Shared Value – Theoretical Implications, Practical Challenges

Abstract

Academic and public debate on Michael Porter and Mark Kramer’s concept of “Shared Value Creation” (SVC) as a strategic orientation for business models reflects a fundamental and significant debate in society about reconfiguring the relationship between business and society. (Porter and Kramer, Creating shared value. Harv Business Rev 89(1/2): 62–77, 2011) The demand made by the Secretary General of the UN to ask and answer, as part of this debate, questions to do with “understanding economic performance, and our metrics for gauging it” (United Nations, The road to dignity by 2030: ending poverty, Transforming all lives and protecting the planet. Synthesis report of the secretary-general on the post-2015 Agenda. UN. http://www.un.org/disabilities/documents/reports/SG_Synthesis_Report_Road_to_Dignity_by_2030.pdf. Accessed 13 Jan 2016, 2014: 37) is therefore fundamental. The dominance of “shareholder value creation” as a strategic orientation has been subjected to radical questioning. The times are over when it was sufficient to answer questions about corporate social responsibility with the terse statement “the business of business is business”. This debate is about social-theoretical and philosophical questions, but also about the long-standing discussion in economic theory about the nature of the firm. At the same time, though, practical issues regarding the strategic and operative management of companies are being discussed. This is not only legitimate, but also inevitable, if the CSR debate is to assume a practical and leading role in the business models of firms. The Porter/Kramer concept for a strategy of SVC is relevant here, since it is an essential, and currently the most important, contribution to an economic discussion that is necessary in, not least, a socio-theoretical and philosophical sense.