Answer

Table of Contents

Executive Summary. 3

Introduction. 5

Main Body. 6

Current Trends in Triple Bottom Line. 6

Case Studies. 8

Company1: North Grumman Corporation. 8

Social 9

Economic. 9

Environmental 10

Company 2: Wells Fargo. 10

Economic. 11

Environmental 11

Company 3: Starbucks. 12

Economic. 12

Environmental 13

Social 13

Recommendations for Multinationals. 14

Conclusion. 17

Reference List 18

Executive Summary

This report describes triple bottom line approach and increased engagement of stakeholders and the growing use of technology among Wells Fargo, Starbucks, and Northrop Grumman Corporation. More sustainable business demands that the economic, environmental, and social issues are incorporated in various aspects of business operations. Multinational corporations continue to feel the pressure from stakeholders to solve environmental and various social elements at different levels of their activities. Some of the operational issues that they are required to address include the ability to deal with risks (social and environmental) and improve performance (economic). As a result, many global corporations have paid more attention to the triple bottom line (TBL) to deal with social, economic, and environmental issues to ensure they remain sustainable in the global arena.

Triple bottom line entails corporate communication with stakeholders that an organization undertakes to manage the social, economic, and environmental aspects of its activities and offer relevant information on these aspects (Savitz 2013). TBL provides numerous benefits to multinational corporations, including increased performance, reputation, and public image, among others (Longonioooo, and Cagliano. 2016). Currently, many trends are witnessed in the triple bottom line, particularly for global companies. In particular, there has been the increased engagement of stakeholders and the growing use of technology among Wells Fargo, Starbucks, and Northrop Grumman Corporation. These firms have shifted their focus from generating profits at the expense of people to ensuring that people’s welfare and corporate social responsibility are achieved. To deal with these trends, the organizations have adopted their business strategies to ensure that their actions resonate with TBL frameworks. As a result, their reputations have been boosted and increased brand awareness.

In the future, it is expected that firms that pay attention to TBL will stand out as compared to others ignoring it. They will have increased sales, low operational costs, and attract and retain a competent workforce due to their positive image and high reputation. Thus, firms should adopt TBL not as an exercise meant to build image but as a source of competitive advantage to achieve sustainable business growth and development. Moreover, they should adopt TBL in the local context and pursue new business opportunities.

Current Trends of Triple Bottom Line among International Companies

Introduction

             In the 20^th century, there have been several social and environmental events aimed at raising awareness about the impacts of business activities on environmental change and social inequalities (Carroll, and Shabana 2010). The media has continued to stress the effects of human effort by informing governments and consumers about their purchase practices, making the society progressively aware of sustainable issues (Adams, and Geoffrey 2009). The risks of permanent destruction to ecological systems, coupled with the revelation of manipulative labor practices through global supply chains, have piled pressure on governments and international companies to formulate new labor and environmental regulations. To achieve their business interests and safeguard the common good in the long run, foreign companies have adopted the triple bottom line.

Triple bottom line entails corporate communication with stakeholders that an organization undertakes to manage its social, economic, and environmental activities and offer relevant information on these activities (Bergenwall, Chialin, and Richard 2012). It comprises of profit, people, and the planet and seeks to measure the social, financial, and environmental performance of a firm over a given timeframe (Azevedo, and Miguel Barros 2017). Primarily, triple bottom line companies strive to benefit millions of constituencies as opposed to endangering or exploiting them. They also aim to help the natural order and try all means possible to avoid harm and reduce environmental impact (Bohmholdt 2014). Permanently, the trend towards better accountability and transparency in public reporting has been depicted in disclosing a detailed performance that encompasses social, environmental, and financial factors (Painter-Morland 2006). Therefore, using cases of Starbucks, Wells Fargo, and Northrop Grumman Corporation, this paper examines and describes current trends in triple bottom line among these firms and establishes how these companies have designed their business strategies around the triple bottom line. It also offers to understand the future of businesses with or without paying attention to issues related to the triple bottom line.

