In the article, “First Make Money. Also Do Good” Steve Lohr compares Milton Freidman and Michael Porter’s philosophy regarding triple bottom line and corporate social responsibility. Friedman suggests that companies only pretend to care about their social responsibility to maximize profitability. Conversely, Porter promotes the concept of shared value. The shared value principle states that a company will seek opportunity from solving social issues.
This diagram illustrates the relationship between Corporate Social Responsibility and Corporate Shared Value.
Moreover, it is a common misconception that triple bottom line companies[1] addressing corporate social responsibility issues will be unsuccessful and less profitable than competing companies. In my opinion, in the upcoming years more and more companies will utilize Porter’s shared value approach to economics. Sustainability is becoming a global issue because as the population increases exponentially there is a proportional increase in demand for products. Therefore, companies that require scarce resources must take initiative in developing sustainable practices. For instance, Cascade Engineering recognizes that the global energy market is depleting. Therefore, Cascade is striving to minimize their environmental footprint by committing to ISO 14001 standards: reducing waste emissions into the air, land and water.
In summary, the overall goal of any company is to be profitable. However, profitability does not have to compromise the social, environmental and financial aspects of a company. Michael Porter’s shared value concept allows companies to address the triple bottom line and CSR[2] while becoming profitable in the process.
[1] Triple bottom line: (abbreviated as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and financial. These three divisions are also called the three P’s: people, planet and profit, or the “three pillars of sustainability”.
[2] CSR: Corporate Social Responsibility
Sources Used:
Lohr, Steve. “First, Make Money. Also, Do Good.” International New York Times 11
Aug. 2011: n. pag. Print. Click Here: For Link
Triple Bottom Line Dictionary Definition. Click Here: For Link
Class 15: CSR and Sustainability Notes