Creating shared value is a framework for creating economic value while simultaneously addressing societal needs and challenges. The creating shared value proposition substantia mea. Creating shared value, an hbr interview with michael. Jun 04, 2012 what does the term creating shared value mean. Michael porter and mark kramer, writing in hbr december, 2006 and januaryfebruary, 2011, advance the idea of creating shared value by developing strategies and policies that enhance the. They are wrong because prior to csv, sustainability and social responsibility had failed to connect with business economic imperative. Kennedy school of government in cambridge, massachusetts.
Creating shared value is about creating new policies and operating procedures that allow your company to maximise its revenues, whilst also offering benefits that add to the local community. Corporate social responsibility from friedman to porter and. An extension of porter and kramers creating shared value. Eventually, some five yearsaftertheirinitial formulation, the fullyrealized elaboration of sharedvalue was set out by porter and kramer in the cover article of the januaryfebruary 2011 issue. It was the catalyst for our yearlong effort to highlight. This article critiques porter and kramers concept of creating shared value. Not only do they criticize the four principles on which csr rests. Investments in longterm competitiveness creating shared value. Reporting by michelle matthews creating shared value.
Csv vs csr i creating shared value vs csr explained. Oct 12, 2015 porter and kramer 2011 gave relevant examples of how efficient processes are aimed at adding value to the firm and to society at large. The link between competitive advantage and corporate social responsibility. When businesses act as businessesnot as charitable donorsthey can improve profitability while also improving environmental performance, public health and nutrition, affordable housing and financial security, and other key. Although michael porter s and marc kramer s article creating shared value is a welcome attempt to mainstream business ethics among management practitioners, it is neither so radical nor such a departure from standard management thinking as the authors make it seem. Creating shared value in action a conversation with. Oct 18, 2016 porter and kramers concept of creating shared value csv has attracted considerable attention from business and academics. If not, here is their front cover story of the first hbr issue of 2011, with accompanying video, humbly. Investments in longterm business competitiveness that simultaneously address social and environmental objectives 3 f o r am edti lsc unf hv,p m.
A leading authority on corporate and competitive strategy, porter has written and talked a lot about the economic development and competitiveness of regions, states and nations. What is good for the community is good for business all profit is. Creating shared value csv, the model for corporate social responsibility. Csv explained institute for strategy and competitiveness. Companies must take the lead in bringing business and society back together. Major events dedicated to creating shared value in many countries creating shared value as a key trend forbes. We analyze, from the viewpoint of value creation, the evolution of corporate social responsibility csr thought from friedman critical view of csr to porter and kramer sharedvalue proposition, emphasizing, at the same time, its parallelism with the evolution of asset valuation models from the viewpoint of common stocks value. Pdf kramer porter 2011 creating shared value wanting. Porter and kramer 2006, 2011 are very clear that shared value is not corporate social responsibility. Corporate social responsibility from friedman to porter. There is a lesson to be learned hearing a hardcore capitalist saying that companies need.
Kramer 2011 the discussion about the economic importance and relevance of clusters is a. This article critiques porter and kramer s concept of creating shared value. Pdf kramer porter 2011 creating shared value wanting hu. In 2006, harvards michael porter and mark kramer published an article outlining a new concept for corporate responsibility. It could also drive the next wave of innovation and growth as it opens managers eyes to immense human needs to be met, large new markets to be served, and the internal costs of social deficitsas well as the competitive advantages available from addressing them. Michael porter, pope of corporate strategy, comments on his recent article about creating shared value. In 2006, porter and kramer developed the notion that corporations could and should pursue a higher goal of capitalism including creating shared value csv as. The concept was further expanded in the january 2011 followup piece entitled creating shared value. Companies could bring business and society back together if they redefined their purpose as creating shared valuegenerating economic value in a way that also produces value for society by. Companies could bring business and society back together if they redefined their purpose as creating shared valuegenerating economic value in a. Porter and kramers concept of creating shared value csv has attracted considerable attention from business and academics. Porter and kramer 2011 gave relevant examples of how efficient processes are aimed at adding value to the firm and to society at large.
How to reinvent capitalism and unleash a wave of innovation and growth. Oct 04, 2018 porter and kramer 2011 has promoted a concept of shared value, which intends to reinvent capitalism and recover disappointing financial market. Kramer from the januaryfebruary 2011 issue executive summary reprint. Porter and kramer are the cofounders of both fsg social impact advisors and. Essentially, the shared value approach got coined by porter.
Csv is therefore firmly embedded not just in the field. Reconceiving products and markets, redefining productivity in the value chain and building supportive industry clusters at the companys locations. Introduction creating shared value csv that is what harvard professors michael porter and mark kramer 2011 propose. The contribution of porter and kramers concept of creating. How to reinvent capitalismand unleash a wave of innovation and growth by michael e. Pdf this article offers a fundamental critique of michael porters and marc kramers. Creating shared value csv, the model for corporate social responsibility developed by michael porter and mark kramer of harvard business school, has been surprisingly controversial. Government must learn how to regulate in ways that enable shared value rather than work against it. How to fix capitalism and unleash a new wave of growth. Jan 16, 2015 creating shared value businessmarketing bibliographies in harvard style. Nestle creating shared value report 2011 environmental compliance sustainability nutrition rural water development creating shared our people value at nestle overview creating shared value csv is a holistic and sustainable approach to business, which addresses the needs of society, while meeting the needs of shareholders.
