“The prevailing approaches to CSR are so disconnected from business as to obscure many of the greatest opportunities for companies to benefit society” says Porter, a globally renowned business strategist.
The role of corporate social responsibility (CSR) in business has obtained some traction in recent years (a lot of traction in fact!), but still in most cases it asserts itself through only a list of charitable deeds and philanthropic pittances placed in a dazzling report. For some companies, corporate social responsibility is a cost and a constraint, culminating in a cunning, cosmetic PR campaign. But it doesn’t have to be so. – To ensure the longevity of your enterprise, it can’t be so! Being socially responsible should give your organization a competitive advantage and it should lead to opportunity and innovation.
A CSR strategy starts with a simple (and obvious) belief; business needs a healthy society, and society needs healthy business. This belief is the foundational element of the shared value concept that Michael Porter and Mark Kramer espouse. “The mutual dependence of corporations and society implies that both business decisions and social policies must follow the principles of shared value. That is, choices must benefit both sides.” (Porter et al., 2006) These Lords of Strategy warn that if an organization or society pursue selfish interests that only benefit one side, they’re heading down a dangerous path. “A temporary gain to one will undermine the long-term prosperity of both.” (Porter et al., 2006) Any business that operates at the expense of society will experience only fleeting success; it’s just not sustainable.
So how do you find opportunities for shared value? First, begin with a sustainability strategy rooted in the notion of social integration. Start by considering all the points of intersection between the organization and society, both positive and negative. Look at your value chain. Porter et al. (2006) suggest you look ‘inside out’; map the social impact of the activities your company engages in during the course of business. Then look ‘outside in’ and consider all the social dimensions that can affect the company’s competitiveness.
The ‘inside out’ and ‘outside in’ discovery will detect those areas with the greatest strategic value; the areas that impact the companies competitiveness and for which organizational resources and capability is present to leverage. “When a well-run business applies its vast resources, expertise, and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organization.” (Porter et al., 2006) Likewise, when a business discovers opportunities for shared value with society, it enhances its pursuit of innovation, increases productivity in its value chain and overcomes social constraints to competitiveness.
Reference: Porter, Michael, and Kramer, Mark. 2006. Strategy and Society – The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review. December Edition, Pg. 78-92.
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