corporate social responsibility strategy & society michael porter and mark kramer harvard...
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Corporate Social Responsibility
Strategy & SocietyMichael Porter and Mark Kramer
Harvard Business Review
Many Companies have Already done much1. They put business against society, when
clearly the two are interdependent2. They pressure companies to think of CSR
in generic ways instead of in the way most appropriate to eaach firm´s 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 Proponents for CSR have used four
arguments to maake their case:1. Moral obligation2. Sustainability3. License to operate4. 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 long-
term 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 short-term 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(Porter and Kramer´s Theory) Successful corporations need a healthy
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 company´s value chain touches on the communities in which the form operates, creating either positive or negative social consequences
Competitive Context – Four Areas1. Quantity and quality of bussiness inputs2. The rules and incentives yhat govern the
competition3. The size and sophistication of local
demand4. The local availability of supporting
industries
Choosing Which Social Issues to Address
Creating a Corporate Social Agenda
Responsive CSR Strategic CSR
Corporate InvolvmentA Strategic Approach
Integrating Inside-out and Outside-in Practices Pioneering value chain innovations and
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