...Shared Value Creation; Revolution or Rhetoric? Abstract The concept of Creating Shared Value(CSV), was made popular in a Harvard Business Review(2011)by M. Porter and R Kramer defines as, policies and operational practices that enhance the competitiveness of the company while transforming social problems which is related to the corporation into business opportunities and simultaneously yield greater profitability(Porter, Kramer,2011). As it sounds, it is a seductive promiseand has so far received obscene attention in the business markets and among business educators. Both authors seeks to regain trust in “business and society who has pitted against each other so long” …”Learning how to create shared value is our best chance to legitimize business”(Porter, Kramer, 2011) is how companies were viewed as prospering at the expense of the community. With both aims of evaluating and analysing the concept of creating shared value, in this paper, we suggest how CSV can help businesses harness its full potential by simply creating economic value while simultaneously creating value for society. Focusing on making the right kind profits, companies should look beyond just merely maximum profits but also integrates social benefits at the same time; starting a positive cycle which reconnects business with society. In CSV, it represents a new approach for businesses moving beyond CSR approaches in the past. However promising this bold new approach is, it has also created polarized...
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...conducted, collectively accountable change directed towards shared values or principles. (Watkins and Marsick 1992: 118) We can see much that is shared in these definitions – and some contrasts. To start with the last first: some writers (such as Pedler et. al.) appear to approach learning organizations as something that are initiated and developed by senior management – they involve a top-down, managerial imposed, vision (Hughes and Tight 1998: 183). This can be contrasted with more ‘bottom-up’ or democratic approaches such as that hinted at by Watkins and Marsick (1992; 1993). According to Sandra Kerka (1995) most conceptualizations of the learning organizations seem to work on the assumption that ‘learning is valuable, continuous, and most effective when shared and that every experience is an opportunity to learn’ (Kerka 1995). The following characteristics appear in some form in the more popular conceptions. Learning organizations: Provide continuous learning opportunities. Use learning to reach their goals. Link individual performance with organizational performance. Foster inquiry and dialogue, making it safe for people to share openly and take risks. Embrace creative tension as a source of energy and renewal. Are continuously aware of and interact with their environment. (Kerka 1995) As Kerka (1995) goes onto comment, the five disciplines that Peter Senge goes on to identify (personal mastery, mental models, shared vision, team learning and systems thinking) are the...
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...trends. Shared Value, Conscious Capitalism, and Social Business. Throughout this paper, I will be discussing these major trends and demonstrating how different businesses embody them. These major trends do not always work together. However, many businesses demonstrate one or two of these trends. In today’s world, corporate social responsibility is something that every business should make a great effort to incorporate into their business model. This is important because corporate social responsibility is how businesses are impacting society. CSR is a way for businesses to have some accountability in making sure their products or services do not impact the environment or community in a negative way. Throughout the next few pages, you will read examples of companies in our current society and prove how these companies are applying these trends to their business models. Shared value is the first trend of CSR. Shared value was introduced in a Harvard Business Review article. Strategy & Society: The link between Competitive Advantage and Corporate Social Responsibility was published in late 2006 by Michael E. Porter and Mark R. Kramer. Both Kramer and Porter helped spread the word about shared value and revealed how it works and why shared value was a necessary component to society. Porter has been considered to be the front-runner on competitive strategy and is the chair at the Institute for Strategy and Competitiveness at Harvard Business School. Shared value...
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...article is meant to fix a problem. What is the problem? MICHAEL PORTER: Well, the problem is I think we've gotten into a very vicious cycle in thinking about the relationship between business and society. And really, the purpose of capitalism, and the benefits of the capitalist system to society, and to meeting society's needs-- needs like improving people's lives, and improving the health of communities. We've gotten into a cycle where, I think, business has evolved and thinking about business management has evolved, in a direction that we've narrowed the scope of how you create economic value. And increasingly, companies are being perceived as creating profit at the expense of the community, not creating profit that actually ultimately benefits the communities. As a result of this, I think government has increasingly seen business as a problem, as a source of bad things in society. And the mindset is becoming increasingly to regulate, to control, to tax. And ultimately, now often political leaders are unable to pursue business-friendly public policies, because the political environment almost forces them to be tough on business. Despite the fact that we know at some deep level, business and society need each other. But we've kind of gotten ourselves into a bad place. ADI IGNATIUS: But, I think a lot of business people would argue, what we do is run businesses, and we make profits. And when we're successful we hire people. And that's all we can do. To have an agenda beyond that...
