The Economy As an Ecosystem
Concern for the Stakeholder Ecosystem
We have compared organizations such as NGOs, government entities and for-profit businesses to biological organisms. These entities impact the world around them, just as biological organisms (including humans) impact their environment. Today managers are concerned with corporate social responsibility (CSR) just as ecologists are concerned with how organisms and activities impact the environment.
The organization’s environment is more than the ecosystem of biological organisms studied by ecologists. The organization interacts with many stakeholders including employees, suppliers, shareholders, lenders, governments, local communities and, yes, the ecological environment. CSR is a philosophy in which the organization tries to benefit all stakeholders over the long term. This way of doing business strives for harmony between the organization and its surroundings.
The idea of a sustainable organization has been described using many frameworks. One way of thinking about sustainability considers how the organization impacts all stakeholders. The overall effects of the organization are tallied in what is called “full cost accounting,” which includes more than just financial measures. If the firm benefits all stakeholders, it is a sustainable firm. If the organization harms a stakeholder it relies on, it will not be able to harm that stakeholder indefinitely, and it will have to change. Unsustainable business practices can work only in the short term and eventually cause enough damage to a stakeholder that it forces business as usual to stop. Sustainable business practices can be done indefinitely.
One common way of thinking about a sustainable organization is the triple bottom line (TBL) of financial success, environmental success and societal success. This framework organizes stakeholders and their goals into the three P’s: people, planet and profit.