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Which Business Model Is Best for People, Planet and Profits?

Free «Which Business Model Is Best for People, Planet and Profits?» Essay Sample

Introduction

In the modern world, the operation of any business should be based on the components of the triple bottom line (TBL). The elements of are the planet, the people, and the profit; the principal intent is to measure the financial performance of an enterprise, as well as assess its social and environmental impact in a given period. Traditional business operations only centered on profit and ignored the other two concepts, which have proved to be very critical based on the research in recent days (Bocken and Short 54). If positive effects are known to the business, then the stakeholders can implement their strategies in monitored conditions. If a business entity is concerned with performance, they should develop the three bottom lines, which involves profit, people, and the planet. In this regard, the business should assess its profit and loss accounts to determine its chances of success (Wilson and Post 725). Next, the company should be concerned with its social responsibility, which directly benefits the people. Finally, the business should engage in environmentally responsible production processes, handing the planet aspect. Given that the perspective of the three elements ought to be considered, Corporate Social Responsibility (CSR) seems more efficient than the Workers Cooperative model. The adoption of the CSR is preferable to the Workers Cooperative model, which can be proven by using the three factors, including environmental responsibility, profitability of an organization, and discharge of social responsibility.

Part 1

Given the problems that face the contemporary business world, it is essential for some measures to be employed to mitigate the everyday challenges. In this respect, the input that is given by the Workers Cooperative will be more desirable for solving such issues. Based on the standpoint of the Coop view, it is impossible to resolve all the underlying challenges that lie within the realm of the triple bottom line. “The Coop view can only adequately solve the issues that revolve around the profit and this benefit the stakeholders alone” (Dyllick and Muff 158). In spite of all this, the Coop view acknowledges the existence of the triple bottom line though it is tough to implement it from this viewpoint. The importance of incorporating the triple bottom line is widely encouraged within the setting. Most organizations continue engaging in the business practices that ignore environmental regulations. They employ the Coop view, which implies that they are only conscious of the stakeholders’ interests. Due to this fact, they fail to attend to the other two critical aspects that render this paradigm unconscious. Though they address the issue of profitability, corruption, inequality, and vulnerability of workers, the primary concern is that they fail to solve the environmental problems.

Within the realms of the Mondragon case, this can provide a clear outlook on how the Coop view works. Ideally, this cooperative has more than 80,000 employees. Thus, it solves the issue of inequality by creating job opportunities. The principle applied to the running of the firm’s affairs is that the workers are in a position to make the decisions regarding the operations of the business. “Workers are still the members of this cooperative and possess a share of the firm, participate in making principle decisions, and elect their managers” (Bocken and Short 58). Though there are some differences in earnings between the low ranked employees and the executives, the range is subtle. Accordingly, this is an indication that the firm is concerned with the welfare of every stakeholder, including the shareholders. It makes them feel a sense of identity and pride when they can identify with the firm. COnsequently, they resolve the issue of inequality in income distribution and profitability of the business.

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CSR is a significant model necessary for the running of business enterprises. In fact, this paradigm reflects the modern issues and is geared towards resolving them. In the first place, the model is conscious of the environmental problems, such as pollution, providing services to the community by being socially responsible and scaling the profit margins. Businesses are not only supposed to show concern for their finances, but for people and the planet (Dyllick and Muff 159). CSR is an excellent approach to covering all the triple bottom line elements. The model stems from an understanding that focusing on the aspects of people and planet will not prove disastrous to businesses. In the long run, the design will be favorable to the side of companies, because it will draw a large customer base. People seek to be associated with the companies that show their commitment on all three fronts. Businesses are encouraged to measure their social and environmental responsibilities the same way they do with their monetary resources. The idea will help preserve their brand name along with promoting their corporate image.

From the viewpoint of FSC, voluntary compliance to the idea of social and environmental responsibility cannot be the only option. Nevertheless, voluntary compliance can be useful for the firms given the associated competitive advantage that it creates. FSC seems reasonable, because it handles the environmental, social, and economic concerns. The availability of FSC certification is good for organizations since it strengthens their potentials to access the markets. The public image of the organization is likewise augmented, which brings high revenue streams (Wilson and Post 721). According to the analysis, one may understand that this is helpful to the business based on the standpoint of the triple bottom line. Primarily, the strategy satisfies the people by being socially responsible, meeting the regulations regarding environmental conservation, and helping the firm realize its profit levels.

Part 2

According to an understanding of the underlying concepts, CSR is best suited to solving the current economic issues as compared to the Workers Cooperative. The fundamental problems, in this case, is the environmental unsustainability, corruption, inequality, and vulnerability, particularly among workers. If the issues that are related to fraud are resolved, this will help to curb the harm that is imposed on communities, customers, and workers. The same applies to developing measures that counter the concepts of inequality and vulnerability among employees. It is important to note that CSR outperforms Workers Cooperative when it comes to the matters of social and environmental responsibilities (Buchholtz and Carroll 43). In the case of Workers Cooperative model, employees are the shareholders and make every decision regarding the execution of the functions. “All decisions are made to favor the establishment, and this does not consider the surrounding communities” (Buchholtz and Carroll 43). However, they may fail to engage the environmental impact assessment, which is indeed fatal for the paradigm. Thus, the values and principles set up by the shareholders to achieve the organizational goals only gain profit for them without the consideration of the other two aspects. The problem is that this model lacks a structure that is specifically designed to accommodate social and environmental responsibility. This highlights its primary weakness, which makes it undesirable for adoption.

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Notably, when organizations conform to the CSR, this implies that apart from being aware of the profits, which they ought to generate to thrive, these businesses are conscious of the fundamental laws of society that are ingrained in the ethical frameworks. If an organization does not care about its consumers, workers, community, and the environment, then it is not conscious of its long-term goals. Every successful organization has achieved this through the input of a sound environment, people, workers, and the community at large. Showing care to all the aspects of the triple bottom line remains a crucial consideration. The organization’s shareholders initiate this and are informed by corporate culture. Given the importance of CSR, it is enshrined in the law. “The Companies Act of 2013 requires firms at a given level of profitability to engage in the corporate social responsibility activities” (Wirtenberg 61). Such organizations are supposed to create a committee which would design the objectives and derive the means to monitor the processes. Some of the goals are derived from elements such as environmental sustainability, sanitation, health, education, and training. All these activities are not aimed at the welfare of the company workers, but at external stakeholders instead. Many companies have adopted this model due to its well-rounded nature.

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Part 3

Despite the strengths that are associated with the CSR paradigm, it still has some deficiencies. For instance, the implementation of this model leads to difficulties in the course of its functioning. The model requires a change in some processes and additional personnel. Consequently, the increased staff members raise the overall expenditure, which can be taken as an advantage by rival businesses. Given that the money used to cater for all the spending comes from the shareholders, this may seem like a reduced profit margin to them. In some cases, the measures have increased costs, but provided subtle quantifiable returns (Buchholtz and Carroll 35). Additionally, the cumbersome process involved might be an advantage to the rivals in the same industry. However, this can be improved upon by adopting a number of measures. “Concentrating on erecting the firm’s image is much critical in luring the investors which expands the capital base for the organization” (Wirtenberg 42). The increased capital base will help the organization to cater for the additional expenses that will have to be incurred. If the government of the country will wish to invest in the company, this is likely to lead to reduced regulations, which is good for business.

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