Porter and kramer creating shared value

What is the core definition of Creating Shared Value (CSV)?

CSV involves creating economic value in a way that simultaneously creates value for society by addressing its needs and challenges.

What problem does Porter and Kramer argue that capitalism currently faces?

Capitalism is under siege because business is perceived to prosper at the expense of society, leading to a loss of public trust.

What is the difference between CSV and CSR?

CSR is about doing good driven by external pressure, while CSV focuses on joint company and community value creation integral to profit maximisation.

What are the three ways companies can create shared value?

1. Reconceiving products and markets. 2. Redefining productivity in the value chain. 3. Enabling local cluster development.

What does 'reconceiving products and markets' mean in practice?

It means identifying societal needs as genuine market opportunities, such as GE's Ecomagination products.

What is the concept of externalities and how does CSV reframe it?

Externalities are social costs not borne by firms; CSV reframes them as internal costs that can be addressed to reduce costs and increase productivity.

Give an example of how redefining value chain productivity creates shared value.

Walmart reduced delivery routes, saving $200 million while cutting carbon emissions.

How does the Nestlé Nespresso example illustrate shared value in procurement?

Nestlé worked with small farmers to improve quality and incomes, benefiting both parties.

What is a 'cluster' and why does it matter for shared value?

A cluster is a geographic concentration of related businesses that drives productivity and innovation.

How does the Yara example illustrate cluster development?

Yara invested in infrastructure to create agricultural growth corridors, benefiting farmers and securing its supply chain.

What is the key distinction between shared value and fair trade?

Fair trade redistributes a fixed pie, while shared value focuses on growing the total pie through efficiency and quality improvements.

Why does Porter and Kramer argue that not all profit is equal?

Profits that create societal benefits are more sustainable than those extracted at society's expense.

What does Porter and Kramer say about the relationship between location and productivity?

The business environment, including cluster quality and local capabilities, profoundly affects productivity and innovation.

How does Unilever's Project Shakti illustrate shared value in distribution?

Unilever empowered female entrepreneurs in rural India, increasing incomes and improving access to hygiene products.

What is the critical limitation of CSV that Porter and Kramer acknowledge?

CSV works best where societal issues are closely connected to the firm's business; distant issues are better addressed by governments.

How does Porter and Kramer argue government regulation should be redesigned to support shared value?

Good regulation sets clear social goals and encourages innovation, while bad regulation blocks it.

How does CSV connect to the module's broader argument about why international business is complex?

CSV provides a rationale for MNEs to embed in local communities, supporting local adaptation and addressing social needs.