Posted: March 3rd, 2022

Peer Response

· Identify the challenges associated with managing a double bottom line of values and profits. (provide peer responses )

1. (Samuel) the double bottom line is not only having a financial bottom line but a sort of give back, do good bottom line. Our text book uses one example of Tom’s shoes and how when you buy a pair of shoes they give a pair to someone in need of shoes. Companies that base their visions and business models around giving back are a great thing but it does come with many challenges. Companies still need to make money at the end of the day and balancing profits with giving away product or money is a fine line to walk. Also if a company starts with the promise of giving back they need to stick to their guns. A lot of people will chose a brand knowing that they are helping a good cause at the same time. If a company ends up going back on their word and stops giving back, they will lose a lot of customers. When a company has that cornerstone of giving back, people are going to not only want to purchase a quality product, but they are expecting the company to put the proceeds of their purchase towards whatever cause that company is supporting.

Companies that have a double bottom line now have two things to keep an eye on. If your financial bottom line is in the red then you are losing money and could impact the company as a whole. If you aren’t giving back like you said you would, people will notice and will stop buying your product. When people stop buying your product your financial bottom line takes a hit and you lose money. It’s a vicious cycle for sure!

I really like the way Newman’s Own handles their charity. Once all the costs of doing business is paid, all surplus money is then just sent right of to charity. Its a pretty great way to stay above both bottom lines!

100% profits to charity. Newman’s Own. (2016, November 28). Retrieved March 2, 2022, from https://www.newmansown.com/100-percent-profits-to-charity/

1. (Savannah) With double bottom line values and profits, an organization can keep track of their financial performance and social effect. The purpose of the double bottom line is to extend the conventional bottom line that generally measures financial performance and add the social responsibility aspect as well. Double bottom line is typically used for non-profit organizations that can analyze their social impact, but a for-profit organization would focus more on their financial performance. Double bottom line values and profits typically used as a business strategy that can involve not only their financial performance and social effect, but also helps organizations determine the aspects of opening and running a new business.

This strategy is more recent, only beginning to take placed during the 1960’s where corporations felt the need to be more socially aware for their consumers. According to Forbes, double bottom line offers assurance to nonprofit organizations shareholders that their money and mission values are aligned with each other, which should be viewed more as a cycle instead of an end goal (Forbes, 2017). If an organization can uphold its social mission, then they can also maintain their financial performance. There is no need to sacrifice either one in order to have a successful organization, however sometimes companies can become too focused on their financial responsibility and drift away from their mission.

Examples of a double bottom line enterprise would include banks that are located in low income areas, where they are helping those manage their money while also trying to eliminate the poverty in their immediate area. They’re still going to make some sort of profit from their work, but their focus is also helping their community.

Jinks, P. (2017, September 14). Council post: Why you should work to improve your employees’ double bottom line. Forbes. Retrieved March 2, 2022, from https://www.forbes.com/sites/forbescoachescouncil/2017/02/10/why-you-should-work-to-improve-your-employees-double-bottom-line/?sh=65048fb4312d

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