Thursday, December 10, 2015

Societal Value creation should be the focus of Business

The article "Creating Share Value" outlined how important creating societal values is mutually beneficial for both companies and communities that are somehow involved in the business operations for such companies. Enabling such communities to involve in a more productive manner, had advantages for the businesses both in terms of cost reduction and societal impact.

In the era when capitalistic economies began to emerge, they provided a solution to the drawbacks of aristocratic economies and overall created a value to the society. Even while the focus was on the profits and wealth generation, one way or other they provided a solution to the society. The socialist and communist economies models focused only on the welfare of the society as a whole. These were the branched economic models that set out to solve the problems of the society in some other manner. The main point that i want to stress here is, economies and business in those economies arise out of the needs of the society. I would boldly state that anything that doesn't satisfy the needs of the society is doomed to fail in the long run.

Somewhere along the line, businesses aimed only at profit generation and now we have come to point that creating societal value is additional activity for businesses. Due to this we have seen only the growth of a particular demographic and the others left of this. Now businesses want to cover all demographics for their growth and some of the issues they find is that certain demographics can’t give their anticipated profits. Growth of the society as a whole is going to benefit businesses, organizations, governments and the society overall.

Now with the Societal changes happening, people focus more on the value of their well-being rather than their wealth. The healthcare industries have started riding on this wave to provide value in form of health and they benefit more because they focus on the impending need of the society. These models have their strategy based on value creation to the society. In some cases we can see how certain companies marketing strategies only aim on how much of an additional value their products can provide, apart from the necessity of their products to the consumers.

 The present generation focuses on the products that can add more value to their life, than just satisfy a specific need. Internet of Things is an idea that had its evolution because of this trend. The business that focus on creating values to the societies are the ones that are going to be huge players in the next wave. In one of my earlier blogs i discussed how Resource sharing is an emerging trend. Now i can clearly understand how importance of values is connected to the emerging trends. Instead of having corporate social value as one other activities in the strategy, social value creation should be the integral focus of strategies in the coming years.


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