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Analysis of the Creating of Shared Value - Doc

   

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Running head: ANALYSIS OF THE CREATION OF SHARED VALUE ANALYSIS OF THE CREATION OF SHARED VALUE Name of the Student Name of the University Author Note
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ANALYSIS OF THE CREATION OF SHARED VALUE1IntroductionCreating shared value is mainly a concept related to business that has been introducedby the article named “Strategy & Society” which was published in the Harvard BusinessReview. This concept analyses the link that is created between the corporate socialresponsibility and competitive advantage of the business organizations. This concept wasfurther elaborated in the year 2011 with the help of a follow up article which was named“Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society”which was written by Michael E. Porter. The central premise that is related to the creation ofshared value is based on increasing the competitiveness of the company and improving thehealth of the communities in the process (How Shared Value Is Different from CorporateSocial Responsibility | Shared Value Initiative., 2018). Discussion of the concept of shared valueThe concept of shared value has been explained in the article by Porter and Kramerand the article and the authors have also stated that the various business organizations need tocreate shared value for their proper operations in the business environment. According toMichael E. Porter and Mark Kramer “shared value is not social responsibility, philanthropy,or sustainability, but a new way for companies to achieve economic success”. Shared valuecan be successfully defined as a management strategy which can help the companies to findopportunities related to business in the social problems. CSR or corporate socialresponsibility based concept is mainly focussed on the ways by which the organizations areable to reduce the harm that its operations cause on the society (Baumgardner et al., 2017).On the other hand, shared value focusses on the company leaders and the ways by which theyare able to maximize the competing value related to providing solutions to the various socialproblems that are faced by different organizations. The social problems that are related to the
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ANALYSIS OF THE CREATION OF SHARED VALUE2new customers include, talent retention, cost savings and many more. The organizations areable to build and rebuild the business models related to social good which sets them apartfrom the other in the industry. The creation of shared value is based on three levels. The firstlevel is based on reconceiving the markets and the products. This is related to the ways bywhich the organization is able to meet the social needs with the help of its products and byaddressing the unserved and the undeserved customers. The second level is based on theredefining the productivity in value chain (Campos-Climent & Sanchis-Palacio, 2017). Thechanges that can take place in the value chain are related to the ways of driving productivitythrough better utilization of employees, resources and the business partners. The third level isbased on enabling the development of local cluster. This is based on the improvement of theskills that are available, the supporting institutions in communities and the supplier basewhich helps the company to operate for boosting its innovation, growth and productivity(Visser & Kymal, 2015). The concept of shared value as defined by Porter is different from the creation ofshared value. The creation of shared value is mainly grounded on the idea of theestablishments to increase their profitability and further improve their productivity by solvingthe various societal complications. The shared value related concept brings together allaspects of business. The shared value is built upon great thinking and the practice of CSR(Crane et al., 2014). This concept is largely based on addressing the social issues and makinga profit in the process. On the other hand, CSR is based on the concept of mitigating thenegative effects that the operations of the company can have on the society as a whole. Thetraditional business organizations may not always be able to address the social needs which isnot a wrong practice. However, this practice followed by the organizations cannot beconsidered to be the creation of shared value. The term CSR can have many types ofinterpretations. Shared value is able to transform the thinking of the company and the
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