Porter and
Kramer (2011), shared insights about how boundaries need to be set
for capitalism. To prioritize societal and environmental issues and
challenges within the organization while achieving economic
success. In order for companies to reach a competitive edge, they
need to balance their short-term costs against their long-term
goals of profitability. While doing so, the global
businessrecognizes the importance of building bridges between
business, governance and communities to create ways to comply with
societal needs, increase efficiency and branch out into newer
markets and create differentiation. New growth opportunities and
improvement of productivity gives rise to sustainability which
inturn motivate and attract employees, business
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The traditional
approach of CSR differs from shared value as traditional roles fail
to recognize the links between the improvements of community and
clusters which enhance productivity thus bridging links between new
products, customers, revenue and profits.
Some distinctive differences between CSR and CSV, Porter and
Kramer (2011).
CSR is traditionally, in business terms, about being a
respectful corporate citizen investing in social causes for
positive social and environmental impact.
Shared Value is changing how the core of the business
operates. In order to deliver healthy returns it focuses on
strategy, structure, people, processes and rewards.
The difference of CSR is that it does not integrate
business activities while CSV is about incorporating social and
environmental impact into the business, causing a combination to
initiate economic value.
Businesses have the foresight to want to be part of the
solution. With charitable donations, companies and employees expand
their levels of engagement so that their core business models
improve the well-being of people, eradicate negative extremes, and
is beneficial to their bottom
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Multinational
corporations are seen as contributors to problems as well as
solutions to economic value creation. As the surge of globalization
reduces the gap between continents and international trade
increasing, the issues from one country can have an effect in
another. As Corporate citizens they are well equipped to influence
and create awareness to these international problems.
I believe a company can create shared value through
interventions and innovations, improving the competitiveness in a
companys
value
chain. By developing an inclusive business strategy,
commercial businesses can lower supply costs, improve productivity,
quality of products and expand the market with the involvement of
poor people thus creating long term economic value.
The value chain is linked and includes all parties from the
conception of a product idea, through different phases until the
distribution to the end consumer. The value chain can be redefined
as the core of inclusive business strategy to encourage trade
relations, ensure trust in the brand and its reputation. Some of
the ways international business can create share value through
Inclusive business strategies within the value chain
can
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