Main Body

Current Trends in Triple Bottom Line

             Studies have indicated that the triple bottom line continues to gain some foot hole in the multinational corporations partly by the fact that the law requires these corporations to incorporate the voices of stakeholders that fall within the social, economic, and environmental boundaries (Callahan 2007). Among the internal processes that these multinational corporations use to achieve the concept of inclusion encompass strategic visioning and planning, asset management, performance metrics, as well as service levels and target identifications. A sustainable business demands that economic, environmental, and social issues must be incorporated into the supply chain management of multinational corporations (Callahan 2007). Currently, international firms are being pressed by stakeholders to deal with environmental, as well as social aspects at various tiers within their supply chain.

            In the past, multinational corporations focused on profits or benefits. Reports indicated that some wanted to serve only financial or shareholders statements (Flores et al. 2017). However, currently, Margolis, and James (2003) argued that it is hectic for such corporations to achieve that by ignoring the environment, social, and other stakeholders. The reasoning is that it is a short term approach and that using it will make such an organization to face backlash from stakeholders and other concerned parties (Ho, Wang, and Vitell 2011). As such, to sustain economic businesses, multinational corporations changed their benefits of financial forms to ethical perspectives to care for society, people, and the environment as a whole (Harvey and. Ronald Buckley 2002). In particular, they have engaged in competitive businesses by offering reasonable prices, services, and products to enhance the quality of life to achieve customer satisfaction. In return, there has been a significant decline in environmental impacts on areas where these corporations operate (Hubbard 2009).

            The engagement of stakeholders is another current trend in the triple bottom line. Recently, stakeholder involvement in multinational corporations has gained momentum. Stakeholder involvement is no longer about seeking public views and holding a public hearing but rather an identification of public concerns and values, establishing effective and viable solutions through a transparent and open process, and striking an agreement among the groups affected (Onyali 2014). Rushton (2002) contended that most multinational corporations have mastered the art of engaging stakeholders in their planning processes because they believe that stakeholder’s knowledge of ecological, economic, political, and social situations can provide a means through which the established plan can be measured. By engaging stakeholders in their operations, multinational corporations have been able to formulate goals, problems, and remediation approaches to simplify what is regarded as desirable and achievable (Hubbard 2009).

Technology innovation is the next trend in the triple bottom line among multinational firms. Using technological devices is nowadays mandatory for global companies because it is believed that technology saves time, reduces costs of running a business, and ensures perfection and excellence to work (Onyali 2014). Most international companies have adopted the use of technologies to gain competitive advantages over their competitors in the market (Onyali 2014). By using technological tools, the corporations have remained updated, improved their production and manufacturing, and reduced cases of redundancies (Harvey and Ronald 2002). Scholars have argued that adopting modern technological solutions have relatively high initial human and economic costs to multinational corporations (Onyali 2014).  However, a study by Montes-Stewart (2013) has revealed that the adoption of new technologies by international companies has increased the effectiveness and efficiencies of projects that such companies undertake and that the risks of delays are always lurking. To avoid the stated delays, firms should implement technological paths they intend to consider before planning for the projects (Singhapakdi et al., 1996).

Case Studies

            In this report, three companies will be discussed. One is the Northrop Grumman Corporation, a multinational company that specializes in defense and electronics, commercial aerospace, and information technology services and products. Next is the Wells Fargo, an American multinational financial and banking services corporation situated in San Francisco. The last is Starbucks, an international coffee company that offers tea and coffee, handcrafted beverages, fresh foods, and merchandise.

