Following the HBR article “Creating Shared Value” by Michael Porter and Mark Kramer published in January 2011 the author witnessed an online debate on the subject suggesting that CSV was hardly any more than a strategic move to support FSG, the consultancy run by Michael Porter and Mark Kramer. It was suggested that Porter and Kramer offered nothing new, but gave CSR a new name. But there were also voices claiming that it would be great if CSV was reality. So, there seemed to be something about CSV that some people got and others denied. What was it? In this dissertation the ideas laid down in CSV are evaluated and appraised against related concepts of corporate social responsibility. Special focus lies on the aspects Porter and Kramer used to separate CSV from CSR: justification, value, and concepts for practical application.
The main part of the study consists of a literature review on related topics. It is laid down that basic ideas of CSV have already been introduced in CSR, e.g. with corporate citizenship, sustainability, doing business at the bottom of the pyramid, or community relations. Philosophical considerations on corporate responsibility and political correlations give reason to regard CSV a competitive tool rather than an alternative approach to CSR. The concept is critically appraised from a societal perspective showing that CSV can be applied to benefit all, but does not lead to shared value in itself.
In the second part of the dissertation an explorative study is conducted among energy suppliers and suppliers of outdoor equipment operating in the German market to find out whether Porter and Kramer’s distinction between responsive and strategic CSR can be supported and whether CSV might deliver new options for the companies. The study shows that companies are to a far degree concerned with responsive CSR and gives reason to embrace the idea that it depends on the corporation’s product and business model whether the trend on CSR can be used strategically or has to be applied in a responsive manner.
The author introduces a management model, putting into relation the concepts of CSR and CSV. Plainly spoken, CSR is considered the justification and underlying assumption, while CSV is a management approach that can be applied to address corporate social responsibility.
Table of Contents
I. Introduction
A. How the topic was identified
B. The online debate
C. What’s wrong with CSR?
D. Research questions and objectives
II. Theoretical and methodological classification
A. Research approach
a. Theoretical framework
b. Methodology
i. Flexible research design
ii. Integrative literature study
B. Consideration of rejected alternatives
III. Creating Shared Value in the context of CSR theory
A. Definition of CSV and CSR
a. Corporate Social Responsibility
i. CSR in Germany
b. Creating Shared Value
B. Justification of CSR
a. Corporate Citizenship
b. Philanthropy
c. Sustainability
C. Responsibility and power
a. Defining responsibility
b. Responsibility and political power
D. CSV
E. The value of doing good
a. Ethical theory
i. Consequentialist theory
ii. Non-consequentialist theory
iii. Separating right from wrong
F. Is CSV current CSR standard?
a. Products and markets
b. Productivity in the value chain
c. Building supportive industry clusters at the company’s location
IV. Explorative Study
A. Research questions
B. Mixed methods approach
a. Sample size and choice of field
b. Content analysis
c. Interviews
C. Rejection of alternative methods
V. Finding
A. Website content
B. Interviews
C. Unintended findings
VI. Discussion
A. CSV in the context of CSR theory
a. Politics
i. Nestlé: the business example
b. Porter and Kramer vs. Friedman
c. Reinventing capitalism?
B. CSR in Germany with the example of two industries: energy supply and outdoor supply
a. Reputation management
b. Identifying relevant topics
c. Products and markets
d. The value chain
VII. Classifying CSV
A. What is the contribution of CSV to CSR theory?
B. A management model for socially responsible business
C. Limitations of research
D. Areas for further research
VIII. Reflections on learning
A. Becoming a scholar
B. Learning
C. Application of learning
Objectives and Research Themes
This dissertation aims to critically evaluate Michael Porter and Mark Kramer's concept of "Creating Shared Value" (CSV) against existing theories of Corporate Social Responsibility (CSR). The research seeks to determine whether CSV offers a genuinely new management approach or merely rebrands established CSR practices, and investigates how the distinction between responsive and strategic CSR can be supported in a corporate context.
- Theoretical evaluation of the CSV concept compared to traditional CSR models.
- Explorative study of CSR practices in the German energy and outdoor equipment industries.
- Analysis of the relationship between corporate responsibility, political power, and profitability.
- Development of a new management model relating CSR and CSV to societal requirements.
