Shared Value and CSR: A Comparison in Human Resource Management

This essay delves into the concepts of Shared Value and Corporate Social Responsibility (CSR) within the context of Human Resource Management (HRM). It explores the core differences between these two approaches, highlighting how Shared Value aims to simultaneously create social and economic benefits, while CSR focuses on addressing the social consequences of business operations. The essay examines the controversies surrounding both concepts, particularly concerning their impact on competitive advantage and financial performance. It emphasizes the importance of integrating social and economic progress to effectively implement Shared Value principles, and discusses how businesses can meet social needs through innovation. The essay further addresses the limitations of traditional CSR, the role of business in economic growth, and the significance of incorporating local value chains and inclusive business models. It concludes by asserting that while Shared Value may not be a utopian ideal, it offers a more balanced approach compared to CSR, allowing businesses to adapt to evolving societal demands and enhance sustainability. The essay references key literature and provides a comprehensive overview of the subject, making it a valuable resource for students studying business development and HRM.

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
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What is shared value and how is it different to CSR? Shared value promises to create social
and economic value simultaneously, is this a utopian goal (are there limits to when this can
occur)
Corporate social responsibility is an essential element of all business organization which
helps to ensure that the business firms are able to taking account of all forms of social
consequences. Idea of CSR has emerged to deal with ethical issues that are often raised by the
operations of business organization (Porter & Kramer, 2011). One of the major purpose of
implementing CSR is to ensure that sustainability principles having incorporated in the
practically executed business plans. In order to deal with the issues of controversy between CSR
and competitive advantage policy, the idea of business shared value has been incorporated. The
main purpose of incorporating this idea is to ensure that competitive policy of a business firm is
mutually dependent upon the value of social responsibilities. In other words it can be said that
companies, which are able to follow the principles of CSR and business sustainability can
automatically generate competitive advantage in the society (Porter & Kramer, 2011).
There have been several controversies in the past about the actual nature and purpose of
business organization and the contribution of the same to the society. The idea of CSR has
therefore emerged to ensure that the society is positively benefited with the actual outcome of
business operations. The cause of major controversies after introducing the policy of CSR is due
to the fact that most of the companies have to compromise upon their competitive advantage
marketing policies. This ultimately results in financial capital loss, thereby losing the actual
purpose of the business.

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It is essential to understand the connection between the social and economic progress in
order to properly implement the principles of shared values in business practice. One of the
major issues of incorporating traditional principles of CSR is due to the fact that they are poorly
linked with the actual practical strategies of business. As the idea of shared values in business
practice image it help to identify the social opportunities that can be utilized by multinational
corporations to generate new business ideas in the market (Porter & Kramer, 2006).
Cost constraint is considered to be one of the major issue that prevented companies like
Toyota, Ford or Volvo to implement the policy of CSR that can ultimately help them to achieve
innovation in business operations and competitive advantage policies. It is important to consider
the relationship between business and society as equal element of corporate growth. This can
ultimately help to device a new framework and course of action to discover new opportunity of
social market expansion.
The mechanism of incorporating shared social value in business can include the business
firm understanding and meeting the social needs by incorporating innovation design in product.
For example large scale automobile companies like Toyota and Volvo can incorporate CSR
strategies by manufacturing advanced car machines that emit minimum amount of pollution in
the environment. Nevertheless, it is also essential to ensure that the cost of environment friendly
vehicles is in par with that of the traditional motor vehicles.
Productivity can also be redefined in shared values by incorporating new value chain.
This can include improvement in both quantity and quality along with the cost of manufacturing.
Proper utilization of natural resources is also required in order to minimize the misuse of the
same. It is important to mention in the context that many of the business firms faced controversy
of over exploiting natural resources. These can include pollution of the local environment from

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manufacturing unit. In order to avoid such controversy it is important to ensure the business
organization built up the local community in order to understand the needs of the community. It
is also essential to depend upon the local suppliers in order to get the best supply of the
materials.
It is important to mention that private business organizations play an essential role in
order to ensure Rapid economic growth of the society. Nevertheless, incorporation of the local
value chain is highly essential to understand the basic principles of CSR in the context of modern
days. Inclusive of essential Business models in the principles of CSR is highly essential in the
context of rapidly evolving economy. It is there for essential to involve complementary strategies
to enhance the environmental need according to the business model (Crane et al., 2014).
Additional it is also essential to develop upon the skills of business workers. This will help to
deal with the social issue of unemployment. The poor economic infrastructure is considered to be
one of the basic obstacles that make the principles of CSR more valuable in the context of
developing Nations.
Creation of business values is highly associated engineering high brand value in the modern day
society. The idea of capitalism needs to be incorporated and balanced along side with the
business values. The shared value initiative has been generated in order to understand the
demand of the global society in the context of modern day business environment.
This is important to consider that new barriers that are generated in the process of
implementing CSR. These barriers originated according to the changing demand of the society.
Business firm have to analyze the micro and macro environment of the society in order to better
understand the role of shared values. The successful implementation of CSR can help to ensure
that business organization is able to generate sustainability. It can also help to ensure that the

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employees within the organization are able to gain high level of job satisfaction. This element is
also highly essential in order to incorporating long term sustainability and customer satisfaction
and customer satisfaction. These limitations in implementing CSR are the major barriers that are
preventing in the execution of utopian goals.
Hence, in order to address the difference between shared value and CSR it is important to
highlight that CSR principles do not change with the need of the society. The other hand the
principles of shared business value try to incorporate and maintain balance between the
principles of CSR and business requirements of multinational corporations. In the context of the
modern day business environment most of the business organizations are able to incorporate the
principles of CSR mostly due to the linking of the same with the modern day business
requirements. The major limitations of CSR can also be overcome due to the added advantage of
shared business values. In spite of the fact that there are still several controversies due to rise of
environmental degradation in the modern day society, the principles of corporate social
responsibility is unable to minimize the environmental damage. Along with the principles of
business sustainability it is possible large-scale multinational corporations to understand the
requirement of the global society. Business Ethics principle is also incorporated in the due
process.
Hence, it is yet not possible for shared business values to reach a position of perfection;
there are several examples of social and economic balance that are successfully implemented in
the modern day corporate world. In spite of several gaps, the business resources of the modern
days are aiming to rapidly adapt with the changing environment of the society, which will enable
them to incorporate new Business principles of sustainability.

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References
Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating
shared value”. California management review, 56(2), 130-153.
Porter, M. E., & Kramer, M. R. (2006). Strategy & Society. Harvard Business Review, 84.
Porter, M. E., & Kramer, M. R. (2011). „Creating Shared Value‟ Harvard Business Review,
January 2011.