Concept reinventing business purpose to include social benefit and profit
Creating shared value (CSV) is a business concept first introduced in a 2006 Harvard Business Review article, Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility.[1] The concept was further expanded in the January 2011 follow-up piece entitled Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society.[2] Written by Michael E. Porter, a leading authority on competitive strategy and head of the Institute for Strategy and Competitiveness at Harvard Business School, and Mark R. Kramer, of the Kennedy School at Harvard University and co-founder of FSG,[3] the article provides insights and relevant examples of companies that have developed deep links between their business strategies and corporate social responsibility (CSR). Porter and Kramer define shared value as "the policies and practices that enhance the competitiveness of a company while simultaneously advancing social and economic conditions in the communities in which it operates",[2]: 6 while a review published in 2021 defines the concept as "a strategic process through which corporations can turn social problems into business opportunities".[4]
Menghwar and Daood (2021) conducted a comprehensive review published in a top British journal, ranked second in the field of management.[4] In this article, they further refine three characteristics of creating shared value and define CSV as "a strategic process through which corporations can solve a social problem which is relevant to its value chain while making economic profits".[4]: 467
The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Supporters argue that recognizing and capitalizing on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine, or even rescue,[5]: 1 capitalism.
Critics, on the other hand, argue that "Porter and Kramer basically tell the old story of economic rationality as the one and only tool of smart management, with faith in innovation and growth, and they celebrate a capitalism that now needs to adjust a little bit".[citation needed] One critic regards the CSV concept as a "one-trick pony approach", with little chance that an increasingly critical civil society will buy into such a story.[6]
In 2012, Kramer and Porter, with the help of the global not-for-profit advisory firm FSG,[3] founded the Shared Value Initiative to enhance knowledge sharing and practice surrounding creating shared value globally.
^"Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility". Archived from the original on 2015-04-06. Retrieved 2011-07-28.
^ ab"Creating Shared Value. Harvard Business Review; Jan/Feb2011, Vol. 89 Issue 1/2, p62-77, 16p". Archived from the original on 2012-06-30. Retrieved 2011-07-28.
^ ab"FSG, Inc". Retrieved 30 October 2022.
^ abcMenghwar, Prem Sagar; Daood, Antonio (October 2021). "Creating shared value: A systematic review, synthesis and integrative perspective". International Journal of Management Reviews. 23 (4): 466–485. doi:10.1111/ijmr.12252. hdl:11385/206035. ISSN 1460-8545. S2CID 233641604.
^Cite error: The named reference meyer was invoked but never defined (see the help page).
^Beschorner, Thomas (2013). "Creating Shared Value: The One-Trick Pony Approach" (PDF). Business Ethics Journal Review. 17 (1): 106–112 [109]. doi:10.12747/bejr2013.01.17.
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