{"id":6588,"date":"2021-09-29T11:30:00","date_gmt":"2021-09-29T09:30:00","guid":{"rendered":"https:\/\/svaerm.com\/projects\/shared-value\/"},"modified":"2023-07-21T13:40:33","modified_gmt":"2023-07-21T11:40:33","slug":"shared-value","status":"publish","type":"post","link":"https:\/\/svaerm.com\/en\/blog\/shared-value\/","title":{"rendered":"What does Creating Shared Value (CSV) mean?"},"content":{"rendered":"\n

Porter and Kramer\u2019s concept of Shared Value is a new answer to the question of how companies should address the issue of social responsibility. Instead of acting as charitable donors, companies are seen as more authentic when they find synergies that are of social and economic benefit.<\/strong><\/p>\n\n\n\n

Michael E. Porter and Mark R. Kramer published an article in the Harvard Business Review already in 2006 entitled \u201cCreating Shared Value\u201d. In it, they outline the interdependence of companies and their social and ecological environment.<\/p>\n\n\n\n

Companies should identify and use these interdependencies to generate \u201cshared value\u201d for themselves and society. Seen from the right perspective, the pursuit of profit and social responsibility need not represent a conflict of goals \u2013 they can be compatible.<\/p>\n\n\n\n

Methodology<\/h2>\n\n\n\n

Companies can identify opportunities to generate shared value in three different ways:<\/p>\n\n\n\n

  1. Rethinking products and markets<\/li>
  2. Restructuring the value chain<\/li>
  3. Developing local clusters<\/li><\/ol>\n\n\n\n

    Real-life examples of Shared Value, however, cannot normally be clearly assigned to just one of the three types \u2013 which is why the distinction should not be overemphasized in the practical application of the concept.<\/p>\n\n\n\n

    Shared Value: practical examples<\/h2>\n\n\n\n

    The specialist chemical company Kuraray develops polymers that can be processed without residues. Material left over after the production process can be melted down and reused. This avoids waste and customers are willing to pay a premium for good processability.<\/p>\n\n\n\n

    On regular \u201cHealth Days\u201d, Schenck Process offers employees fresh fruit and a free preventive medical check-up by the company doctor. Absences due to illness are reduced and productivity increases.<\/p>\n\n\n\n

    The Provadis School of International Management together with the FOM University of Applied Sciences and svaerm offer dual study programs. The social value is that participants are able to finance their studies while also gaining relevant practical experience in the online marketing industry. The economic value is that svaerm can thereby train and recruit competent professionals.<\/p>\n\n\n\n

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    Let’s generate Shared Value together!<\/h3>\n\n\n\n

    svaerm is a full service agency<\/strong><\/a>. As an agency partner for corporations and SMEs, we create highly customized communication campaigns, CSR projects, and sustainable WordPress websites with a low carbon footprint. Let’s get in touch!<\/strong><\/a><\/p>\n<\/div><\/div>\n\n\n\n

    Counterexample<\/h2>\n\n\n\n
    \"Forest
    Forest elephant drinking water from a source of water. Central African Republic. Republic of Congo. Dzanga-Sangha Special Reserve. An excellent illustration.<\/figcaption><\/figure>\n\n\n\n

    In its Rainforest Project<\/a>, Krombacher promises to protect a square meter of forest in Dzanga Sangha for every case of beer sold. In doing so, the company is neither saving on costs nor increasing its productivity. It is engaged in the protection of the rainforest in order to improve its image.<\/p>\n\n\n\n

    Difference between CSV and a classic CSR campaign<\/h2>\n\n\n\n

    Creating Shared Value (CSV) and Corporate Social Responsibility (CSR) are not one and the same thing. Shared Value is when a company increases its productivity, and at the same time society or the environment benefit. In a CSR campaign, an increase in the company\u2019s productivity is not a fixed core component \u2013 but it can be a by-product.<\/p>\n\n\n\n

    To sum up, all CSV measures are also CSR measures, but not all CSR measures are necessarily CSV measures.<\/p>\n\n\n\n

    \"Eine
    CSV \u2286 CSR<\/figcaption><\/figure>\n\n\n\n
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    Good to know<\/h3>\n\n\n\n

    Shared Value is shared in 2 directions, (1) the society \/ the environment and (2) the company.<\/p>\n<\/div><\/div>\n\n\n\n

