Corporate Social ResponsibilityStrategy & SocietyMichael Porter and Mark KramerHarvard Business Review

Many Companies have Already done muchThey put business against society, when clearly the two are interdependentThey 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 IssuesIn fact the most common corporate response has been neither strategic nor operational, butCosmetic, pibliv relations and media campaigns64% of the 250 largest multinational companies published CSR reportsThese reports rarely offer at coherent framework for CSR activities

Four Pevailing Justifications for CSRProponents for CSR have used four arguments to maake their case:Moral obligationSustainabilityLicense to operatereputation

1. Moral ObligationBalancing competing values, interests and costs!

Example:Googles entry to China

2. SustainabilityThe notion af sustainability can become so vague as to be meaninglessTransparency vs. corruptionPhilanthropy may contribute to sustainability of a societyThey offer little basis for balancing long-term objectives against the short-term costa the incurTrade-offs without offering a framework

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

4. ReputationIn stigmatized industries, such as chemicals and energy, a compaany may instead pursue social responsibility initiatives as a form og insuranceExample: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(Porter and Kramers Theory)Successful corporations need a healthy societyAnd healthy societies needs successful companiesBoth 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 AreasQuantity and quality of bussiness inputsThe rules and incentives yhat govern the competitionThe size and sophistication of local demandThe local availability of supporting industries

Choosing Which Social Issues to Address

Creating a Corporate Social Agenda

Responsive CSRStrategic CSR

Corporate InvolvmentA Strategic Approach

Integrating Inside-out and Outside-in PracticesPioneering value chain innovations and addressing social constraints to com petitiveness are each powerful tools for creating economic and social valueWhen 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 PropositionNot 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 CSRStrategy 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 BusinessPerceiving 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