Corporate Social Responsibility Strategy & Society Michael Porter and Mark Kramer Harvard Business Review

Many Companies have Already done much 1. They put business against society, when clearly the two are interdependent 2. 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 obligation 2. Sustainability 3. License to operate 4. 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 Areas 1. Quantity and quality of bussiness inputs 2. The rules and incentives yhat govern the competition 3. The size and sophistication of local demand 4. The local availability of supporting industries

Choosing Which Social Issues to Address

Creating a Corporate Social Agenda  Responsive CSR  Strategic CSR

Corporate Involvment A 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