Company1: North Grumman Corporation

            Northrop Grumman Corporation is a multinational company headquartered in Los Angeles that specializes in defense and electronics, commercial aerospace, and information technology services and products. The firm produces military radar systems including electronic countermeasure systems, airborne fire control, and early warning radars. It is the leading supplier of airspace management systems for various countries across the globe. With over 120000 workers and operations in more than 25 countries, Northrop Grumman serves the American and international military, government, and commercial clients. Like other Fortune 500 companies, Northrop Grumman has developed its business strategy around stakeholder engagement, technology and innovations that form key trends in the triple bottom line framework.

Social

            From a social perspective, it has adopted several approaches to involve and care for its stakeholders, especially employees. It offers health insurance, education help, and short term disability for its employees. It also participates in various high priority defense and government programs. It also serves the community where it operates and also assists the environment where its global customers are located.  Northrop Grumman has developed its business strategy around current trends in the triple bottom line framework. It clearly understands how to manage the three dimensions of the triple bottom line. Socially, the corporation has involved its stakeholders in its activities. It has adopted technology solutions to offer health insurance covers such as medical, vision, and dental to its employees. This strategy implies that the company has attracted a pool of competent workers who want to work for them. By introducing job-related education programs to its employees, Colbert, and Kurucz (2007) noted that organizations such as Northrop Grumman have created a qualified and dedicated workforce willing to deliver their best, thereby improving the performance of the organization.

Economic

From the economic dimension, Northrop Grumman participated in various high priority government and defense programs. They carry out most of its operations with the US federal government, particularly the US intelligence community and the department of defense (DOD). The company has unique environmental-based strategies such as resource reduction, energy efficiency, environmental energy, and environmental conservation. Through these strategies, the company has managed to not only serve its neighboring communities but also safeguard the environment where its foreign customers are located. Another consequence of this strategy is that it has enabled the company to continue adhering to the federal Toxic Release Inventory (TRI) program reporting demands by computing net usage of chemicals enclosed under this program and controlled its chemical usage in its operation in line with any legal provisions.

Environmental

Northrop Grumman regularly innovates to offer advance security/defense solutions and competencies to its clients. An essential approach is systems thinking that enable the organization to design and provide advanced products, which are critical to global security. Systems thinking encompass performing program engineering and including all workers to help solve complex challenges. This process considers the effect of every decision on other systems and ensures that decisions made will be sound for the whole system. The ramification of this strategy is that it has enabled the company to ensure that solutions or products it develops meet mission objectives and expected customers. Moreover, it has enabled the company to consider the technical and business needs of its customers and provide them with quality solutions or products.

Company 2: Wells Fargo

            Wells Fargo is an American multinational financial and banking services corporation situated at San Francisco, California. It is regarded as the fourth largest financial institution in the US by assets and the largest financial institution by market capitalization. Moreover, it is the second largest financial institution in home mortgage servicing, deposits, as well as debit cards. Wells Fargo operates in more than 42 countries and has more than 70 million customers across the world. The company has streamlined its business strategy to the current trends in the triple bottom line. In particular, it embraces its role of being the leading corporate citizen, as well as the chance to create more sustainable and resilient communities through its actions and operations. It seeks for diverse views to inform its business strategy, attempt to improve financial knowledge and opportunities for their communities and customers, and is active in caring and safeguarding the environment. It aggressively supports the recovery and growth of the economy through stakeholders’ consultations, communication contributions in different forms.

Economic

Wells Fargo seeks diverse viewpoints to inform its business strategy, endeavor to support financial knowledge and opportunities for its clients and communities, and are proactive for safeguarding and improving the environment. It actively supports the improvements and development of the economy through community contributions to schools, team member charity, and volunteerism, environmental initiatives, community development investments, and loans, as well as other corporate citizenship efforts (Montes-Stewart 2013). Moreover, it offers financial resources to teens, children, students, small businesses, and adults. The consequence of this stated business strategy is that the company’s customers through financial education and assistance that the corporation offers have become informed on how to manage their finances. The more financially aware the clients have become, the more money they have stored at the bank, and the more credit the bank has provided, a situation that has increased the bank’s profit margin.

