Corporate Social

Responsibility
Strategy & Society
Michael Porter and Mark Kramer
Harvard Business Review

Many Companies have Already

done much
1.
2.

They put business against society, when

clearly the two are interdependent
They pressure companies to think of CSR
in generic ways instead of in the way
most appropriate to eaach firms
strategy

Being Hold Accountable for

Social Issues
In fact the most common corporate
response has been neither strategic nor
operational, but
Cosmetic, pibliv relations and media
campaigns
64% of the 250 largest multinational
companies published CSR reports
These reports rarely offer at coherent
framework for CSR activities

Four Pevailing Justifications

for CSR

1.
2.
3.
4.

Proponents for CSR have used four

arguments to maake their case:
Moral obligation
Sustainability
License to operate
reputation

1. Moral Obligation

Balancing competing values, interests and

costs!

Example:
Googles entry to China

2. Sustainability
The notion af sustainability can become so
vague as to be meaningless
Transparency vs. corruption
Philanthropy may contribute to
sustainability of a society
They offer little basis for balancing longterm objectives against the short-term
costa the incur
Trade-offs without offering a framework

3. License-to-operate
A firm that views CSR as away to calm
down pressure groups often finds that this
approach devolves into a series of shortterm defensive reactions
A-never-ending public relations palliative
with minimal value to society and to
stratigic benefit for the business

4. Reputation
In stigmatized industries, such as
chemicals and energy, a compaany may
instead pursue social responsibility
initiatives as a form og insurance
Example:
Body Shop have distinguished themselves
through an extraordinary long-term
commitment to socila responsibility

All Four Schools:

All these four schools of thought share the
same weakness:
They focus on the tension between
business and society rather than on their
interdependence

Integrating Business and

Society

Successful
corporations
need aTheory)
healthy
(Porter
and
Kramers

society
And healthy societies needs successful
companies
Both business decisions and social policies
must follow the principle of shared value

Identifying the Points of

Intersection

Vitually every activety in a companys

value chain touches on the communities in
which the form operates, creating either
positive or negative social consequences

Competitive Context Four

Areas
1.
2.
3.
4.

Quantity and quality of bussiness inputs

The rules and incentives yhat govern the
competition
The size and sophistication of local
demand
The local availability of supporting
industries

Choosing Which Social Issues

to Address

Creating a Corporate Social

Agenda

Responsive CSR
Strategic CSR

Corporate Involvment
A Strategic Approach

Integrating
Inside-out and Outside-in

Pioneering value chain innovations and

Practices

addressing social constraints to com

petitiveness are each powerful tools for
creating economic and social value
When value chain practices and
investments in competitive context are
fully integrated, CSR becomes hard to
distinguish from the day-today business og
the company

Creating a Social Dimension to

the Value Proposition
Not every company can build its entire
value proposition around social issues
But adding a social dimension to the value
proposition offers a new frontier in
competitive positioning

Organizing for CSR

Strategy is always about making choices,
and success in CSR is no different.
It is about choosing which social issues to
focus on

The Moral Purpose of

Business

Perceiving social responsibility as building

shared value rather than as damage
control as a PR campaign will require
dramatically different thinking in business.
We are concinced, that CSR will become
increasingly important to competitive
success