shared_value

shared_value
Name	Shared value
Introduced	2011
Main proponents	Michael E. Porter; Mark R. Kramer
Related	Corporate social responsibility; Creating Shared Value; CSV

shared_value Shared value is a management concept that proposes companies generate economic value by addressing social problems. Advocates argue linking corporate strategy to social priorities fosters competitiveness while benefiting societies, and proponents include scholars and institutions influential in business practice and public policy. The idea has influenced debates among multinational corporations, philanthropy leaders, and international organizations about corporate purpose and sustainable development.

Definition and Concepts

Shared value refers to corporate strategies that create measurable business benefits while simultaneously producing social outcomes. Originators framed it as distinct from Corporate social responsibility and philanthropy, positioning it alongside concepts advanced by figures at Harvard Business School and think tanks associated with Michael E. Porter and Mark R. Kramer. Key conceptual elements include reconceiving products and markets through lenses used by firms such as Nestlé and Unilever, redefining value chains in the manner of Walmart and McKinsey & Company consulting casework, and enabling local cluster development akin to initiatives led by World Economic Forum platforms. The model intersects with policy debates involving institutions like the World Bank, International Monetary Fund, and United Nations Global Compact.

History and Origins

The phrase entered mainstream business discourse after a 2011 article in a prominent Harvard Business Review authored by two scholars from Harvard Business School. Its intellectual lineage draws on earlier management scholarship from Peter Drucker and strategy research from Michael Porter's work on competitive advantage and clusters. Corporate pilots and foundation-funded experiments by groups such as the Bill & Melinda Gates Foundation, Rockefeller Foundation, and corporate programs at IBM and Coca-Cola informed practical applications. Conferences at organizations like Skoll Foundation gatherings and sessions at World Economic Forum annual meetings accelerated diffusion into boardrooms and policy fora during the 2010s.

Business Strategies and Models

Practitioners translate shared value into three archetypal strategies: reconceiving products to meet underserved populations as exemplified by Procter & Gamble product lines; redefining productivity in the value chain as pursued by GE and Toyota; and enabling cluster development through supplier training and local infrastructure initiatives similar to efforts by Intel and Siemens. Implementation often involves cross-functional programs coordinated between corporate strategy teams, corporate foundation units modeled after Ford Foundation initiatives, and partnerships with multilateral donors such as USAID and European Commission instruments. Venture capital firms and social enterprises, including accelerators like Y Combinator and impact investors linked to Rockefeller Capital Management, have adapted shared-value framing to growth models seeking blended returns.

Measurement and Evaluation

Measuring shared value requires metrics that capture both financial returns and social outcomes, leading to hybrid frameworks drawing on standards from Global Reporting Initiative, Sustainability Accounting Standards Board, and impact measurement methods used by Acumen Fund and Bridges Fund Management. Tools include social return on investment models developed in consultancies like Deloitte and KPMG, alongside randomized evaluations promoted by researchers at Abdul Latif Jameel Poverty Action Lab and impact assessments used by OECD programs. Corporate reporting often integrates shared-value indicators into disclosures favored by investors such as BlackRock and Vanguard Group, while methodological debates engage academics at institutions including MIT, Stanford Graduate School of Business, and London School of Economics.

Criticism and Controversies

Critics argue shared value can mask traditional profit-seeking under the guise of social purpose and question its distinctiveness from earlier corporate responsibility models championed by John Elkington and Milton Friedman debates about shareholder primacy. Scholars from Oxford University and activists associated with Amnesty International and Oxfam have challenged corporate claims, citing examples where benefits were uneven or where programs served reputational ends. Debates have unfolded in journals and conferences hosted by Academy of Management and Society for Business Ethics participants, and regulatory scrutiny has involved agencies like the Securities and Exchange Commission and competition authorities in the European Union.

Case Studies and Examples

Prominent corporate examples cited in literature include nutrition and rural development programs by Nestlé in emerging markets, smallholder sourcing initiatives by Unilever and Danone, and health-access collaborations involving Johnson & Johnson and global health partners such as Gavi, the Vaccine Alliance. Retail and logistics improvements by Walmart and energy-efficiency projects by Shell and BP have been presented as shared-value implementations. Public–private collaborations involving World Health Organization campaigns, microfinance pilots linked to Grameen Bank models, and infrastructure partnerships with national development banks like KfW illustrate cross-sector applications. Academic case studies from Harvard Business School and INSEAD document both successes and limits, while investigative reporting in outlets associated with The Economist and Financial Times has scrutinized outcomes.

Category:Business management