...CANSU DALKILIC MGMT 311 RESPONSE PAPER 2 32936 There is an ongoing debate on if it is possible to integrate dominant economies with the bottom of the pyramid which are the 4 billion people who have less than 2$ per day. It occurs questions like if it is possible for companies to compete by serving people who counted as bottom pyramid? Is it possible for those poor people to survive by being consumers of MNCs? Prahalad believes that it is a win win for both MNCs and tier 4 (bottom of the pyramid). In other words, he believes that it is possible to sell high quality products to mass number of poor people. Both Prahalad and Karnani want to find solution to alleviate poverty, but they have different approaches to this issue. Prahalad states that we should consider poors as consumers. In contrast to Prahalad, Karnani thinks that rather than viewing the poor primarily as consumers, an alternative approach is to focus on the poor as producers and to emphasize buying from the poor. The only way to alleviate poverty is to raise real income of the poor. Karnani quotes the example of Nirma, a demonstrably inferior product to some of the alternative detergents on the market, such as Surf. It was hard on the skin, and could sometimes cause blisters. And yet it retailed at a third of the price of its competitors, and achieved majority market share from consumers for whom the trade off between price and quality was one that they were happy to make. He concludes: "Insisting on not lowering...
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...In Press, Business Ethics Quarterly Getting to the Bottom of “Triple Bottom Line”* by Wayne Norman and Chris MacDonald March 2003 Abstract: In this paper, we examine critically the notion of “Triple Bottom Line” accounting. We begin by asking just what it is that supporters of the Triple Bottom line idea advocate, and attempt to distil specific, assessable claims from the vague, diverse, and sometimes contradictory uses of the Triple Bottom Line rhetoric. We then use these claims as a basis upon which to argue (a) that what is sound about the idea of a Triple Bottom Line is not novel, and (b) that what is novel about the idea is not sound. We argue on both conceptual and practical grounds that the Triple Bottom Line is an unhelpful addition to current discussions of corporate social responsibility. Finally, we argue that the Triple Bottom Line paradigm cannot be rescued simply by attenuating its claims: the rhetoric is badly misleading, and may in fact provide a smokescreen behind which firms can avoid truly effective social and environmental reporting and performance. Introduction The notion of “Triple Bottom Line” (3BL) accounting has become increasingly fashionable in management, consulting, investing, and NGO circles over the last few years. The idea behind the 3BL paradigm is that a corporation’s ultimate success or health can and should be measured not just by the traditional financial bottom line, but also by its social/ethical and environmental performance...
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...Triple Bottom Line Andrea Ciuffoli Brandman University Financial Reporting and Analysis ACCU 602 Charmaine Felder, Ph.D, CPA June 5, 2015 Triple Bottom Line Introduction On October 22nd 2013, Apple unveiled thinner iPads and faster Mac computers ahead of a competitive holiday shopping season (Gupta & Chan, 2013). The invitation to this unveiling event sent to major members of the press was teasing: "We still have a lot to cover." While millions of people were tuned in to watch Apple’s press release in order to learn about the additional features of the new products that Santa could deliver this holiday season, exactly at the same time, about one million of young people were working under awful conditions such as long hours, low wages and abusive and military-style management, in order to assemble with the highest productivity rate these exciting new devices. This is happening every day at the Foxconn plant in China. Foxconn, a Taiwanese company founded in 1974, in the past decade has gone from being one of many invisible firms in the electronics supply chain to the world champion of flexible manufacturing. Foxconn, the trading name of Hon Hai Precision Industry, is the world’s largest electronics contract manufacturer with ‘annual revenue of $131.6 billion in 2013’ ("Foxconn Hon Hai Income Statement," 2015). It is most widely known as Apple’s largest supplier. Figure 1. Foxconn Hon Hai Precision Industry Co. Income Statement Although the company had an...
