An analysis of shared value by porter and kramer

Mechanism[ edit ] Companies can create shared value opportunities in three ways: Reconceiving products and markets — Companies can meet social needs while better serving existing markets, accessing new ones, or lowering costs through innovation Redefining productivity in the value chain — Companies can improve the quality, quantity, cost, and reliability of inputs and distribution while they simultaneously act as a steward for essential natural resources and drive economic and social development Enabling local cluster development — Companies do not operate in isolation from their surroundings. To compete and thrive, for example, they need reliable local suppliers, a functioning infrastructure of roads and telecommunications, access to talent, and an effective and predictable legal system Many approaches to CSR put businesses against society, emphasizing the costs and limitations of compliance with externally imposed social and environmental standards.

An analysis of shared value by porter and kramer

An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility Tuesday, March 4, Four big problems with "Creating Shared Value" The idea of "Creating Shared Value" CSV popularized by Michael Porter and Mark Kramer in the Harvard Business Review has probably done more to get corporate responsibility issues into the boardroom than anything else written in the last few years.

In many respects, that is a good thing. Or at least it is until you start to realize all the big problems that are hidden behind the big ideas of CSV. The published version features a response from Porter and Kramer and a counter response from us which we think makes for quite enlightening reading you can also download a free, but slightly different, version of our article but without this dialogue over at SSRN.

Our article sets out four main problems with CSV: Porter and Kramer simply don't acknowledge that there is little new about CSV. People have been writing about much the same thing for decades.

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And the corporate initiatives they rebrand as CSV are just attempts to relabel practices that were already going ahead prior to them publishing their article. It's just that some people call those practices "strategic CSR," "social innovation," or "stakeholder management.

It ignores the tensions between social and economic goals. CSV is presented as "moving beyond trade-offs" between social and economic goals. But that is only because Porter and Kramer ignore any such trade-offs that might need to be made.

Sure, there are some great opportunities where business success can be aligned with social progress. But there are also a whole host of social problems, especially those caused by business, where social and economic goals inevitably conflict. CSV prompts managers to simply ignore them.

It is naive about business compliance In a move very much reminiscent of Milton Friedman's famous critique of CSR, CSV "presumes compliance with the law and ethical standards, as well as mitigating any harm caused by the business".

Of course, this is where all those messy "trade-offs" are hiding. But as long as you can presume them away, then you don't have to deal with them.

In fact there is only one sentence dedicated to social harms, ethical norms and legal compliance in their whole article. So, let's just ignore all the occasions when firms harm people or the environment.

An analysis of shared value by porter and kramer

Let's ignore all all the times they fail to uphold some of the laws and ethical customs of the places in which they operate.

Then we can talk about CSV. But let's not pretend that this is a useful strategy for corporate responsibility or still less a sane way to re-legitimize business, as they claim in their article.

Just getting firms to respect the spirit of the law - say in paying their fair share of taxes or respecting international labour standards across the globe - would be a much better way of re-legitimizing business.

Michael Porter - Wikipedia

It is based on a shallow conception of the corporation's role in society CSV is supposed to be about "reshaping capitalism" but in reality it is really just more of the same of all the stuff that has given capitalism such a bad name - a blind focus on individual corporate self-interest.

It will help solve some social problems, and will make some firms, and some stakeholders better off … but who are they kidding that this is going to save capitalism? What we need is a perspective that acknowledges the systematic nature of many of the problems we face, and a willingness from firms to engage in collaborative responses with other stakeholders to solve the problems that need solving.

Not just those that can be cherry-picked to make a fast buck.In , Kramer and Porter, with the help of the global not-for-profit advisory firm FSG, founded the Shared Value Initiative to enhance knowledge sharing and practice surrounding creating shared value, globally.

Michael Eugene Porter (born May 23, ) is an American academic known for his theories on economics, business strategy, and social causes. He is the Bishop William Lawrence University Professor at Harvard Business School, and he was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy.

Sixty-three studies published in the years – are reviewed to assess the effects of workplace diversity on teams and organizations.

Four major questions are considered: Which personal attributes have diversity researchers studied in recent years? Jun 04,  · Watch video · He created the “Five Forces” analysis model to understand the competitiveness and attractiveness of an industry.

Porter is a corporate strategy legend. Porter is a corporate strategy legend. Creating Shared Value. Michael E. Porter, Mark Kramer. Topics: Corporate/CSR, Shared Value. Share Creating shared value is the practice of creating economic value in a way that also creates value for society by addressing its needs and challenges.

There are 3 ways to create shared value: by reconceiving products and markets, by redefining. Creating Shared Value Michael E. Porter, Mark R. Kramer; Harvard Business Review Summary The article “Creating Shared Value“, written by Michael E.

Porter and Mark R. Kramer and published in the “Harvard Business Review“ in January deals with the idea of innovating the purpose of a corporation and their relationship to the.

Creating shared value - Wikipedia