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...Corporations can create shared value by using their core capabilities in ways that contribute to both social progress and economic success. Some developing countries have experienced phenomenal economic growth, but that growth has not been inclusive. In recent decades, developing countries have experienced a rapid rate of economic growth. Although this has led to higher incomes and better health for many Developing countries, we still have far to go to make this growth truly inclusive. Developing countries are expected to fall short on several Millennium Development Goals: by 2015, it is expected that 40 percent of Developing countrie’s children will remain undernourished, and Developing countries will have progressed only halfway toward its goals for decreasing infant mortality. Inequality, poor public health, and environmental degradation will increasingly constrain their economic growth. Corporations play a critical role in achieving inclusive growth. Government is often seen as the answer to society’s problems, but spending by the Government of Developing countries alone will likely be insufficient to address these critical issues. governments can encourage contributions from the private sector by passing legislation and using its purchasing power to create a supportive, enabling environment. Philanthropy can also help catalyze change, but charity has a limited ability to sustainably achieve scale. The private sector, however, possesses skills and technologies necessary...
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...just a products and service trader. This concept however encompasses many different ideas and different implications as to what is means to be socially responsible. Michael Porter’s article “Creating Shared Value” looks at, “the connection between societal and economic progress” (Porter). The article written by Archie Carroll and Kareem Shabana titled, “The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice” looks at how social responsibility can provide “incentives from a primary corporate economic/financial perspective (Carroll).” This can all be tied together with the new emerging type of corporation, a B-corp. A B-corporation is concerned with the triple bottom line; people, planet, and profit. Many businesses are jumping on band wagon of social responsibility while others are standing back to evaluate the progress of this new idea. Is there any stock in what Michael Porter or Archie Carroll and Kareem Shabana are saying? Do their ideas conflict with one another or support each other? Do B-corporations fit into this idea of social responsibility? Michael Porter article looked at the things that businesses could do to create shared value. Shared value as Porter explains means long term sustainable business that benefits multiple stakeholders. Porter’s article focused on different ways to create this shared value. He looked at reconceiving products and markets. This could mean looking at the question, “Is this product good for our...
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...Creation of Shared Value Over the last 30 years, absolute poverty worldwide has fallen 20%, yet poverty levels in Africa have remained static, hovering around 40% of the continent’s population over the same time period (“Poverty”). Poverty is endemic to many developing nations in Africa, and many attempts have been made to ameliorate the socio-economic toll that it wreaks on the region. However, the continued predominance of poverty in the region today makes it clear that previous attempts at traditional poverty eradication have failed. More recently, the rise of social entrepreneurship has revitalized the discussion about poverty alleviation, with companies committing themselves to creating transformational benefit for the disadvantaged segments of society (Martin 151). TOMS Shoes is such a company that has made a commitment to social responsibility. Unfortunately, TOMS and its footwear draws a great deal of criticism, and there is mounting evidence that creating shared value, as seen in Oliberté Footwear’s business model, is a more effective route to poverty alleviation. Ultimately, we must carefully consider the advantages of Oliberté’s shared value over TOMS’ social responsibility, and call for future social business models to take note of what both of these social enterprises do right and wrong to create the best solution for bringing upward social mobility to destitute Africans. To bring about upward social mobility, let us first define it and consider why it is so crucial...
