CSR and CSV: Understanding the Key Differences

Running head: BUSINESS AND SOCIETY
Business and Society
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1BUSINESS AND SOCIETY
CSR and CVV
Corporate Social Responsibility (CSR) is the business approach, which contributes to
sustainable development through delivering economic, social and environmental benefits to all
the stakeholders. According to Saeidi et al. (2015), the policies and functions of CSR act as self-
regulatory mechanism, which facilitate an organization to ensure its active compliance with spirit
of law, ethical standards and national and international norms. However, Korschun et al. (2014)
opined that CSR activities go just beyond the compliance and regulatory requirements and it
furthers the some social good that is beyond the interest of the firms. Moreover, such activities
mostly go beyond the interest level of the organization and solely for the development of the
society. Doing something for society, stakeholders and consumers not just take business to
higher level, but also ensure long term profitable organizational success through competitive
gain. Economic development of CSR ensures that organizations are profitable enough to provide
fair return on investment to all the stakeholders and shareholders.
Economic development also ensures that organizations are capable enough to invest in
social development. Gupta et al. (2017) pointed out that social development ensures connection
of the organizations with the overall development of the society. Moreover, it ensures human
rights to employees, social equality, community relation, anticorruption measures, educational
development, charity to poor people and many more. Furthermore, Ioannou and Serafeim (2015)
opined that environmental development is always concerned with protection of environment
from harmful carbon footprint and water footprint for building healthy society. CSR activities
ultimately build corporate reputation in the society through increased furthering social good. It
also leads to brand differentiation and customer loyalty through contributing its efforts in making
world a better place. While considering the example of Vinamilk Corporation, the organization is

2BUSINESS AND SOCIETY
always engaged with societal development through charity and educational development. Such
CSR activities can established the corporate image of the organization in the market by bring
competitive gain over the rivals (Wang et al., 2016).
Creating shared value (CSV) is the business concept, where the organizations find the
business opportunities for growth and innovation through treating social problems as business
objectives. According to Crane et al. (2014), the health of an organization is intrinsically linked
with the resilience and health of the society in which it operates. Hence, the purpose of the CSV
is to enhance the quality of social life through contribution to a healthier future. Moreover, it is
the practice of creating economic growth of an organization in a way that also fosters societal
value through addressing the social issues and challenges. On the other hand, Smith (2016)
opined that CSV is highly concerned with recognizing and expanding the connection between
the societal and economic progress.
Shared value is created mostly through three ways like reconceiving products and
markets, redefining productivity in the value chain and enabling local cluster development.
Reconceiving products and markets is concerned with meeting the unmet needs of the society
through products and often addressing the undeserved customers. For example, IBM and Intel
are devising the ways for helping utilities harnessing business intelligence for economizing on
power usage (Corner & Pavlovich, 2016). On the other hand, redefining productivity in the value
chain is concerned with changing the practices in value chain for driving productivity through
better utilizing of employees, resources and business partners. For example, Walmart has
reduced the delivery packaging and improved the deliver logistics, which facilitated it in saving
$200M in distribution cost and growing the quantities being shipped (Pavlovich & Corner,
2014). Furthermore, enabling local cluster development is all about improving the available