1ANALYSIS OF THE CREATION OF SHARED VALUE Introduction Creating shared value is mainly a concept related to business that has been introduced by the article named “Strategy & Society” which was published in the Harvard Business Review.Thisconceptanalysesthelinkthatiscreatedbetweenthecorporatesocial responsibility and competitive advantage of the business organizations. This concept was further 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 of shared value is based on increasing the competitiveness of the company and improving the health of the communities in the process (How Shared Value Is Different from Corporate Social Responsibility | Shared Value Initiative., 2018). Discussion of the concept of shared value The concept of shared value has been explained in the article by Porter and Kramer and the article and the authors have also stated that the various business organizations need to create shared value for their proper operations in the business environment. According to Michael E. Porter and Mark Kramer “shared value is not socialresponsibility, philanthropy, or sustainability, but a new way for companies to achieve economic success”. Shared value can be successfully defined as a management strategy which can help the companies to find opportunitiesrelatedtobusinessinthesocialproblems.CSRorcorporatesocial responsibility based concept is mainly focussed on the ways by which the organizations are able 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 they are able to maximize the competing value related to providing solutions to the various social problems that are faced by different organizations. The social problems that are related to the
2ANALYSIS OF THE CREATION OF SHARED VALUE new customers include, talent retention, cost savings and many more. The organizations are able to build and rebuild the business models related to social good which sets them apart from the other in the industry. The creation of shared value is based on three levels. The first level is based on reconceiving the markets and the products. This is related to the ways by which the organization is able to meet the social needs with the help of its products and by addressing the unserved and the undeserved customers. The second level is based on the redefining the productivity in value chain (Campos-Climent & Sanchis-Palacio, 2017). The changes that can take place in the value chain are related to the ways of driving productivity through better utilization of employees, resources and the business partners. The third level is based on enabling the development of local cluster. This is based on the improvement of the skills that are available, the supporting institutions in communities and the supplier base which 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 of sharedvalue.Thecreationofsharedvalueismainlygroundedontheideaofthe establishments to increase their profitability and further improve their productivity by solving the various societal complications. The shared value related concept brings together all aspects 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 making a profit in the process. On the other hand, CSR is based on the concept of mitigating the negative effects that the operations of the company can have on the society as a whole. The traditional business organizations may not always be able to address the social needs which is not a wrong practice. However, this practice followed by the organizations cannot be considered to be the creation of shared value. The term CSR can have many types of interpretations. Shared value is able to transform the thinking of the company and the
3ANALYSIS OF THE CREATION OF SHARED VALUE planning that is related to the interrelation of the business opportunity and social impact which helps in the maximization of its impact in both the areas (Porter & Kramer, 2019). The shared value related concept helps in understanding needs of the communities and linking the business opportunities with these needs. The international organization which has implemented the concept of shared value is Nestle Corporation. The company aims at creating progressive impact on the society and enabling happier and healthier lives for the members of the community. These objectives are thereby based on the conservation of the natural resources and preserving them for the future generations. The efforts of Nestle related to the creation of shared value are underpinned by the value of the organization. The company has been famous for taking a long-term approach and the creation of shared value brings the business of the company and the society together. The organization ensures that it can focus on issues with highest impact on economy, environment and society (Nestle.com, 2018). Nestle aims at upholding the various ethical principleswhich is fundamentalto operate in the modern business environment.The company also aims at contributing to the global goals which are related to the development of the society as a whole. The engagement of the stakeholders with the company is related to the development and the improvement of the corporate policies. The commitments related to the creation of shared value of the company is based on the strengthening of the business organizations and targeting the society based investments (Tantalo & Priem, 2016). Conclusion The discussion can be concluded by stating that the modern organizations need to create shared value to operate in a sustainable manner in the modern business environment. The CSR based activities of the company can be substituted by the creation of shared values.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
4ANALYSIS OF THE CREATION OF SHARED VALUE This will help the organizations to gain from the social activities and create a different position in the market within a short period of time. References Baumgardner, T., Neufeld, C., Huang, P. C. T., Sondhi, T., Carlos, F., & Talha, M. A. (2017). Crowdfunding as a Fast‐Expanding Market for the Creation of Capital and Shared Value.Thunderbird International Business Review,59(1), 115-126. Campos-Climent, V., & Sanchis-Palacio, J. R. (2017). The influence of knowledge absorptive capacityonsharedvaluecreationinsocialenterprises.JournalofKnowledge Management,21(5), 1163-1182. Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating shared value”.California management review,56(2), 130-153. How Shared Value Is Different from Corporate Social Responsibility| Shared Value Initiative. (2018). Retrieved from https://www.sharedvalue.org/groups/how-shared- value-different-corporate-social-responsibility Nestle.com (2018). Retrieved from https://www.nestle.com/csv/what-is-csv Porter, M. E., & Kramer, M. R. (2019). Creating shared value. InManaging Sustainable Business(pp. 327-350). Springer, Dordrecht. Tantalo, C., & Priem, R. L. (2016). Value creation through stakeholder synergy.Strategic Management Journal,37(2), 314-329.
5ANALYSIS OF THE CREATION OF SHARED VALUE Visser, W., & Kymal, C. (2015). Integrated value creation (IVC): beyond corporate social responsibility(CSR) and creatingsharedvalue (CSV).Journal of International Business Ethics,8(1), 29.