholder engagement is an increasingly critical component of successful management.
  5. Politics is an inescapable part of business.

The first chapter was summed up for me in the following statement (Savitz, 18).

“A sustainable company manages its risks and maximizes its opportunities by identifying key nonfinancial stakeholders and engaging them in matters of mutual interest (emphasis added).

Notes from the Introduction of The TBL

I just started reading The Triple Bottom Line by Andrew Savitz.  I plan on blogging some of my notes from the book.

You may ask yourself, “I know what the bottom line refers to (profit), but what is the triple bottom line.” The book’s subtitle says it like this when describing the purpose for the book–“How Today’s Best-Run Companies Are Achieving Economic, Social, and Environmental Success.”

Sustainability is a buzzword right now, and I appreciate how Savitz uses the introduction of his book to clearly define sustainability.  Savitz defines a sustainable corporation as:

“one that creates profit for its shareholders while protecting the environment and improving the lives of those with whom it interacts.  It operates so that its business interests and the interests of the environment and society intersect” (Savitz, x).

Business can be a powerful tool for improving lives, and it is important for firms to step back and evaluate the decisions that they make based on additional criteria.