MEASURING ORGANIZATIONAL PERFORMANCE: BEYOND THE TRIPLE BOTTOM
The following report is a summary of the investigation of an investigation of Graham Hubbard from the University of Adelaide, Australia on "Measuring Organizational Performance" specifically beyond the triple bottom line. The report will have the following points:
History in organizational performance measures systems.
The Triple Bottom Line.
Current sustainability report practice.
The sustainable Balanced Scorecard.
History in organizational performance measures systems.
The last two decades there is a change in the way the organizations measure their performance, but it is necessary to have a knowledge of the most common strategies used to measure performance both "high-performing" firms and "low-performing firms".
Balanced Scorecard: The theory added more stakeholders to the measuring of the performance of the company, there are not only the shareholders as the only stakeholders of the company, but the providers, employees, suppliers, government, communities and others (Kaplan R, 1992). The strategy considers developing and learning factors as financial, customer market relation, efficiency, and learning.
The Triple Bottom Line.
The triple bottom line has a wider impact than the stakeholder economic performance. The triple bottom line has a triple stakeholder's perspective. There is the economic, environmental and social impact of the performance company on the stakeholders. The economic impact is based on the yearly results of the financial statements on the stakeholders. The environmental impact is based on the required natural resources to have the previous economic results of the company and how the company impacts by the sub-products the company added to the atmosphere, water, and soil. The social impact considers the influence the company and its suppliers have over the community where he produces its goods and services or where it sells them. The triple bottom line considers a minimum mark for each perspective. The failure in one of the three perspectives will make fail the company as a whole.
The strategy of the Triple Bottom Line was not successful in the penetration of organizational performance systems. The complexity of the application and the dominance of the economic results from the other two perspectives made difficult to managers to apply it.
Current Sustainability Report Practice:
The sustainable Balanced Scorecard
One possible solution to measure the environmental and social impact of the company is to include these two perspectives in the basic configuration of the Balanced Scorecard created a new Sustainable Balanced Scorecard having integration between the Triple Bottom Line and the Balanced Scorecard (Yongvanich K, 2006). A hypothetical example of a sustainable, balanced scorecard is in Table 1.
References
Kaplan R, N., 1992. The Balanced Scorecard. s.l.:Harvard Business School.
Owen, D., 2006. Emerging issues in sustainability reporting. s.l.:Business Strategy and the Environment.
Yongvanich K, G. J., 2006. An extended performance reporting framework for social and environmental accounting. s.l.:Business Strategy.
