The ultimate guide on creating shared value michael porter. The first was to identify peoples understanding of creating shared value. Pdf how creating shared value differs from corporate social. The presence of shared values determines the ability to create shared value, shared values shared values. Had you heard about creating shared value before joining the te collaborative learning series. Creating shared value starts with an explicit strategic decision by corporate leaders. Companies could bring business and society back together if they redefined their purpose as creating shared value generating economic value in a way that also produces value for society by addressing its challenges. How to reinvent capitalismand unleash a wave of innovation and growth as well as subsequent reports by the associated social impact consulting group, fsg 5.
Operated by fsg with support from a network of funders, the shared value initiative works with partners to curate. Innovating for shared value in the meantime, companies can use a straightforward process that we derived from studying more than a dozen major corporations, including alcoa, cocacola, intel, intercontinental hotels, nestle, verizon, and novo nordisk. This new approach leverages the concept of shared value to help companies find new ways to grow revenue and increase productivity by raising levels of student and workforce achievement. Companies initiate and drive shared value programs partner with companies and ngos to drive shared value initiatives philanthropists enable implementation of new shared value business models in their fields ngos governments partner with companies and ngos to enable and support shared value strategies. Jun 04, 2012 videowhat does the term creating shared value mean. While the term is new, the practice of shared value at nestle dates back to 1867. Many of the companies discussed in this article are fsg clients or have financially supported fsg s research. A howto guide for the new corporate revolution csv. We believe that our company will be successful in the long term by creating value, both for our shareholders and for society. Under this framework, economic value could expand while simultaneously solving societal challenges and needs. The foundation strategy group fsg, a nonprofit consulting firm is among the founding members of the creating shared value strategy and in their report measuring shared value discusses the ways in which companies can create value by reconceiving products and markets, redefining productivity in the value chain and enabling cluster development. Building a global shared value community in collaboration with its partners, fsg has established the shared value initiative, a multistakeholder effort that aims to drive adoption and improve implementation of shared value strategies leadership council supporters. Our international teams work across all sectors by partnering with corporations. When enterprises act as business operations and not as charities, they can turn profitable and work towards improving the world.
In 2012, kramer and porter, with the help of the global notforprofit advisory firm fsg, founded the shared value initiative to enhance knowledge sharing and practice surrounding creating shared value, globally. After the publication of creating shared value, fsg is spreading the shared value culture through research, reports, and by promoting and encouraging shared value practices through consulting activities. Measurement approaches that link social and business results are vital to unlocking shared value for companies and scalable solutions to social problems. Over and above all, there is more to creating shared value than meets the eye. Its not just about corporate social responsibility or philanthropy. Until recently, it was not considered the business of big pharma to solve societal problems, at least beyond its narrow, though vital, role in providing medicines.
Matten, contesting the value of creating shared value, vol. Todays businesses take the blame for many of societys economic, social and environmental woes, despite the launch of countless corporate social responsibility initiatives in recent decades. Creating shared value entails embedding a social mission in the corporate culture. The solution, as espoused by michael porter, revolves around creating shared value csv.
In recent years business increasingly has been viewed as a major cause of social, environmental, and. Creating shared value can be broken out into ten key building blocks from adopting a clear vision to measuring, learning from, and communicating performance. Creating shared value creating shared value csv is fundamental to how we do business at nestle. Kramer are the mckinsey award winners for creating shared value. Corporate policies and practices that enhance the competitiveness of a company while simultaneously advancing social and economic conditions in the communities in which it operates create economic valueby creating societal value. Measuring shared value wisconsin afterschool network. Will you use creating shared value to help guide your sourcing strat egies in the future. Invest ment sinlongterm business com petitiveness thatsimul taneou sly addr ess socialandenvironm ental objectiv es 3 f o r am edti lsc unf hv,p m.
