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Creating Shared Value Meets Human Rights: A Sense-Making Perspective in Small-Scale Firms

Abstract

How do firms make sense of creating shared value (CSV) projects? In their sense-making processes, do they extend the meaning spectrum to include human rights? What are the dominant cognitive frames through which firms make sense of CSV projects, and are some frames more likely to have transformative power? We pose these questions in the context of small-scale firms in a low-to-middle income country—a context where CSV policies have been promoted extensively over the last decade in the expectation of improved economic competitiveness, growth, and sustainable development processes. We employ a grounded theory approach to identify three dominant cognitive frames used by our respondents to make sense of CSV. The most prevalent frame (growth first) prioritizes economic over social and environmental goals, and considers social, environmental, and human rights benefits to trickle down from economic growth and wealth generation. In the second frame (green-win), economic actors follow a win–win logic according to which environmental sustainability is pursued only if there are clear and foreseeable economic payoffs. The third frame (humanizing the business) is a niche that emphasizes the attainment of certain human rights goals, despite a perceived lack of immediate economic returns. Our work casts doubt on the capacity of CSV projects to stimulate sustainable development processes without radically changing entrepreneurs’ cognitive frames from growth first to humanizing the business.

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Notes

  1. Among the OECD countries, small and medium-sized enterprises account on average for 60% of total employment and generate between 50 and 60% value added, while in developing countries they account for 52% of formal employment (Cusmano et al. 2018).

  2. In assessing a set of CSV projects, Fayet and Vermeulen (2014, p. 302) referred to improvements of environmental practices, among others that “chemical pesticide usage has been stopped (organic projects) or reduced by up to 40–50%”, thereby reducing their harmful impact on the health of local farmers and their families.

  3. Universal human rights are regarded as inalienable, indivisible, interdependent, and interrelated (World Conference on Human Rights, 1993). Politically, in 1948, human rights were entrenched in the Universal Declaration of Human Rights (UDHR), the 30 articles of which cover a wide range of civil-political rights (e.g., the right to life, the right to security, and the right to form and join trade unions), as well as socio-economic (e.g., labor rights relating to working conditions) and cultural (e.g., rights to education) rights.

  4. Industries differ in respect of the sustainability challenges they face. For instance, adopting green technologies may be easier and more financially viable in some industries than in others. Despite this variability, in the context of this research, we did not detect severe challenges that characterized certain industries rather than others, which could affect the direction of interviewee responses and bias our exploratory study in a significant way. Therefore, we do not exploit potential inter-industry differences but, overall, focus on the industry clusters that have been subjected to CSV policy treatment.

  5. We thank an anonymous reviewer for this suggestion.

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Giuliani, E., Tuan, A. & Calvimontes Cano, J. Creating Shared Value Meets Human Rights: A Sense-Making Perspective in Small-Scale Firms. J Bus Ethics 173, 489–505 (2021). https://doi.org/10.1007/s10551-020-04511-7

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Keywords

  • Creating shared value
  • Business and human rights
  • Sense making
  • Small-scale firms
  • Low-to-middle income (developing) countries