The core objective of a firm has remained to maximize their profits and their shareholders’ value. Since many years organizations have operated to achieve financial benefits from their business activities. However, globalization has imposed innumerable challenges on these companies making it difficult for them to compete. Today, to achieve business success it is crucial for organizations to not only focus on financial performance, but also evaluate their non-financial measures such as their ethical, social and environmental responsibilities. Many companies have shifted their focus from solely relying on their financial performance to adopting a three-dimensional approach. These dimensions include social, environmental and financial. The concept has emerged lately to ensure sustainable operation of businesses. Organizations need to establish strategies that emphasize on the implementation of TBL.
Different aspects of TBL deal, particularly, with 3 Ps: people, planet, and profit. While employees are critical to the success of a company, customers are also equally important for generating sales revenues. Similarly, other people directly or indirectly involved in the business process are extremely important for business including shareholders, society, and suppliers. Companies that follow TBL assess the impact of their business on the environment as well. Thus, these companies are focused on eliminating the cost they impose on the environment in the form of pollution. At the same time, they also ensure to minimize the use of energy and they safely dispose of out any toxic waste to ensure environmental safety. This helps them in meeting their corporate social responsibility and increase the goodwill of the company.
Focusing on all three business aspects helps firms in meeting their organizational objectives completely. They do not only emphasize on earning profits but at the same time are motivated to deliver the benefits to the community. All the stakeholders of the business are devoted to delivering value to the entire society. While sustainability has been a measured goal for; for-profit organizations, non-profit organizations, and government, it has been difficult to measure sustainability. Therefore, this TBL framework emerged in the mid-1990s developed by John Elkington. The framework went beyond traditional measures of profits, returns on investment and shareholder value to include environmental and social dimensions. This can be used an essential tool by firms for achieving their sustainability goals.
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