The Effect of Globalization on Shared Value

It is hard to say at which scale we are creating shared value. Porter mentions how traditional company strategies look to the immediate future which deters them from making investments in what he calls shared value. This is because it takes smaller losses to end up making more gains after investing in the community they are serving. However I am interested in the longer frame than that, in a world where globalization has taken effect will we be able to serve our worldwide customers and create value for all of them the same?

Shared Value sounds like a concept that is pretty universally favorable for both sides, society and the business have a net positive result. However, I wonder if this is actually an approach that will continue to provide benefits to both sides in the future. One of the major things that might affect such a model being as successful as ITC’s is the effect of globalization and the ease at which we will be able to access materials and components from around the world.

In the case study of ITC, and its paperboards business, this was something that already played into the decisions that they made. At the point of changing strategies to invest heavily in forestry in India, the case says “the cost of importing pulp was significantly lower than investing in wood plantations in India.” Although this did not deter the chairman at the time, this is a very interesting statement as it could have been possible to make more profit for the company if it had instead imported supplies and not heavily invested in developing local wasteland. In this case was it the strictly the highest yielding option for the company? I think in this specific situation their investment did pay off and they were able to create shared value because of untapped resources in their community that they were able to use and constituted the customers that they care about. As globalization continues to expand, the target customers for which a company will care about will expand. In this case, there might not be such a specific customer base for which the company will look to benefit, rather it will be on the global scale. In ITC’s situation they had the untapped resources and were able to control the development of the entire ecosystem. In the future as all these resources are spread around the world, there might not be these unorganized groups for which the company can go in and organize they way that is most efficient for their specific need. It will get harder to create shared value as the world becomes smaller and all companies and all customers span a variety of communities.