Wednesday, April 27, 2016

CSR vs Shared Value

After reading Porter and Kramer’s Creating Shared Value, I think that the concept of shared value may be similar to corporate social responsibility (CSR) however they are quite different. While the concept of customer strategy and social responsibility and social impact are not new, I think the concept of share value is offering a more holistic approach. They are arguing for companies to actively seek solutions for the social problems in society, not only because it is the just thing to do but because it could potentially be profitable.  Most companies have a separate CSR program; however, the concept of share value urges companies to intertwine “doing good” for society within their company structure. It is a matter of a company that doing good vs. a company that is doing well by doing good.  One difference between CSR program and creating share value is that, in creating shared value is essential to company’s profitability and competitive position, whereas in a CSR program the program tends to only enhance companies’ reputation.  A CSR Program are more similar to philanthropy activities. Philanthropy activities are mostly the act of “giving away”. For example, in the agricultural sector, What If ITC would have just provided local framers with the E-Choupal with no further involvement? Potentially they risk not yielding the same results. But by actively engaging with the framers by providing training and a having physical location to assist them, they were able to empower the farmer which resulted in better product and places ITC in a better competitive position. Another difference is that if a company is utilizing the share value concept they will create product and services based upon existing social needs rather than creating consumer demand.  

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