New language, with other tweaks of the idea emerging from the 80’s and 90’s when venture capitalists got involved in philanthropy on a large scale—think the Bill & Melinda Gates Foundation—and called it venture philanthropy.
This article from Harvard Business Review reports.
An excerpt.
“Michael Porter and Mark Kramer, writing in HBR (December, 2006 and January-February, 2011), advance the idea of creating shared value by developing strategies and policies that enhance the competitiveness of the company while advancing social and economic conditions of the community.
“An alternative that has similar objectives but may be easier to implement and justify is leveraged social programs — programs that leverage a firm's assets and skills and have a direct effect on brands and customer relationships.
“Shared value can be achieved by offerings that address social needs as GE has done with economagination, by sustainability programs such as those of Walmart, or by enhancing rural development and water conservation for communities where there are local operations as Nestle has done.
“Shared value suggests that profits that are imbued with a social purpose can enable companies to grow while advancing society. It frames the enterprise mission and objectives in a new way. All profits are not equal. Those that advance society are better and those that detract from society are inferior. In my view the concept of shared value and its label advance the practice of management by broadening objectives and can potentially change the relative perception of business and its role in creating social good.
“However, I also see some practical implementation issues. First, although at a high level of abstraction it works, it is not clear how many decisions would be affected by the shared value concept. If a sustainability program will reduce costs or a local community program will increase productivity, a shared value justification will not be needed. If a societal beneficial product line will have customer support, it can be justified, as it was at GE, without a shared value rationale.”
About
- David H. Lukenbill
- I am a California native, married, we have one daughter and live close to the American River with two cats and all the wild critters we can feed. I am a management consultant to nonprofit organizations and have an Associates of Arts degree in Administration of Justice from Sacramento City College, a Bachelor of Science degree in Organizational Behavior from the University of San Francisco and a Master of Public Administration degree, also from the University of San Francisco.