Environmental

Many customers around regions where Wells Fargo operates have continued to experience the effects of climate change (Montes-Stewart 2013). They are also growingly concentrating on a healthy environment and climate change. This implies that there is an emerging need to support and fund companies, entrepreneurs, and organizations committed to solving environmental problems through clean technologies and innovation. With this in mind, Wells Fargo has undertaken the leadership position to deal with its environmental footprint and establish innovative solutions that can make its customers and communities healthy (Montes-Stewart 2013) Moreover, the corporation has increased virtualization, withdraw older systems and using modern hardware, a situation that has enabled it to reduce carbon emissions and create safe environment for its workers and members of the society.

Company 3: Starbucks

            Starbucks is an international coffee company headquartered in Seattle that offers tea and coffee, handcrafted beverages, fresh foods, and merchandise. It operates over 20 000 stores located in 64 countries across the world (Campbell and Helleloid 2016). Similar to other companies already discussed, Starbucks has developed its business strategy to adapt to the current trends of triple bottom lines. It has adopted technologies and innovations to minimize costs. It also uses these technologies and innovations to recycle products. Moreover, the company handled its partners in a better way and created various programs to support communities.

Economic

Starbucks have adopted a business strategy of is being an Ethic Company to deal with trends in TBL. It has operated its businesses by paying attention to quality services and products to achieve customers’ satisfaction. For quality products, the company partners with farmers who happen to be its suppliers by contributing to knowledge, education, and training to enhance the quality of products for clients. The company has been honest in its advertising and has endeavored to provide accurate information to the public. This indicates its high standard. Regarding competition, the company focuses on fair markets by agreeing with its close competitors so that it does not dominate the market to ensure that there is free competition.

Environmental

From an environmental perspective, Starbucks operates while considering its surrounding environment. It has adopted technologies and innovations to reduce costs. By using modern techniques and innovations, the firm has managed to minimize waste by 70% in North American, where it recycles services (Campbell and Helleloid 2016). To reduce the wasting cups, Starbucks has introduced a recyclable cub campaign to minimize using cups by lowering the prices for clients who used such cubs. Starbucks has also reduced its energy consumption by installing LED lighting to converse energy such as natural water resources by replacing the faucet and using dishwasher devices to conserve its water. Starbucks also safeguard climate change by funding programs aimed at assisting coffee farmers in reducing carbon emissions from burning in various parts of the world. Thus, the company conducts its operations by paying close attention to the planet and environment. It uses numerous ways to reduce environmental effects and reduce overexploitation of natural resources by adopting technologies and innovations such as recycling, energy conservation, reducing waste, minimizing water, and safeguarding the climate.

Social

From a social perspective, Starbucks believes in excellent benefits and motivates its stakeholders to work effectively. It treats all its stakeholders without any impartiality because everyone in the organization is regarded as an essential partner. The company has introduced numerous safety training programs for stakeholders, and this has enabled stakeholders to protect themselves from accidents. Starbucks has launched plans to support communities. By designing a program that assists teens, the company has offered education, finance, and systems to its coffee farmers to enable them to improve the quality of coffee they grow and improve their standards of living. Similarly, the organization has assisted millions of children across the world to access clean water for drinking. For instance, it recovered the Gulf Coast by providing necessary funds to rescue people staying around the gulf region and improving education in China.

Recommendations for Multinationals

             Businesses are boosting their reputation and increasing their brand awareness for paying attention to the triple bottom line. It is argued that companies that pay attention to TBL will stand out as compared to others within the same industry that ignores TBL (Flores et al. 2017). These firms are expected to have increased sales as customers are likely to choose corporations that deal with matters that customers care more about. Recent studies have indicated 80% of Americans are ready to switch to another corporation that supports a just cause and has a good reputation and public image (Onyali 2014).

