By: Shared Value | Administrator at SVI | April 16th, 2013

For those of us who embrace shared value as a powerful and emerging business practice, do we cast corporate social responsibility (CSR) aside? It may be tempting, but traditional CSR can also be viewed as fertile testing ground – much like an R&D lab – for the development of shared value.

As Aakhus & Bzdak point out in their review, several of the examples held up as shared value conquests originated from CSR activities. The authors cite the rise of the Cisco Networking Academy from a simple charitable act and claim there was a “fortuitous” fit between shared value principles and Nestle’s milk district strategy in India – which was motivated by reputation management.

These are valid concerns that need to be examined and explained.

CSR encompasses a lot of things, ranging from quasi-philanthropic activities through to complex, strategic partnerships between business and society. In fact, the CSR net is so wide that we can think of shared value as a subset – or specific application – of CSR.

The language of this debate also lends itself to confusion. Personally, I use the label “traditional CSR” for community engagement activities that are driven more by reactive concerns about community impact, which may include compliance issues or a need to “do enough” so as to preserve a licence to operate. Apart from risk management value, these type of activities are rarely drivers of business profitability.

And then there are CSR strategies that do seek to proactively create economic and social value, which we now call shared value. Porter & Kramer haven’t invented this practice, but they have made a significant contribution in championing, defining and branding it in the marketplace.

What does it all mean?

We can conclude that there is increased awareness in the distinction between traditional CSR and it’s sexier form that we call shared value. It also should be noted that the term “strategic CSR” is used to describe CSR activities that are integrated with core business objectives and draw on the core competencies of the firm – which sounds a lot like shared value.

Traditional CSR will continue to exist and act as a launching pad – or R&D lab – for sporadic shared value strategies, however, in the future, shared value is more likely to happen by design rather than chance. And that’s where it gets really exciting, helping businesses and community-based organisations make it happen.

I invite you to leave a comment as I’d like to hear your views.