A seasoning cube with a social impact produced at our flowergate factory in nigeria, maggis new naija pot seasoning responds to local tastes and the preferences of todays consumer for simple and familiar ingredients, while offering an improved nutritional profile that contains less salt. Creating shared value is a framework for creating economic value while simultaneously addressing societal needs and challenges. Porter and mark kramer, identified measurement as a key driver of shared value adoption. When businesses act as businessesnot as charitable donorsthey can improve profitability while also improving environmental performance, public health and nutrition, affordable housing and financial security, and other key. Policies and practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Cofounder of fsg, a global social impact consulting firm. In doing so, the study provides a preliminary outline for csv analysis. A shared value approach reconnects company success with social. What is good for the community is good for business all profit is. Fsg helps businesses in developing strategies addressing social issues. How creating shared value differs from corporate social. Porter harvard business school fsg csv leadership summit june 9, 2011 this presentation draws on ideas from professor porters books and articles, in particular, competitive strategy the free press, 1980.
As porter espouses, shared value should not focus on the redistribution of the value created through donations and philanthropy the main difference between csr and csv is that csv bases the whole business on csr, whereas csr itself is generally one or two departments of a. Shared value creation implies a more internally focused role for csr, sustainability, and philanthropy staff with a strong emphasis on facilitation and change management. A company can achieve this by finding opportunities to increase revenue or decrease costs by addressing social or environmental problems relevant to their business. Creating shared value as business strategy harvard business. Fsg and the shared value initiativethe idea for a learning community devoted to shared value stemmed from initial success introducing the concept to corporate audiences. Built to create shared value the recent renovation of maggi seasonings in africa is a prime example of how nestle creates shared value. Shared value concept could reshape capitalism and its relationship to society. Eventually, some five yearsaftertheirinitial formulation, the fullyrealized elaboration of sharedvalue was. Our activities and products should make a positive difference to society while contributing to nestle s ongoing success. This led to nestles 2006 report on creating shared value in latin america11 and from 200812 onwards biannual, global, companywide creating shared value csv reports. Creating value harnessing the benefits of solving social, environment and economic problems the aim is to create a better reputation through participation in charity initiatives creating an economic value based on creating value for society through costcutting 4.
Creating shared value csv is a business strategy aimed ata. It was the catalyst for our yearlong effort to highlight content that called on. A number of experts have stated that today csv still strongly resembles strategic csr. Nov 18, 2011 in october 2011 sig hosted mark kramer, co. Csv explained institute for strategy and competitiveness. Connection to the production program existence of a commitment to. This presentation draws on ideas from professor porters books and articles, in particular, competitive strategy the free press, 1980. Taken together, these building blocks form a blueprint for translating a shared value agenda into action. The link between competitive advantage and corporate social responsibility. Companies could bring business and society back together if they redefined their purpose as creating shared valuegenerating economic value in a way that also produces value for society by. Could creating shared value be the next stage of evolution for csr. Comm5710 course outlines creating shared value unsw.
Redefining capitalism and the role of the corporation in society. Companies initiate and drive shared value programs partner with companies and ngos to drive shared value initiatives philanthropists enable implementation of new shared value business models in their fields ngos governments partner with companies and. It already has an acronym, csv, and its in fact a powerful concept for companies to use. Creating shared value csv and creating competitive business. Corporate policies and practices that enhance the competitive advantage and profitability of the company while simultaneously advancing social. Fsg offers a range of shared value services to companies, from targeted efforts to address specific questions about how a company can create shared value to indepth multiyear engagements that accompany clients from earlystage vision through implementation to realize business opportunities. Videowhat does the term creating shared value mean. Business success with a higher purpose that in turn drives.
The concept was further expanded in the january 2011 followup piece entitled creating shared value. Cofounder and managing director of foundation strategy group fsg and creating shared value pioneer mark kramer and professor michael e. Since henri nestle first launched the infant cereal, farine lactee. In particular, to better understand what means shared value creation. We realized that in order to take the idea to a global scale, corporate leaders needed a platform through which new and experienced shared value practitioners could learn, connect, and evolve shared value practice. Redefining capitalism and the role of the corporation in society professor michael e.
Pdf creating shared value in international business. 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. The objectives of this conceptual perspective article are to explore the extent to which the umbrella concept of creating shared value csv is embraced and utilized by the international business. This study attempts to make a contribution to theory by disentangling the concept of creating shared value csv from corporate social responsibility csr. Fsg is a nonprofit consulting firm specializing in strategy, evaluation, and research. The next transformation of business thinking lies in the principle of shared value. This study attempts to make a contribution to theory. Shared value practitioners launched with fsg support shared value initiative. Cofounder and managing director of foundation strategy group fsg and.
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