Wednesday, December 9, 2015

Real value to shared value

Shared value strategically reminds us that we are accountable for our actions. We collect the outcome of what we conceived and nurtured in the past. This is a logic in most social and economic aspects. If an industry throws its disposals out in the rivers, then we’ll have polluted streams and oceans. If a factory decides to outsource all of its main production overseas, and explores the land and natural resource of a small town, then that factory will not be contributing to the local society, instead, it will be harming the local resources and causing labor stress. The key takeaway from this is, we are accountable for our surrounding in our actions and decisions.

The concept of the shared value strategy leads companies to create business value by embracing social problems that come across that business. A competitive business should aim to be in an environment that promotes economic growth, inclusion and sustainability. Under the shared value spotlight, companies interact directly with civil organizations, governments and society, creating opportunities and addressing economic and social problems.

In their article “Creating Shared Value”, Michael Porter and Mark R. Kramer point out that shared value can be created by reconceiving products and markets. It also comes from redefining productivity in the value chain. If you review your suppliers and re-think your market strategy by addressing the social and environmental stresses in the value chain, you may increase your productivity. Shared value can make you more productive and competitive.

Also, companies can create shared value by having a strong and supportive environment surrounding the company’s locations. Clusters strengthen competitiveness in regions and allows social and economic development to take place. The grouping of companies in a territory, attracts universities and related institutions that have a vocation to work in synergy to perform economic growth projects on innovation and social development.


However, we can’t always rely on the productivity increase and regional prosperity to assure that true value has been created. When thinking of shared value, global issues ought to be addressed. When we operate in a globalized economy, clusters must scale their shared value strategy to greater innovation and social progress. The concept has gone beyond corporate responsibility. It is addressing straight forward issues on child labor work in southeast Asia, or carbon emissions from industrial plants, for example. These are global issues that affect global society. An open dialogue on emerging development challenges is vital to engage global society in addressing true social impact in order to create real value for companies and their surroundings.

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