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...Introduction Nowadays the society and stakeholders specially are demanding more results from the companies, not only related with financial aspects, but social and environmental aspects, as well. These requirements make a change about the way strategic management is being done, in order to include the triple bottom line. The triple bottom line is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. These dimensions are called the three P´s: People, Planet and Profits. What is the challenge? In the past, each company had to show good financial results in order to be considered successful, no matter if that company used to not take care about the environment or, if it was affecting the society. According with the new world requirements, every single company has to have good results in the triple bottom line: financial, social and environmental. It is no longer permitted for a company having only good financial results; it has to show good results related with the social and environmental aspects, as well. Each company in the world must reveal what their commitments, effort and results related with the financial aspect (affect mainly to the shareholders), social and environmental (affect mainly to the stakeholders) are. The financial aspect is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from...
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...Executive Summary This report provides an analysis and evaluation of Triple Bottom Line (TBL) accounting. Many corporations adopt and follow the novel term, along with the public increasing public concern of social and environmental performances. The research pays attention to the arguments for and against the TBL accounting in corporate accounting reporting. Many companies concur with the significance of concept to reinforce their business, yet others hold the view that TBL is accompanied by diverse debates. The findings of this review show that TBL accounting: • Refers to a good tool of the measurement of accountability and transparency • Provides a beneficial opportunity to obtain the value of a corporate name and the market share in completion • Contributes to the reduction of production cost and the conservation of environment through making use of resources efficiently • Improves corporate management and employee productivity due to the measurement of accountability and transparency • Impacts on a core competency of business and a social situation • Adjusts a methodology to measure social and environmental performances TBL accounting with economic, social, environmental activities has been some negative thus far. However, the arguments against TBL accounting, which are related to core competency, poor societies and measure standard, are still doubtful and cannot address a strong persuasive in opposition to...
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...The double bottom line refers to two bottom lines, one is the ability of a nonprofit organization to be able to pursue its mission and its success be measured in its ability to achieve that mission, and second is the financial bottom line which is to maximize profit in order to increase the organizations value. Nonprofit managers often have to deal with the organizational trade-offs between mission, and the acquisition of resources. The success of nonprofit managers must be measured by both lines because nonprofit organizations rely on both bottom lines. Nonprofit organizations are born from a need that people are seeking to remedy, for most nonprofits this need tends to become its mission, their very reason for existing. Nonprofits are defined...
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...The Triple Bottom Line: How Today’s Best-Run Companies Are Achieving Economic, Social, and Environmental Success— and How You Can Too I chose this book because the title drew my attention since the beginning. When I read the title I understood that in this book the Author’s were going to talk about how big corporations deal with sustainability. That for me was really important, as sustainability is such a hard concept to grasp. I believe that the best way to understand about sustainability is with examples and cases that happen in real life. On this book Andrew Savitz and Karl Weber, put all their vast experience and knowledge in sustainable practices and recollect big cases of the corporate world and study them. Some events are about mistakes the corporations did when they failed to understand the Triple bottom Line in their business decisions. Others are great examples of how companies found the “sustainability sweet spot” (a concept of them) and were able to achieve success not only economical, but also social and environmental. The purpose of the authors is to inform and educate the reader about how a company needs to balances social economical and environmental growth on todays world. The books starts with an important introduction, explaining what it is sustainability or at least they try as like I said before is such a hard concept to calculate. Where I believe they nail their explanation is when they start telling us what a sustainable company is and what...
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...Analysis on triple bottom line and systems theory Corporate social responsibility is one of great debate for many years. Nobel prize-winning economist Milton Friedman believes the corporate responsibility a business has is to its shareholders making a profit, while Michael E. Porter and Mark R. Kramer believes businesses and society are interwoven (Newton, 2012). The purpose of this analysis is to analyze the ways in which systems theory and triple bottom line theory support or negate each other. First, the analysis will analyze CSR. Second, it will analyze how systems theory and triple bottom line theory support each other. Third, the analysis will analyze how systems theory and triple bottom line theory negate each other. Some companies believe corporate social responsibility builds good reputation and customer loyalty. Years ago corporate social responsibility was just about making a profit and providing employment. Today corporate social responsibility is more than just the bottom line. It is being involved in the community and being a benefit to society. Corporate social responsibility is the obligations of a business to society. Two types of corporate social responsibility theories are triple bottom line and systems theory. According to Savitz and Weber (2006), triple bottom line captures sustainability by measuring the impact of an organization’s activities on the world; this includes social, environmental, and financial performance (people, profit, and planet)...
