Tuesday, December 8, 2015

Porter and Kramer Undermine Their Point by Using Bad Examples

Shared value created by capitalism sounds appealing. I want to believe in it because it appears to elevate the lives of some of society’s poorest citizens. Some of the examples discussed in the article are Walmart’s transition to locally sourced food and Nestle’s partnerships with cocoa producers in the Ivory Coast.

While I can appreciate the view that companies can create some value for society by engaging in activities that have positive effects for society while increasing profits, I think that the authors undermined their point by including Nestle and Walmart as points of reference. For example, the farmers who supply Walmart are not making a profit as they need to supply produce at extremely low prices to get/keep a contract with Walmart. This is true for both meat producers as well as those who produce fruits and vegetables. Nestle, hailed a savior for cocoa farmers in the Ivory Coast, is still facing lawsuits for gross abuses in child labor as late as 2015. There is also child trafficking and slavery involved with cocoa production.

Porter and Kramer claim that “Too many companies have lost sight of that most basic of questions: Is our product good for our customers?” They claim that food companies who have traditionally relied on (manufactured) taste to drive consumption are now focused on nutrition. I would completely disagree with that statement, especially considering that celebrities such as Oprah are sued for speaking the truth about meat or other food-like products. Coke and Pepsi solely exist to market soda, which we know to be horrible for human health.

The article would have served its point better by referring to companies such as Seventh Generation, Patagonia, or Whole Foods. Perhaps I am missing the authors’ point but my sensibilities don’t allow me to support companies like Walmart or Nestle even if there is a small payoff for society. The concept of “shared value” sounds like a PR move – a way to make it seem like companies are acting better than they actually are.

Porter and Kramer state that the result of a traditional business school education has resulted in public cynicism. That is one fact about which they are correct – I am indeed cynical about the sincerity of nearly every large corporation when it claims to be doing something to benefit society.

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