beyond csr- smes engagement in csv. degree umu.diva- 844531/fulltext02.pdf beyond csr smes’...

Beyond CSR SMEs’ engagement in creating shared value

Authors: Eriksson, Ebba Szpirglas, Chloé Supervisor: Vanyushyn, Vladimir Student Handelshögskolan i Umeå 2015 Spring term 2015 Degree Project, 30 hp

Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Thank you! First of all, we would like to thank Vladimir Vanyushyn, our supervisor, and Mikael Brändström, Esam’s consultant, for their great support and encouragements during this research and writing process. Thank you for always taking the time to help us. Furthermore, we would like to thank Hanna Lenart for her feedback and guidance, and Phliomène Cantournet for her help. We also would like to thank all our respondents for their contribution to our thesis, their time, and of course, their warm welcoming in their companies. Last but not least, we would like to thank our families and friends for their constant support. Ebba Eriksson & Chloé Szpirglas Umeå, Sweden - 2015/05/11

Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Abstract While climate change and societal issues involve individuals, corporations, and policy makers at a global and local scale; this study highlights the actions that can be taken by small and medium sized enterprises in order to create value for the society and their business. This study focuses on creating shared value (CSV), a concept that goes beyond corporate social responsibility (CSR), and aims to expand the connections between societal and economic progress. This thesis aims to understand how SMEs can engage in CSV on a local scale, with a focus on the community of Northern Sweden. This study was written on commission for Esam consultant. The theoretical framework is structured in two parts. The first one, creating shared value, introduces the different levels of the concept, two alternative business models to engage in it, and the important stakeholders. The second part focuses on SMEs, their characteristics, the business models that apply to them, and the stakeholders involved in their activities. This study’s findings are based on data collected through 10 interviews conducted with SMEs having a focus on societal or environmental concerns, located in Västerbotten. Additionally, to get an overview of the concept and strengthen our findings, we conducted one interview with Mikael Brändström, a consultant from Esam and with an insight in SMEs’ sustainable actions. The analysis combines theories and empirical data to offer new tracks on how SMEs can engage in CSV. The three levels of CSV are analyzed in order to find opportunities for SMEs to engage in concept. Some of the opportunities are: to identify a social issue that can be solved by the product or service; to minimize the negative impact of the value chain on the environment; and to corporate with actors within the local community. To conclude, this study highlights both theoretical and practical implications linked to the concept of creating shared value, and brings ideas on how SMEs can engage in the concept of CSV. The findings are used in a handbook aiming to provide companies with a practical guidance to engage in the concept. Moreover, through the interviews and research, we can say that by having a business idea connected to a social or environmental issue, SMEs start create shared value and are most likely to have a positive impact. The conclusion gives an optimistic perception of the extent to which many companies already are interested in being responsible and sustainable. Keywords: creating shared value, small and medium sized enterprises, business model, stakeholder, corporate social responsibility, multinational corporations, social and environmental issues, sustainability

Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Abbreviations BOP CSR CSV GDP MNC NGO SEK SME SV USD

Bottom of the Pyramid Corporate Social Responsibility Creating Shared Value Gross domestic product Multinational Corporation Non-Governmental Organization Swedish currency Small and Medium Sized Enterprise Shared Value United-States Dollar

Creating Shared Value Ebba Eriksson Degree Project, 30 ECTS, Spring 2015 Chloé Szpirglas

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Table of Contents 1.   Introduction  ...........................................................................................................................  1  

1.1  Businesses  involvement  in  environmental  and  social  problems  .........................................  1  

1.2  Preface  ................................................................................................................................  1  

1.3  Research  gap  .......................................................................................................................  4  

1.4  Research  question  and  purpose  ..........................................................................................  4  

1.5  Choice  of  subject  .................................................................................................................  5  

1.6  Delimitations  .......................................................................................................................  6  

1.7  Presentation  of  Esam  ..........................................................................................................  6  

1.8  Definitions  ...........................................................................................................................  7  

2.   Scientific  method  ...................................................................................................................  8  

2.1  Preconception  .....................................................................................................................  8  

2.2  Research  Philosophy  ...........................................................................................................  8  

2.3  Research  approach  ..............................................................................................................  9  

2.4  Research  design  ..................................................................................................................  9  

2.5  Literature  review  ...............................................................................................................  10  

3.   Theoretical  framework  ........................................................................................................  12  

3.1  Creating  shared  value  ........................................................................................................  12  

3.1.1  The  concept  of  creating  shared  value  ........................................................................  12  

3.1.2  Business  models  for  creating  shared  value  ................................................................  18  

3.1.3  Stakeholders´  role  to  engage  in  creating  shared  value  ..............................................  20  

3.2  Small  and  medium  sized  enterprises  .................................................................................  21  

3.2.1  The  Characteristics  of  small  and  medium  sized  enterprises  ......................................  21  

3.2.2  Business  models  in  small  and  medium  sized  enterprises  ...........................................  21  

3.2.3  Stakeholders  in  small  and  medium  sized  enterprises  ................................................  22  

4.   Practical  method  ..................................................................................................................  24  

4.1  Sampling  ............................................................................................................................  24  

4.2.  Interview  method  .............................................................................................................  25  

4.3  Development  of  the  research  instrument  ....................................