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...Created Theory: Ethical Bottom Line Introduction The Ethical Bottom Line Theory is developed on the bases of the case study and CSR theories and the traditional concept of accounting system. In traditional business accounting and common usage, the "bottom line” refers to either the “profit” or “loss”, which is usually recorded at the very bottom line on a statement of revenue and expenses. The Triple Bottom Line was coined by Elkington (1994) to introduce the full cost accounting method. For example if a corporation shows a profit but their production pollutes the river, and the government ends up spending taxpayers’ money for rehabilitation programs. So the Triple Bottom Line was coined to address the issue. The triple bottom line incorporates the notion of sustainability into business decisions. The TBL is an accounting framework with three dimensions: social, environmental (or ecological) and financial. The TBL dimensions are also commonly called the three Ps: people, planet and profit and are referred to as the "three pillars of sustainability". Interest in triple bottom line accounting has been growing in both for-profit, nonprofit and government sectors. Many organizations have adopted the TBL framework to evaluate their performance in a broader context (Elkington, 1994) Ethical Bottom Line theory condenses the Triple Bottom Line of Elkington (1994) framework and integrates the Stakeholder Theory. Brief Description of the Theory The theory condenses...
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...Top-Down, Bottom-Up and Metacognition – Discovering the Mind Angelica Lipscomb PHYC102-1402B-10 Robin Redfern June 15, 2014 Abstract In scientific psychology the question of how information is processed is achieved by asking to what amount a psychological procedure is motivated by top-down as opposed to bottom-up information. The difference between top-down and bottom-up processing is commonly used in experimental psychology. Top-down processing proposes that we form our observations starting with a bigger objective, thought, or knowledge before working our way in the direction of more thorough information. Bottom-up processing, also identified as "small chunk" processing, proposes that we attend to or identify essentials by beginning with the slighter, finer specifics of that component and then move upward until we have a firm illustration of it in our minds. Top-down processing is also identified as conceptually-driven processing, because your observations are swayed by anticipations, beliefs, and perceptions. Sometimes people are mindful of these encouragements, but in other cases this procedure happens without mindful cognizance. Top-down processing can be useful when we are searching for similarities in our environment, but it can also obstruct our capability to recognize things in diverse ways. Our prejudice toward observing things in a particular way is recognized as a perceptual set. A good example of top-down processing is the sentence that is traveling around...
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...The Bottom Billion The development of the poor countries has been a challenge during the past decades. The world consists of one billion rich people and five billion poor people. Most of five billion live in countries that are developing. However, there are one billion people that live in countries that are falling behind and even apart. These countries are facing a bigger problem that one can imagine. The world is becoming globalized. Countries are reducing import quotas and export fees facilitating trade with each other. Also, countries are starting to provide resources, materials and technology to each other allowing them to develop at amazing speed. On the other hand, the bottom billion countries are diverging from this economy, since they are stuck in one of the four traps. The four traps are the conflict trap, the natural resource trap, the trap of being landlocked and the trap of bad governance in a small country. These traps will not allow billion bottom countries to become globalized; however, it can be argued that some of these traps can facilitate the incorporation of a country to world’s economy. Currently, most of the bottom billion people live in African countries. The major problem with these countries is not that they are poor, but that they are not developing. In fact, most of the bottom billion countries are experiencing negative growth and the living standards are lowering each year. These countries are declining on average 0.5 percent per year. Furthermore...
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...The History of the American Bottom Two of the nations largest rivers meet in the American Bottom. The Mississippi and Missouri Rivers served as channels of change to the area, bringing outside influences of many different peoples to an Indian-inhabited land. Like the constant flow of the rivers, there was a constant change in the American Bottom. The progress eventually developed the area into a center of economic activity and gateway to the west, but also excluded native and long-time residents. The Illinois Indians long dominated the American Bottom. They were a unique and special tribe, who were complex politically, religiously, and socially. They were also an independent people until French colonizers came to settle in the area. The French Creoles became the dominant population in the region, effecting trade and implementing French Creole culture in the region. The French would not be the last group trying to develop and profit from the American Bottom. When the United States gained control of the territory, it changed even further and eventually Americanized into an U.S. State. The importance of the region increased as the U.S. continued to grow westward. The American Bottoms location between the two great rivers made it the ideal location for a center of economic growth. Prior to the contact period, or the time when the Illinois first came into contact with Europeans, the Illinois were a great and influential tribe. They were a very interesting tribe who had a culture...