As such, the process of creating shared value entails first identifying the kinds of. It already has an acronym, csv, and its in fact a powerful concept for companies to use. For a previous discussion of shared value, see my summary of porter and kramer s 2006 article, strategy and society business organizations have increasingly been viewed as the cause of social, environmental, and economic problems, prompting political leaders to set policies that undermine competitiveness and economic growth. In 2012, kramer and porter, with the help of the global notforprofit advisory firm fsg, founded the shared value initiative to enhance knowledge sharing and practice surrounding creating shared value, globally. By now, you will probably have read about michael porter and mark kramers latest foray into csrcreating shared value. When businesses act as businessesnot as charitable donorsthey can improve profitability while also improving environmental performance, public health and nutrition, affordable housing and financial. An extension of porter and kramers creating shared value csv.
Kramer 2011 came up with the concept of creating shared value, according to which companies can. One of ten key trends in 2012 creating shared value, by michael e. Porter and kramer are the cofounders of both fsg social impact advisors and the center for effective philanthropy, a nonpro. This article was the winner of the 2011 mckinsey award. In creating shared value hbr januaryfebruary 2011, our fsg colleagues michael porter and mark kramer argue that achieving those twin goals represents the next competitive frontier for companies. We need to understand that whats good for the community is actually good for business, said porter, explaining csv.
Apr 01, 2011 by now, you will probably have read about michael porter and mark kramers latest foray into csrcreating shared value. The concept of creating shared value csv was presented as the big. First, the authors summarise the positive and negative criticism which csv has received since 2011. Todays businesses take the blame for many of societys economic, social and environmental woes, despite the launch of countless corporate social responsibility initiatives in recent decades. Categorizing and ranking social issues is just the means to an end, which is to create an explicit and. However, creating shared value becomes a controversial theory which has some limitations.
Creating shared value, an hbr interview with michael porter. The prevailing approaches to csr are so disconnected from. Redefining capitalism and the role of the corporation in society professor michael e. Concept of shared value by porter and kramer 2011 essay. Reorienting strategies and seeking international cooperation hwychang moon, jimmyn parc, so hyun yim, and nari park this paper improves the theory of creating shared value csv, a new way to achieve economic success, which was introduced by porter and kramer. The strengths of the idea are highlighted in terms of its popularity among practitioner and academic audiences, its.
Porter m e kramer m r 2011 creating shared value harvard. The contribution of porter and kramer s concept of creating shared value to csr theory natalie junge masters thesis business economics business management, corporate governance publish your bachelors or masters thesis, dissertation, term paper or essay. Porter and kramer 2011 claims that traditionally, business and society are in opposite side. In fact, creating shared value is one of the few new innovative strategy ideas from the last 10 years to help you build a sustainable competitive advantage you might have seen the abbreviation csv csr which stand for. Current cases include discovery limited, dow, and more. In recent years business has been criticized as a major cause of social, environmental, and economic problems. A leading authority on corporate and competitive strategy, porter has written and talked a lot about the economic development and. Corporate policies and practices that enhance the competitiveness of a company while simultaneously advancing social and economic conditions in the communities in which it operates create economic valueby creating societal value.
What is good for the community is good for business all profit is not equal. Porter harvard business school fsg csv leadership summit june 9, 2011 this presentation draws on ideas from professor porters books and articles, in particular, competitive strategy the free press, 1980. Porter and kramer 2011 has promoted a concept of shared value, which intends to reinvent capitalism and recover disappointing financial market. The ultimate guide on creating shared value michael porter. Pdf understanding creating shared value researchgate. Creating shared value csv is a new business strategy concept and theres a strong link to corporate social responsibility csr. If not, here is their front cover story of the first hbr issue of 2011, with accompanying video, humbly titled how to fix capitalismthe big idea. Shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Apr 03, 2011 michael porter, pope of corporate strategy, comments on his recent article about creating shared value. How to reinvent capitalismand unleash a wave of innovation and growth, michael porter and mark kramer 2011 suggest what they see as a paradigmatic change in management thinking, one that they believe should contribute to nothing less than the reinvention of capitalism. Redefining capitalism and the role of the corporation in society. So, how did the creating shared value theory come about. Porter, speaking at the nestleiblf creating shared value forum, london, may 27, 2010. Creating shared value csv centre for business research.
The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. On the surface of it, the proposition is fairly straightforward. Porter and kramer, 2011 the authors explained that the creation of shared value focuses on identifying and expanding the connections between societal and economic progress. The contribution of porter and kramers concept of creating shared value to csr theory natalie junge masters thesis business economics business management, corporate governance publish your bachelors or masters thesis, dissertation, term paper or essay. Ultimately, its a strategy for developing the future. The concept of creating shared value csv was presented as the big idea that can help cure capitalisms ills. Castro capella university mba6008 global economic environment professor hidsell january 27, 20 creating shared value csv is a powerful concept that many companies. A direct hedging of social risk hazards is hardly impossible.
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