Shared Value: from sharing created value to creating shared value

Societal needs might be an opportunity for innovative business solutions. We help to identify these intersections.

In the past two decades, the notion of corporate social responsibility – or CSR – has become widely known in our society. Lots of definitions, approaches and expectations are connected to it. CSR tends to be widely defined by a common denominator – by distribution of already created values. In other words, by sharing values that the businesses evaluated as “additional” and available for contributing to “public good”.

Links of such approaches to company business interests tend to be weak and to change often. This results in an unstable environment as to the scope and time frame of availability of “CSR related” resources. This in turn often leads to uncertainty, especially for potential beneficiaries of such assistance, but it also concerns corporate strategy.

Responsible business does not have to mean just traditional CSR. It can consist of “creating shared value”.

This concept has been articulated by professors M. Porter and M. Kramer in their famous article “Creating Shared Value” (CSV) in the Harvard Business Review. Their approach fundamentally influenced the view on the role of businesses in society.

What is Shared Value?

Shared value emerges when companies admit that huge opportunities for innovative solutions of social problems can coincide with their business goals. Companies actively seek opportunities to react – within their business strategies – to unmet societal needs in a way that can benefit both the society and the long term competitiveness of a company.

What characterizes traditional CSR?

Motivation: company reputation

Focus: corporate citizenship, philanthropy, sustainability

CSR stems from internal decisions about what to support, or reacts to external pressure

It is separated from maximizing profit

Agenda is set by external stakeholders, eventually also by personal preferences

Results are limited by CSR projects budget

Benefits for the company: reputation, risk reduction

Social benefit: a useful project

What characterizes Shared Value?

Motivation: competitive advantage

Focus: joint creation of values for both the company and the society

Shared Value is integrated into the overall company competitiveness

It is integrated into maximizing profit

Agenda is connected to the company and is based on internal needs and company strategies

Results can rely on business operational resources

Benefits for the company: new business opportunities

Social benefit: large scale sustainable changes

When a prosperous company uses its resources, knowledge and management skills to solve problems that it understands and that affect it, it will have much greater influence on the prosperity of society than any other institution.

— MICHAEL E. PORTER, 2006 —

Shared Value Společenská hodnota | Innovation Footprint

Questions we should be asking ourselves:

Which social issues are relevant for the business our company is engaged in ?

Will influencing these issues bring tangible impact on the society and on our company business ?

Does our company understand the causes of specific social issues ? Can we offer a relevant solution ?

Relevantní společenská témata Shared Value | Innovation Footprint

We wrote about Shared Value

Firmy by neměly nic vracet, měly by spíš vytvářet

Tento přístup k odpovědnosti vede ke vzniku dílčích aktivit a projektů, v jejichž rámci se firmy snaží pomáhat světu kolem sebe, ale často v oblastech, které nesouvisí s jejich podnikáním. O dopadech těchto aktivit už před časem pochyboval přední odborník na podnikatelské strategie Michael E. Porter.

CSR je investice, ne mecenášství

S jakou jistotou lze říci, zda jsou tato tvrzení plná etických imperativů skutečně relevantní? Z jakého důvodu by firmy měly zohledňovat potřeby společnosti? Proč by se vlastně nemohly bez CSR obejít? A jak moc ovlivňuje CSR finanční výsledky společnosti? A nabízí se ještě podstatnější otázka.