Assessing Organizational Performance

Measuring Performance Using the Triple Bottom Line

Ralph Waldo Emerson once noted, "Doing well is the result of doing good. That's what capitalism is all about". While the balanced scorecard provides a popular framework to help executives understand an organization's performance, other frameworks highlight areas such as social responsibility. One such framework, the triple bottom line, emphasizes the three Ps of people (making sure that the actions of the organization are socially responsible), the planet (making sure organizations act in a way that promotes environmental sustainability), and traditional organization profits. This notion was introduced in the early 1980s but did not attract much attention until the late 1990s.

In the case of Starbucks, the firm has made clear the importance it attaches to the planet by creating an environmental mission statement ("Starbucks is committed to a role of environmental leadership in all facets of our business") in addition to its overall mission. In terms of the "people" dimension of the triple bottom line, Starbucks strives to purchase coffee beans harvested by farmers who work under humane conditions and are paid reasonable wages. The firm works to be profitable as well, of course.