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...other half of the shared services battle 2 Transforming the service delivery model for back-office functions such as finance, procurement, human resources (HR), real estate, and information technology (IT) continues to be a top priority for many companies. Such efforts usually aim to achieve several interrelated goals: to increase the function’s strategic contribution to the business, to improve operational efficiency and reduce cost, and to drive global data and process consistency. One widespread strategy for pursuing these goals is to establish a shared services organization (SSO) to execute back-office functional processes on behalf of multiple operating units. However, our experience shows that such efforts often fail to yield their intended benefits. Why? One important reason, in our view, is that many companies tend to focus almost exclusively on the processes to be moved into the SSO while paying little attention to the retained organization’s design and operation. We have seen many companies underestimate both the level of effort to get the retained organization “right” and the extent to which failure to do so may diminish the value of the shared services program. On the other hand, companies that do make the necessary investment in their retained organizations have a greater chance of reaping satisfactory returns on their shared services investment. Figure 1: Characteristics of the four types of functional activities Method of adding value Low cost/defined service...
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...questions that formulate the business model. Such as • What is our relationship with our customer? What are they offering the business? • Will this customer be in relationship for the short term or long term? • Is there one customer that controls our business? • What marketing or other strategies guarantee new long-term customers? • How do we increase the return on investment from each customer with repeat business? A business plan is a living document that presents the strategies that will drive the business toward the future and sustain it in the present. The plan lays out the mission, and the following strategies marketing, advertising, sales, and most importantly the financial health of the business. It communicates the roles, responsibilities, and goals of leadership to navigate the business into profitable territory and avoid any threats to the success of the business. 2. What are the eight key components of an effective business model? Customers--- There has to be a ready consumer. Willing to purchase your product or service. Resources and Capabilities-Access to capital, expertise in the field, suppliers, supply chain, and delivery chain These are necessary to support the business, provide innovative products and services, get the product to market quickly, and supply the product at the best possible price. Value Proposition-This is a proposition that attempts to provide the benefits for a consumer explaining why they should purchase a product or service. Marketing...
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...collapsed due to oversight from supervisors. 1129 people were killed and an additional 2515 were injured as a result. Many of the higher floors didn’t have permits to be legally constructed[1]. The workers were making 52 dollars a month in wages and lived below the poverty line. The clothes manufactured here would be exported and sold in stores like Walmart. Situations like these exist around the world, but only get recognized when disaster occurs. Businesses are some of the biggest entities in the world. Some companies are even bigger than nations; 50 of the largest economies in the world are run by multinational companies; like General Electrics and British Petroleum which are bigger than UAE and Vietnam respectively[2]. The United States Government does provide 21 billion dollars in non-military aid to foreign countries, but this is nothing compared to the impact businesses can have. The textile industry in America alone generates 248 billion dollars in revenue and employs 75 million people globally. Businesses have the capability to empower workers and improve their mission while creating shared value[3]. What is shared value? CSV or Creating Shared Value is the process of aligning economic interests with societal interests to create value for stakeholders and shareholders. Corporations have taken on CSR or Corporate Social Responsibility, but this is a short term solution and is a response to external pressures, unlike CSV. Whereas CSV can improve a company’s profits...
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...Simulation February 4, 2015 SmartMart Simulation 1. Set out your overall strategy for SmartMart, explaining why you elected to follow this strategy, and how each decision you made contributed to this strategy. Scenario 1: Grow to Compete with Big-Box Mart: 50% of growth in the consumption of organics is driven by the offering of organics at low-cost producers, like Big-Box Mart. Hence, it is essential to compete in this space.The costs of implementing this aggressive growth strategy is significant and there is also a higher payoff. Store revenues are expected to jump from $3M annually to $30M. If SmartMart could retain its distinctive advantage, this strategy would be most profitable because margins would be slightly lower, but volume would increase almost 10 fold. There would a net lower environmental impact as there are efficiencies produced by centralizing the use of trucks and transportation. Moreover, giving the option of a one stop shop to customers would give the benefit of increased sales to SmartMart. Scenario 2: Introducing Bio-fuels: SmartMart has worked with leading researchers and scientists to find the optimal blend of bio-fuels and gasoline. This improved blend of fuel increases an average car's miles per gallon (MPG) by as much as 20%. By offering this innovation at select SmartMart stores, the company stands to gain from the increased revenues of fuel sales, as well as the increase in brand perception. SmartMart should move ahead by creating...