    Why is Shared Value a popular concept?<\/h2>\n\n\n\n

    There are various explanations for the popularity of the concept. For one thing, the authors are highly regarded in the academic world; for example, Porters frameworks<\/a> are part of the syllabus in many business schools. In addition, big-name companies such as Nestl\u00e9<\/a> act as multipliers, applying the concept and reporting on it publicly.<\/p>\n\n\n\n

    The concept itself has proved to be an emotive issue. In an age of greenwashing<\/strong> and whitewashing<\/strong>, traditional CSR campaigns are under general suspicion of being inauthentic and motivated by self-interest. Shared value is one possible answer for the desire for credible and future-proof approaches to CSR. However, neither CSR, nor CSV can make companies rise above all all criticism \u2013 more about this later.<\/p>\n\n\n\n

    Moreover, Porter and Kramer have sounded a very emotionalizing note in their HBR article. The concept is presented as \u201creinventing capitalism\u201d. Memorable quotes such as \u201c[t]he capitalist system is under siege\u201d make it hard to put the article aside without reading it. It is the academic equivalent of clickbait<\/strong>.<\/p>\n\n\n\n

    Finally, the concept has gained extra attention because of the criticism.<\/p>\n\n\n\n

    Criticism<\/h2>\n\n\n\n

    \u201cAll companies create Shared Value. That\u2019s what makes CSV an empty concept for the most part. The entire point of a corporate entity is to create value that could not have been created otherwise. [\u2026] The hard problem ethically, of course, is not creating value \u2013 it\u2019s in how the value is shared. Who gets what?\u201d
    \u2013     Chris McDonald<\/a>, co-author of the Concise Encyclopedia of Business Ethics<\/p>\n\n\n\n

    The Economist<\/a> writes that the concept of shared value is undercooked and not backed up sufficiently by empirical data.<\/p>\n\n\n\n

    \"\"
    Aristotle statue located at Stageira of Greece (birthplace of the philosopher)<\/figcaption><\/figure>\n\n\n\n

    In her commentary on CSV in the INSM blog \u201cUnderstanding Economics\u201d, Professor Ulrike Reisach traces the idea of Shared Value back to Aristotle who established a distinction between \u201ceconomics\u201d and \u201cchremastics\u201d. \u201cNatural\u201d economics (the art of housekeeping) is about meeting needs. In Aristotle\u2019s view, this sort of economic activity was linked to the notion of the common good. Chremastistics (the art of earning money), on the other hand, is unnatural; it focuses on the accumulation of wealth without regard for the common good. This contrast implies that there must be an economic shared value. This is therefore not a new idea.<\/p>\n\n\n\n

    Using the counterexample<\/a> of Krombacher, one might ask: If all companies concentrated on CSV, who would step in to protect the rainforest?<\/p>\n\n\n\n

    Author\u2019s comment<\/h2>\n\n\n\n

    Even if the originality of the idea is disputed: Porter and Kramer have drawn attention to an important topic with their HBR article and have ensured that the concept of Shared Value has entered into current practice \u2013 as it has on the blog and in the client projects<\/a> of the svaerm online marketing agency.<\/p>\n\n\n\n

    In the age of social media and NGOs, there are communities that are highly critical of CSR campaigns. If there is an economic rationale for CSR activities in terms of CSV, this can make them more credible. However, communication and implementation also matter \u2013 as the example of Nestl\u00e9 shows (summarized in this article<\/a> by the German magazine \u201chandelsblatt\u201c).<\/p>\n\n\n\n

    CSV is not limited to large international corporations. The idea \u201cthink globally \u2013 act locally\u201c starts at the individual person and includes companies of all sizes. Businesses that start early with CSV accumulate Shared Value for themselves and society throughout a long time period and grow sustainably as well as synergistically.<\/p>\n\n\n\n

    Does your company need Shared Value or Corporate Social Responsibility to strengthen its position or achieve strategic marketing goals? We would be delighted to offer our complete consulting and communication services to ensure that your measures achieve maximum impact. Simply get in touch with us using the contact form below or drop us an email.<\/p>\n\n\n\n

    Contact for business<\/h2>\n\n\n\n

    After receiving an initial written inquiry, we are happy to consult you via phone, video conference, or an in-person meeting.<\/p>\n\n\n

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