Today, there is a change of mindset concerning the maximization of profit, in which it is no more an exclusive goal of the company in terms of economic aspect but also in social and environmental aspects (Kleine & Von Hauff, 2009). These economic, social and environmental bottom lines are known today as the ‘triple bottom line’ or ‘3BL’. The idea behind this concept is to suggest that corporation’s ultimate success should be measured not only by the traditional financial bottom line, but should also look at its social and environmental performances. It stresses that firms do have social and environmental bottom lines, and should be treating them in the same way as the way they treat the financial or economic aspects (Norman & MacDonald, 2003).
The concept of triple bottom line does suggest a controversy of its own, with scholars (Cochran and Wood, 1984) questioning whether firms adopting this kind of strategy can still make profit. Having triple bottom line means that a company would have to spread its resources in order to achieve its triple goal, rather than making the most out of their resources to achieve a single goal (economic), and this might lead firms to be less competitive, which might suggests less profit. In relation to competitiveness, there have also been recent findings indicating that companies do not really want to adopt the Triple Bottom Line strategy (Norman & MacDonald, 2003), presumably because the concern is still on profit making.
Despite the pessimistic view that triple bottom line can only jeopardize the firms sole purpose (making profit), there are views that support the idea of adopting triple bottom line strategy in order to increase the company’s performance, which in the end would produce more profit. Drucker (1984) pointed out an idea of how business can convert its social responsibilities into economic opportunity and economic benefit. Much more of the same, (Norman & MacDonald, 2003) suggest that when social and environmental concerns, which more or less are often associated with CSR, can be strategically integrated into business, it can improve business performance
But in reality the situation is a bit harsh, as it turns out that firms are still practicing a single bottom line model (economic), with social and environmental concerns as part of window dressing (Norman & MacDonald, 2003). It is then the company’s decision whether to treat the social and environmental aspects in a strategic point of view alongside with the economic aspect, or merely as an act of philanthropy or window dressing. We can see how companies these days are publishing CSR reports, explaining their concern on social and environmental aspects. If the aim of publishing the reports is for the sake of public relations stunt, then there will be less value for the company because reports should be a part of company’s ‘strategic CSR’ approach, used to reflect the impact of company’s past and future business performance (Vogel, 2005).
CSR is often very well associated with public relations and marketing activities, especially in the developing countries where companies simplify the meaning of CSR with corporate philanthropy and doing it for a mere sake of good public relations (Newell, 2005). The likes of cause related marketing, corporate social marketing, and corporate philanthropy (Kotler & Lee, 2005) is getting widely accepted, with the community/society as the subject. Some scholars (Porter and Kramer, 2002, and Lantos, 2002) even relate corporate philanthropy, sponsorships and cause related marketing with ‘strategic CSR’, as long as it tied with organizational objectives and strategy. But this view can be seen as too narrow and companies should go further looking at the likes of importance in exceeding customer’s expectation or how to gain competitive advantage through a responsible approach (Galbreath, 2008). By approaching CSR in a more strategic manner, firms can support the creation of effective sustainable development and become a solution to meet social and ecological challenges (Kleine and Von Hauff 2009).
How far CSR can be strategic is another question. But looking at their nature of relationship with stakeholders and many aspects within and outside the company, it is easy to conclude that CSR fits the criteria of being strategic, because it highly affects the company’s course in meeting their objectives (Ansoff, 1980). Galbreath (2008) argues that putting CSR within the context of company’s strategy would be extremely important and in order to deliver well, the role of corporate executives to take a lead in developing CSR initiatives is central. The challenge now is to formulate a strategy that will benefit both the society and company. In doing so, Galbreath (2008) further suggests that CSR should take into consideration the six dimensions of corporate strategy: firm mission, strategic issues, markets, customer needs, resources and competitive advantage so that it could strategically contribute to good management practice, economic benefit, and societal welfare.