7-1 Executive Summary

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1 7-1 Executive Summary: Triple Bottom Line as an Ethical Framework Matilda Mackenzie Southern New Hampshire University MBA 500: Building Business Leaders Mike Humphrey November 5th, 2023

2 Advantages of adopting the triple bottom line model There are several things that our company stands to gain by adopting the triple bottom line business model. During this transition, ABC Beauty’s leaders have shifted their focus to include concerns of sustainability and stewardship when making decisions for the future. By adopting this mindset, we intend to bring positive change for our stakeholders which include our employees, customers, owners, and all other involved parties (Schermerhorn & Bachrach, 2020). One advantage of adopting the triple bottom line model is that we will be the first in our industry to do so, giving us the first mover advantage. Our investors will be pleased to know that by being the first company to incorporate sustainability and social responsibility in our business practices, ABC Beauty will gain brand recognition, customer loyalty, and a majority market share before our competitors attempt to follow in our footsteps (Tarver, 2020). Another advantage is how our employees will benefit from the triple bottom line model. Part of the people aspect of the triple bottom line is not only about our commitment to the communities that we serve, but to the people who have worked so hard to help us achieve this vision. By adopting the triple bottom line, ABC beauty is committed to ensuring that our employees have fair wages, equal opportunity, security, and satisfaction in their work. Last but not least, our customers will be excited to see that our company is adopting the triple bottom line business model. In recent years, consumers have expressed a growing concern regarding the ways that corporate practices affect people and the environment (Schermerhorn & Bachrach, 2020). Demonstrating our commitment to social responsibility and sustainability will not only show our customers that we’ve heard their concerns and are taking them seriously, but it

3 will provide them with an opportunity to help enact change by choosing to shop at a company that gives back to people, communities, and the environment. Disadvantages of adopting the triple bottom line model While there are a multitude of benefits that come with adopting the triple bottom line, we recognize that there will be challenges associated with the change. One disadvantage to adopting any new business model is the cost that is incurred before profits can be regained. It is reasonable to expect that our expenses will increase while we test new sustainable products and partnerships; however, if we’re successful, we can expect our end profit to outweigh the initial cost of investment. Another challenge that we anticipate is finding appropriate methods of measurement. While profit can easily be measured using quantitative methods, our impact on people and the planet will require a different variety of key performance indicators. Fortunately, we have tools such as the balanced scorecard that can assist with this process. Using a balanced scorecard to measure to measure TBL performance The development of social metrics was first discussed in the early 2000’s as a way to measure a company’s impact on the environment in a way that makes sense in the business world (Thomas & McElroy, 2015). However, adopting new scales of measurement encouraged the development of a multicapital scorecards, such as the balanced scorecard, which can be used to compare a company’s success in many areas such as people, planet, and profit. A balanced scorecard can assist with measuring TBL performance by consolidating data from multiple variables into a single report which is easier for comparison. Through this process, our management at ABC Beauty can identify areas of operation that require improvement and communicate that information across departments.

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4 References Schermerhorn, J. R., Jr, & Bachrach, D. G. (2020). Management . John Wiley & Sons. Tarver, E. (2020, January 15). First Mover: What it means, examples, and first mover advantages . Investopedia. https://www.investopedia.com/terms/f/firstmover.asp Thomas, M., & McElroy, M. W. (2015). A Better Scorecard for Your Company’s Sustainability Efforts. Harvard Business Review Digital Articles , 2–6

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