Excerpt from the Book
A. How the topic was identified
Shortly after the release of Michael Porter’s and Mark Kramer’s article Creating Shared Value. How to reinvent capitalism – and unleash a wave of innovation and growth (Porter and Kramer, 2011) in the January/February issue of Harvard Business Review the author read a web post claiming that Porter and Kramer were “obviously not up to date with current CSR development” (Wagner, 2011). It was further suggested they were trying to work on their own consultancy’s reputation by giving a current trend a new name (ibid.). The post provided links to the original article and to Tony Webb’s blog (Webb, 2011), a quite popular online source for those interested in business ethics. After skimming through the texts, the author felt inclined to agree with Porter and Kramer about the problems of Corporate Social Responsibility (CSR) in practice, and she also noticed that the criticism seemed to mainly follow a ‘why do they criticize our work?’-approach.
The question arose whether the CSR professionals were right with their criticism of Creating Shared Value (CSV) or whether CSV really delivered a new approach to responsible management. Having always felt that CSR was mainly a tool used in a business environment that did not believe in social responsibility but wanted to answer stakeholder expectations, the author now wanted to be sure about current trends in CSR. Was there something happening in practice, that academic debate had not yet addressed? Did she just not know about those trends? Were the professionals blind for the weakness of CSR application? Or was it possible that Porter and Kramer had identified exactly the reason why CSR did not work, at least for those who thought it would not work?
Summary of Chapters
I. Introduction: Presents the debate surrounding CSV, outlines the research objectives, and defines the scope of the study.
II. Theoretical and methodological classification: Details the research methodology, including the use of critical rationalism and an integrative literature review.
III. Creating Shared Value in the context of CSR theory: Evaluates definitions of CSV and CSR, discusses justifications like philanthropy and sustainability, and addresses the connection between responsibility and power.
IV. Explorative Study: Describes the empirical research design involving content analysis of corporate websites and qualitative interviews with industry representatives.
V. Finding: Presents the results of the industry analysis, showing how energy and outdoor companies handle CSR communication and strategy.
VI. Discussion: Critically discusses the findings, exploring the practical application of CSV and comparing corporate approaches in the German market.
VII. Classifying CSV: Offers a synthesis of the research, introducing a proposed management model for socially responsible business.
VIII. Reflections on learning: Reflects on the author's personal development and academic journey during the completion of the MBA dissertation.
Keywords
Creating Shared Value, CSV, Corporate Social Responsibility, CSR, Strategic Management, Sustainability, Corporate Citizenship, Philanthropy, Competitive Advantage, Stakeholder Engagement, Business Ethics, Profit Maximization, Management Model, Social Responsibility, Industrial Analysis.
Frequently Asked Questions
What is the core subject of this dissertation?
The dissertation examines the contribution of Michael Porter and Mark Kramer's "Creating Shared Value" (CSV) concept to the existing theoretical framework of Corporate Social Responsibility (CSR).
What are the primary themes addressed?
Central themes include the evaluation of CSV versus CSR, the business case for social responsibility, the intersection of business and society, and the role of corporate strategy in addressing societal needs.
What is the main research objective?
The primary goal is to determine if CSV is a novel management paradigm or merely a strategic refinement of existing CSR practices, and to assess how managers can effectively balance social and competitive objectives.
Which scientific methods are employed?
The study utilizes a mixed-methods approach, combining an extensive integrative literature review with a qualitative explorative study that includes website content analysis and expert interviews.
What topics does the main body cover?
The analysis covers the theoretical origins of CSR, ethical models, the role of corporate power in political contexts, and a comparative study of the German energy and outdoor sectors.
What characterizes this work?
The work is characterized by a critical, management-oriented perspective that questions the effectiveness of traditional CSR and explores the practical integration of societal concerns into core business operations.
How does the author define the relationship between power and responsibility?
The author argues that responsibility is intrinsically linked to power, suggesting that in modern society, corporations must be held accountable for their significant political and social influence, not just their economic output.
What conclusion does the author reach regarding the "re-invention" of capitalism?
The author concludes that while CSV is a creative application of existing management principles, it does not fundamentally "reinvent" capitalism, but rather provides a more direct framework for aligning profit with societal interests.
- Quote paper
- Natalie Junge (Author), 2011, The Contribution of Porter and Kramer's Concept of Creating Shared Value to CSR Theory, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/183594
