Creating Shared Value

1) Drawbacks of Capitalism

Capitalism, now a days is seen as a system working against broader community, just because the
companies are stuck in decade old concept of value creation, broadly perceived as corporate social
responsibility, where they fail to incorporate business and society in win-win model.

2) Addressing the Drawbacks of Capitalism

Comparatively, concept of shared value is based on firms economic growth as well as addressing the
societal needs thus causing community level growth and prosperity. Thus, it is better than corporate social
responsibly since it focus on economic growth by societal growth on parallel lines.

3) Implementing Shared Value Goal

Shared value goal can be achieved by 1) redesigning products & markets, which meet societal needs not
creating artificial need. 2) Incorporating environmental & societal benefits in firms value chain. 3) Help
develop all related businesses i.e. clusters, causing productivity more sustainable.

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How Great Companies Think Differently
1) The Need of Institutional Logic

As opposed to traditional goal of maximizing profits as sole target for companies, great companies pursue
the concept of institutional logic. This aims at aligning business interests with society, value human and
society interests in decision making thus building enduring & sustainable instructions.

2) What Encompasses Institutional Logic

It encompasses, taking firm as a social institution, a) by implementing institutional grounding that will
ultimately reflect in value and purpose of the firm, b) pursing endurance by investing on humans, c) value
statements should be articulated to stimulate motivation, regulation & devotion.

3) Implementation

Institutional logic means, pursuing public- private partnerships in a manner that works in society interest
rather business, allocating resources across borders to serve community with no short term profits express
values, trusting employees in relations leads to innovation by self-organizing.

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Moving to next generation Corporate Citizenship
1) Changes in Business Environment

Nowadays businesses have integrated more than ever, rising competition and out-reach come at social
& environmental costs, loss of trust in executives and holding them responsible for social inequalities.
Several NGOs and pressure groups have emerged to keep check on companies.

2) Next Generation Firms Response to New Dynamics

Next generation firms connect business to society by looking outside-in to identify issues affecting
society & firm alike by getting more responsive to problem, identifying risk & opportunities to firm
and society, partnering with NGOs, being more transparent and communicating with public.

3) Responding Inside-out to a Problem Identified

Companys relationship with society is dependent on its stage of development of citizenship. It also
involves addressing world social problems while being sustainable. Firms in integrative phase base
citizenship on core values. Leadership is key in transforming a firm in to next generation citizenship.

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Role of Corporation in Society
1) Shift in Corporations Role & Responsibility

Over few decades, firms have integrated financial goals with social and environmental issues, mainly
because of concentration of growth and power in hands of few large corporations. This has led to
separation of control and ownership while objectification of public interest.

2) Dynamics of Corporations Role in Societal Domain

The shift in corporations role in society betterment is not fixed in terms of goals and domain; rather it
continues to evolve as per time in social, economic and political forms. Level of influence is directly
linked to the size of organization, i.e. larger firm have bigger roles to play in society.

3) Sustainability & Mangers Role

Firms sustainability is now defined in terms of environmental, social and governance criteria or (ESG).
Mangers are more proactive than ever before in social & environmental issues of society. However
several areas in this field need to be explored like social reporting & investor roles in society betterment.