Chapter 16: Creating Shared Value

- businesses have played a significant role in prosperity in countries

- over line positive GDP -> businesses increase GDP → increase wealth for the population

- provide important product and services populations need

- contribute to increasing health conditions → example: rate how fast vaccines can go on the

   market (Covid19)

—> businesses can be a force for good

• Companies are increasingly perceived to be prospering at the expense of the broader community

• Business increasingly seen as a major cause of social, environmental, and economic problems

• Government and civil society often attempt to solve societal issues at the expense of business

 —> Despite the growing Corporate Social Responsibility activities, the legitimacy of Business has been falling

Societal issues: businesses leaving out societal concerns, focused on short-term gains

Convetional needs: businesses still keep providing for the same kind of population → that has money to buy it instead of the rest that needs it

Value chain productivity: rather than looking how you might look at the value chain from a competitive perspective

- from the perspective of traditional view on strategy

- propose: companies should consider a new type of requirement → society need

   by considering additional factor companies would go for innovation, would see CSR not as

   a side activity but as integrated in their strategy

- How do they suggest companies should think about it -> Creating Value is a 3 step process

- creating new markets spurs business growth

- social entrepreneurs: definition raussuchen

  -> do not have businesses to tackle issues but other institutions supported by businesses

- shared value: good for society and good for business

Example Vodafone → M-pesa: how companies can think about new markets and at the same time help people in those markets

·   paying without having a bank accounts

·   do not have to carry money (safer, easier)

·   Vodafone provided the device

Novonordics → diabetes medicaments to tackle obicidety problems

Isead alumni: Invent a light that was easy to charge and consumed very little to substitute carosin → costly, healthy issues, fire danger —> cycling to charge batteries provide light to off-grid population → can study at night and healthier and profitable for business

optimizing the value chain.

-> number of trucks on the road reduced, gas usage reduced,… and saved billions of dollars

-> package reduction: came up with specific goals - contributes to society and saves them money

- Coca Cola partnering wit WWF to reduce water consumption → coming up with idea juts by partnering with a new partner

 -Ikea case: recycled wood → beneficial for society and business

Nespresso (Nestle) example: developing clusters of coffee farms

• Regenerative agriculture for coffee production

• with the program farmers are more productive → they can make it cheaper because they

• are faster and you can increase prices because it is sustainable

• 3 goals: be more productive (cost-efficient), get higher quality coffee, sustainability

Another example: YARA

costumers → people in Africa —> relied the problem that some farmers have no chance of bringing their crop to markets → YARA with the help of the Norwegian government helped to build infrastructure

• Clear purpose: define the objective, mission, and values

• Corporate engagement: involve different departments of the company

• Collaborative co-creation: develop innovative ideas with stakeholders

• Communication to stakeholders: get the competitive advantage

corporate engagement: CSR are not a side activity, it is strategic → choose wisely, because some areas are better to help 

collaboration: do engage with stakeholders, because it is easier to understand what benefits them bit they are also a good resource of creativity

 communication: if you do something good communicated it, because they have a multiplying effect

• Opportunity to transform thinking and practice on the role of corporations in society

• Far broader approaches to economic value creation

• Next wave of innovation, productivity enhancement, and economic growth

• Businesses acting as businesses, not as charitable givers: most powerful force for addressing pressing societal issues

 —> Regaining legitimacy of business

—> very narrow view of CSR and CSV

CSR about doing good

1. Punkt rechts CSV: you have to consider benefits

2. Punkt rechts CSV:creating value for both sides not just being good citizen

3. Punkt rechts CSV: a way to get competitive edge

4. Punkt rechts CSV: consider resources of whole company

- CSR is a much broader concept then what Porter and Kremer are trying to show in their Article 

Nike Case: regulations not in the US but in other countries

Why is it good to have this clear structure concept (CSV)?  clear structure easier for companies to follow

• goes further than CSV

• business trying to create new value for society without self-interest perspective (of course sth. like building better reputation - Galp), but no immediate self-interest

  —> Ikea Micro-Hub

last step of Ikea to collect old wood was a big problem (problem in the last mile) —> invest in carton plein and partnering with them → nochmal googeln was genau das ist