Creating Shared Value

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Unit 3 Assignment 2

A Summary of M.E. Porter and M. R. Kramer’s article
“Creating Shared Value”

Michael G. Castro

Capella University
MBA6008 – Global Economic Environment
Professor Hidsell
January 27, 2013

Creating shared value (CSV) is a powerful concept that many companies used, ultimately, being used as a strategy in developing the future market while also strengthening economies, the marketplace, communities and corporate funds. In reading this article, I initially thought this was about corporate social responsibility (CSR). I soon became confused, but that soon subsided and I believe I see the difference. In a company, CSR looks to change business operations in a way that maximizes a company’s benefits to society and minimizes the risks and costs to society—all while keeping the company focused on creating business and brand value (Epstein-Reeves, 2011). The following makes the separation of CSR from CSV.

Porter & Kramer begin the article by blaming business, overall, as the major cause of social, environmental and economic problems. They say that the companies are prospering amidst all that is going on around us and it is at our (community’s) expense. The notion of having the business bring together with society is what companies ought to be doing. The authors later say that “shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success (Porter & Kramer, 2011).” For the most part, Porter & Kramer are criticizing the thought process of the trade-off between societal needs and economic success, and the way the concept of ‘externalities’ have shaped corporate and policy strategy.

As Porter & Kramer get to the heart of the article they articulate that CSV will “reshape capitalism and its relationship to society (2011),” they bring forth the concept of the three ways companies can create shared value by: reconceiving product and markets, redefining...
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