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...Performance [pic] Performance comprises four interlocking elements. © iStockphoto/dt03mbb Is your organization's performance as good as it could be? What could be changed to improve things and why would this help? Does the key lie in the work itself? Or with the people doing it? Should you reorganize the corporate structure? Or try to change the prevailing culture? And why does one organization seem to thrive on a certain corporate structure or type of work, while another struggles to make a profit? The answer lies in understanding the key causes or drivers of performance and the relationship between them. The Congruence Model, first developed by David A Nadler and M L Tushman in the early 1980s, provides a way of doing just this. It's a powerful tool for finding out what's going wrong with a team or organization, and for thinking about how you can fix it. Understanding the Tool The Congruence Model is based on the principle that an organization's performance is derived from four elements: tasks, people, structure, and culture. The higher the congruence, or compatibility, amongst these elements, the greater the performance. For example, if you have brilliant people working for you, but your organization's culture is not a good fit for the way they work, their brilliance will not shine through. Likewise, you can have the latest technology and superbly streamlined processes to support decision making, but if the organizational culture is highly bureaucratic, decisions...
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...Corrie Sue Bettles Chapter One Business Now: Change Is the Only Constant Review Questions 1. What factors contribute to the rapid pace of change in business? Is the pace likely to accelerate or decrease over the next decade? Why? Industries, and technologies rise and the also fall sometimes. In the next decade most Industries and Technologies will accelerate with the common buying of things. 2. What role does entrepreneurship play in the economy? Who stands to gain from the success of individual entrepreneurs? How do other parties benefit? Entrepreneurship plays a somewhat big thing for the economy. The employees of the entrepreneurship are the ones that gain from the success of the individual entrepreneurs. Other parties benefit by this, is because they get to take credit of what entrepreneurs should be getting. 3. When did American business begin to concentrate on customer needs? Why? The relationship era is when American businesses begin to concentrate on customer needs. That way they could keep building up their businesses by word of mouth from the customers. 4. How do nonprofit organizations compare to businesses? What role do nonprofits play in the economy? How do they interact with businesses? Nonprofit organizations play a critical role in the economy, often working hand in hand with businesses to improve the quanity of life in our society. Nonprofit organizations are still businesses in every other sense...
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...successful organization as defined by a number of business criteria. Apply the principles stated in the section “Working Today” to describe why Vancity has achieved this distinction. Vancity understands that getting extraordinary results from their employees requires effort not only from their employees, but also from the organization. They are an accurate representation of what you call an intellectual capital as they consistently maintain a healthy and committed workforce by providing a comfortable and friendly environment for their employees. At work, their employees are able to complete tasks while simultaneously listening to music and enjoying the benefits of dressing casually. Their organization is represented by many unique intelligent individuals that are given the luxury of making a schedule that best fits their needs. This helps to maximize their potential as they are able to work stress free as there is a healthy balance between work and their other commitments. Providing a stress free and flexible environment helps to get the best results from each of its employees. There is a famous quote, “do what your doing when your doing it”, this will help you to accomplish tasks in effectively and Vancity does a great job at providing an environment where distractions are limited and productivity is high. 2. Describe how Vancity creates value for the customer using Figure 1.2. Follow one aspect of Vancity’s service to the customer through this model. Vancity is a credit union...
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...Organizations That Are Built to Change Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published. REPRINT NUMBER 48107 IN CONTEXT Designing Organizations That Are Built to Change As the pace of globalization and social change quickens, executives are correctly calling for greater agilit y, flexibilit y and innovation from their companies. Largely ignored in these pleas, however, is the simple fact that organizations have been designed to seek sustainable competitive advantages and stability. Indeed, buried deep in the managerial psyche, and bolstered by decades of theory and practice, is the assumption that stability is not only desirable and effective but also attainable. In their classic book The Social Psychology of Organizations, Daniel Katz and Robert L. Kahn note, “One can define the core problem of any social system as reducing the variability and instability of human actions to uniform and dependable patterns.” The popularity of process improvement efforts, from total quality management to Six Sigma programs, provides ample evidence of the consuming desire for stability and predictability in today’s organizations. In fact, those are the very qualities rewarded by the financial markets. It is not surprising, then, that most large-scale change efforts fail to meet their expectations. A major problem is that many of those efforts have focused primarily on developing more effective...
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