Tuesday, May 1, 2012

Shared Value or Mission?

In the “Creating Shared Value.”[i], the authors “claims companies must take the lead in bringing business and society back together” and the solution is “shared value. This involves creating economic value in a way that also creates value for society by addressing needs and challenges”. The authors also insist “the concept of shared value blurs the line between for-profit and nonprofit organizations”. Giving the fact that I have work experience for both this claim really opened my eyes.

When I was working at for-profit company, I always felt uncomfortable with the “capitalist” atmosphere. The company and my bosses just focused on profit and there was no time to think about social responsibility. Moreover, they sometimes took me out from organizational integrity for profits. This company culture reduces employees’ motivation and loyalty, and deteriorates its reputation. The concept of shared value has a possibility to change this organizational culture.

On the other hand, non-profit companies also have problems; one of the most serious problems is its sustainability. Non-profit companies tend to pursue its mission without sustainable strategy, especially tiny non-profits. My non-profit company was no exception, as a result, the non-profit was always in financial crisis and it was not able to fix it. Recently, however, non-profits have begun to adopt business management style for sustainability and those activities create new economic markets. Basically, the blurring of the boundaries between success for-profits and non-profits is certainly evident.

From my own experience, I think accepted business style by non-profits is easily than adopted the concept of shared value by for-profits. Adopting business style is essential for non-profits to think about their sustainability. However, for-profit companies who have to invest their money to conduct shared value operations. It is hard for-profits companies to purely focus on such a belief, especially in this severe economic situation. In short, cost performance measures are significant key factors to adopt the concept of shared value or not.

A successful company can afford to invest shared value and this investment might strengthen its reputation. But how do other companies follow suit? This might be one of the watersheds between for-profits and non-profits.  



[i] Michael E. Porter, Mark R. Kramer. "Creating Shared Value" Harvard Business Review February 2011

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