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...Marketing to the Bottom of the Pyramid Until recently, the least important market segment has been the most poor, lower-income individuals and families. According to Professor C.K. Prahalad, the “bottom of the pyramid”, also referred to as the BOP, is made up of nearly 4 billion people who survive on $2 a day or less. Making up approximately a quarter of the world’s population, these four billion people hold $14 trillion in purchasing power and this group is growing each year. In the past, this market segment couldn’t afford to purchase most products and were definitely not looking at the latest and greatest technologies. However, with some markets becoming more and more competitive, potential for making more profit from bottom of the pyramid consumers began to grow. Today, more and more stores such as Wal-Mart specifically cater to low-income families, just as Sears Roebuck had. Companies such a Singer offering payment plans for consumers who purchased their sewing machine led the way in marketing to this group. It seems that as time goes on, the BOP seems to have access to more and more higher end products that they once couldn’t afford. While the process of marketing to the BOP has proven to turn a profit, marketers need to keep in mind the challenges that they face in regards to offering advanced technology, financing, distribution, and packaging. One challenge that many companies faced was being able to create technologically advanced products that could be made affordable...
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...ESSAY ONE MAKING CONNECTIONS DRAFT Bottom of the pyramid (BOP) refers to refers to the poorest yet largest economic group in the world as it shows on figure 1. This was a term introduced by http://recyclewashington.files.wordpress.com/2010/05/graphic-world-economic-pyramid-web1.gif?w=510 http://recyclewashington.wordpress.com/category/economics/ These income values are based on the purchasing power in US dollar, and the BOP represents the tier 4 which earns less than $1,500 a year per head. This economic group however represents 4 Billion people which is larger than all other groups combined. Countries that can be referred to as BOPs include countries like Niger which has a GNI per capita of $701 http://hdrstats.undp.org/en/countries/profiles/NER.html or Afghanistan with a GNI per capita of $1000 http://hdrstats.undp.org/en/countries/profiles/AFG.html. There is a high correlation between countries with low GNIs http://hdrstats.undp.org/en/indicators/103606.html and Third world countries http://www.nationsonline.org/oneworld/third_world.htm therefore we are able to identify similarities amongst them whether cultural, environmental or economic. The Bottom of the pyramid strategy is a modern strategy introduced by Coimbatore Krishnarao Prahalad. He believes that that multinational companies not only can make money selling to the world’s poorest, but also that undertaking such efforts is necessary as a way to close the growing gap between rich and poor countries. Key...
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...Schumpeter The bottom of the pyramid Businesses are learning to serve the growing number of hard-up Americans Jun 23rd 2011 | from the print edition MANAGEMENT gurus have rhapsodised about “the fortune at the bottom of the pyramid” in emerging markets ever since C.K. Prahalad popularised the idea in 2006. They have filled books with stories of cut-price Indian hospitals and Chinese firms that make $100 computers. But when it comes to the bottom of the pyramid in the rich world, the gurus lose interest. This is understandable. McDonald's and Walmart do not have the same exotic ring as Aravind Eye Care and Tata Motors. The West's bottom-of-the-pyramid companies are an unglamorous bunch. Many rely on poorly educated shift workers. Some inhabit the nether world of loan sharks and bail bondsmen. But even in one of the world's richest countries the hard-up represent a huge and growing market. The average American household saw its real income decline between 2005 and 2009. Millions of middle-class Americans have been forced to “downshift”, as credit dries up and the costs of college and health care soar. Some 44m Americans live below the official poverty line ($21,954 a year for a family of four). Consumer spending per household fell by 2.8% in 2009, the first time it had fallen since the Bureau of Labour Statistics started gathering data in 1984. This is a challenge to the American dream. But it is also an opportunity for clever companies. Even the poorest Americans are rich by...
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