            Corporations that pay attention to TBL will operate with little costs in the future. Studies have indicated that most corporations that are effective corporate citizens tailor their triple bottom line initiatives on environmental issues (Onyali 2014). These organizations help safeguard the environment by recycling, reducing, or reusing. Moreover, they train their workers on how to become more environmentally friendly. As such, by paying attention to TBL, these companies will, in the long run, minimize operating costs because they save energy, water, as well as other production and operational expenses that are difficult to notice (Lenka and Tiwari 2016).

            Companies that continue to pay attention to the triple bottom line are expected to have a positive image and high reputation, thereby retaining workers and attracting competent candidates to work in a socially responsible environment they have created (Wilson 2014). As depicted in the case of Starbucks, Well Fargo and North Grumman Corporation, workers feel more privileged and happy to work in corporations that adopt great TBL program as compared to companies that do not. Hubbard (2009) revealed in their study that about 80% of people do not prefer working in an organization with a tarnished reputation. Harvey and Buckley (2002) noted that multinational corporations are not serving the desired interests of their employees, shareholders, and customers in case they allocate a portion of their capital into practicing TBL activities. Instead, firms should act towards their intended purpose only that is to become profitable as they can. Unfortunately, things are changing. Scholars have contended that 90% of individuals expect more from corporations besides making a profit (Fry, and Slocum 2008). As a fact, shareholders want to invest in companies that make a profit and have a positive image and reputations on social perspectives. At the same time, consumers put more emphasis on quality, value, and brand image as opposed to the price (Callahan 2007). Therefore, companies need to pay attention to TBL as they move to the future.

            Going into the future, TBL should be implemented in companies not as an exercise meant to build image but as a source of competitive advantage to achieve sustainable business growth and development. Inculcating socially responsible mindset into corporations according to Giancarlo (200) will earn value-added benefits and lead to better performance. It will also result in a more motivated and engaged workforce, better relationships with stakeholders, a contended customer base, superior transparency, a more cooperative society, and an improved capacity to innovate (Wolf 2013).

Secondly, companies should adapt to the local context, as well. Undoubtedly, technology can lead to innovation and new solutions. However, these according to Hoffman ( 1991) need to be managed appropriately and incentivized to prevent creating tradeoffs within other areas. For instance, using the power to irrigate land for agricultural production is true, in theory, a superior green alternative to diesel pumps. Nonetheless, ensuring that groundwater pumping more affordable can deplete groundwater and degrade the quality of water.

Going into the future, corporations should use a triple bottom line to pursue new business opportunities. As opposed to the idea that adopting TBL and going green is detrimental for companies, MacDonald (2009) indicate that the green economy is creating more and new opportunities for global companies. Agri-business multinational corporations can focus on the supply chain to establish new ways of generating income in the least expected areas. For instance, the ever-growing population will require innovative solutions to handle wastes. A report by Becchetti, Stefania, and Pinnacchio (2008) stated that the circular economy could save about 11% of the yearly water demand in the world and establish new business frontiers. In the meantime, scientists have examined various business models for recycling sewage. In the same perspective, multinational corporations using TBL should look for new opportunities that the concept can bring besides the conventional ones already discussed. Moreover, in the future, corporations should work with nature and avoid working against it. Studies have indicated that there is robust business care for global companies to consider investing in quality based solutions to substitute extensive human-made infrastructure (Rusinko 2005). This, according to Azevedo and Barros (2017), can minimize costs, generate financial benefits, improve operations, and enhance the relationship with the neighboring societies.

Conclusion

In conclusion, adopting the triple bottom line is no longer something that multinational corporations undertake as a mere way of achieving their corporate social responsibility obligations. Still, it is regarded as the key to their business strategies. It is no longer viable for companies to concentrate on neither maximizing production nor reducing impact. As a fact, building sustainability and resilience is the only means through which corporations can underpin their businesses but also communities, societies, and ecosystems around them in their bid to react to changes and bounce back due to various changes.