| The triple bottom-line approach to measuring and reporting on organizational effectiveness is one outcome of the growing concern with how organizations affect the environments in which they operate. As it grows in popularity in the developed world, more large corporations are reporting annual triple bottom-line performance numbers. At this point, approximately 40% of the Fortune 500 companies issue a report. The typical triple bottom-line report, which supplements the usual report of the financial results of the corporations, reports on the organization’s impact on the physical environment and the societies in which they operate. The triple bottom-line approach represents a dramatic change from the thinking about organizational effectiveness that was dominative in the 1950s, when OD started. The dominant view then was that organizations should only be responsible for their financial performance. Forty-four years ago, the economist Milton Friedman argued in a New York Times article that this was exactly as it should be because to do otherwise would be to do charity with other people’s money Unfortunately, the triple bottom-line approach and the current focus on how corporations impact the environment have not included a major focus on how corporations affect the people who work for them. As noted, there is some focus on working conditions in underdeveloped countries where wages are low and working conditions are often dangerous, but there is little focus on the quality of work-life of most employees. In recent years, the OD field has continued to focus on how well organizations perform in the traditional operational areas, and it has also been concerned with how they impact the quality of life of their employees. Overall, the growing focus of societies and organizations on how they affect the environment, society, and people presents a tremendous impact opportunity for OD, because it has the orientation and knowledge that are needed to make organizations effective in all these areas. What should OD do in order to capitalize on this opportunity? Two things seem obvious. First, as Chris Worley and I argue in our book Management Reset: Organizing for Sustainable Effectiveness (2011), it should champion the idea of organizations being sustainably effective. That is, being effective, not just in terms of their financial performance but being effective in how they treat employees, the communities they operate in, and the environment. This means advocating not a triple bottom-line approach, but a quadruple bottom-line approach to organizational performance. The reason for this is straightforward and compelling given what those of us in OD know about organizational effectiveness. |
