Abstract
Business seems to have lost its sense of purpose and the relationship between business and society appears to be broken. Relevant parts of society question whether business is creating value for the many or just for a few. At the same time there is an expectation that business contributes to solutions to huge challenges such as poverty or climate change. In such an environment, the concept of Shared Value is catching a lot of attention from academics and business practitioners because it appears to offer an appealing narrative about how business can develop innovative solutions to societal challenges that are creating business and societal value simultaneously. According to the authors, this requires a re-definition of the role and the purpose of business in society, a definition that would be fundamentally different compared with the most prominent economic and business theories that in turn claim that business has to maximize profits or respectively has to create value for the shareholders first and foremost. This situation analysis raises some important questions that this article tries to explore: How could it happen in the first place that business is under such scrutiny, given that companies are creating considerable value for societies? And for what reason have economists been at least ambivalent if not even agnostic concerning moral values, ethics and social responsibilities of companies in modern societies for so many years? And what alternative concepts – in regards to the role and responsibilities of business as possible tools to address societal challenges – were offered in former times and can be seen as foundations for the Shared Value concept? The article makes a rather explorative attempt to offer some perspectives to these questions and specifically to how companies could respond to these expectations. We propose that companies should operate with a strategic portfolio approach, i.e. using a portfolio of interventions – of which Shared Value is one – with the aim to optimize the positive impact on society and minimize the negative footprint. Lastly, the article discusses some of the concerns that were raised against the Shared Value concept, either because these are an inherent element of it or because of how it is positioned within the academic debate on the corporate responsibilities of companies.
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Notes
- 1.
- 2.
For such an analysis see the movie “The Corporation” or the website http://thecorporation.com (accessed 30.03.2016).
- 3.
Edelman Trust Barometer 2015 “Trust and Innovation” http://www.edelman.com/insights/intellectual-property/2015-edelman-trust-barometer/ (accessed 30.03.2016).
- 4.
Cf. Hobbes (1982) for the constitution of rights to property through a social contract.
- 5.
For the limits of property rights in the state of nature cf. Locke (1980).
- 6.
Cf. e.g. Wieland et al. (2014) trends and topics around Compliance.
- 7.
- 8.
We will not discuss the concept of disruptive innovation in detail but refer to Christensen (2011) for further reference and detailed reading.
- 9.
For the distinction cf. Christensen et al. (2006, 2011).
- 10.
As an instructive article in regards to segmenting different income levels in the lower range of the global income pyramid we recommend Rangan et al. (2011).
- 11.
Cf. for a similar argument Werhane and Hartmann (2013).
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- 13.
- 14.
Cf. Schlicht (2008) with reference to Issac et al. (1991) “[...] firms and other institutions provide institutional frames which activate certain types of behavior rather than others.”
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Fürst, M. (2017). Just When You Thought It Couldn’t Get Worse, You Hear: “The Business of Business Is Business”-Some Reflections on a Self-Fulfilling Prophecy and Alternative Perspectives on the Purpose of Companies. In: Wieland, J. (eds) Creating Shared Value – Concepts, Experience, Criticism. Ethical Economy, vol 52. Springer, Cham. https://doi.org/10.1007/978-3-319-48802-8_5
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