Creating Shared Value: A Paradigm Shift from Corporate Social Responsibility to Creating Shared Value

Businesses operating in the modern business world are faced with varying challenges; amongst which is the need to ensure that they are performing their societal function of being responsible in the society in which they operate. This responsibility to society is generally termed as corporate social responsibility. For many years, the practice of corporate social responsibility (CSR) was solely philanthropic, where organizations gave ‘charity’ or ‘alms’ to society, without any link to the organization’s mission and objectives. However, there has arisen a shift in the application of CSR from an act of philanthropy to a strategy with a business model engaged in by organizations to create a win-win situation of performing their societal obligation, whilst simultaneously performing their economic obligation. In more recent times, the term has moved from CSR to creating shared value, which is simply corporate policies and practices that enhance the competitiveness of a business organization while simultaneously advancing social and economic conditions in the communities in which the company operates. Creating shared value has in more recent light found more meaning in underdeveloped countries, faced with deep societal challenges that businesses can solve whilst creating economic value. This study thus reviews literature on CSR, conceptualizing the shift to creating shared value and finally viewing its potential significance in Africa’s development.

Authors:

• Bolanle Deborah Motilewa
• E.K. Rowland Worlu
• Gbenga Mayowa Agboola
• Marvellous Aghogho Chidinma Gberevbie

Keywords:

• Corporate social responsibility
• shared value
• Africapitalism.

References:

[1] Moore, C. (2014). Corporate Social Responsibility and Creating Shared Value: What’s the difference? Heifer International.
[2] Porter, M. & Kramer, M. (2002). The Competitive Advantage of Corporate Philanthropy,’ Harvard Business Review, December 2002, 5-14.
[3] Friedman, M. (1970). The Social Responsibility of Business is to increase its Profits. The New York Times Magazine, Retrieved from: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html.
[4] Orlitzky, M., Siegel D.S. and Waldman, D.A (2011). Strategic Corporate Social Responsibility and Environmental Sustainability. Business and Society Review, 50, pp. 6-27.
[5] Rangan, K., Chase, L.A., & Karim, S. (2012). Why every company needs a CSR strategy and how to build it. Harvard Business Review.
[6] Blowfield, M. (2010). Business, corporate responsibility and poverty reduction. In P. Utting and J. C. Marques (Eds.), Corporate social responsibility and regulatory governance: Towards inclusive development (pp. 124–150). Hampshire: Palgrave Macmillan.
[7] Barnet, R. J. & Cavanagh, J. (1994). Global Dreams: Imperial Corporations and the New World Order New York: Simon & Schuster
[8] McElhaney, K. (2009). A strategic approach to Corporate Social Responsibility. Executive Forum. Retrieved from http://responsiblebusiness.haas.berkeley.edu/documents/Strategic%20CSR%20(Leader%20to%20Leader,%20McElhaney).pdf Accessed on 3rd August, 2015.
[9] Auty, R.M. (1993). Sustaining development in mineral economics: The resource curse. Thesis. London: Routledge.
[10] Magloff, L. (n.d.). How do I create Business Value? Small Business. Retrieved from: http://smallbusiness.chron.com/create-business-value-5266.html. Accessed on 17th March, 2016.
[11] Agwu, M. E. (2014), ‘Strategic impact of inward Foreign Direct Investments on the labor markets of developing economies’ Journal of Management, Marketing and Logistics, 1(4), 297-310.
[12] Lawrence, A., & Weber, J. (2013). Business and Society: Stakeholders, Ethics, Public Policy (14th ed.). India: McGraw Hill Education.
[13] Publications, S. (2012). SAGE brief guide to Corporate social responsibility. Thousand Oaks, CA: SAGE Publications, Inc.
[14] Porter, M. & Kramer, M. (2011). Creating shared value. Harvard Business Review. January-February 2011.
[15] Carroll, A. B. (1991, July/August). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders’ Business Horizons, 34, 39–48.
[16] Amaeshi, K. (2013, July 13). Africapitalism: A philosophy for sustainable business in Africa? Guardian, UK. Accessed January 21, 2016, from http://www.theguardian.com/sustainable-business/africapitalism-philosophy-sustainable-business-africa.
[17] Elumelu, T. O. (2015). The rise of Africapitalism. The World in 2015 (The Economist). Accessed January 05, 2016, from http://www.economist.com/news/21631956-entrepreneurs-will-transformafrica-says-tony-elumelu-chairman-heirs-holdings-and
[18] Amaeshi, K., Adegbite, E., Ogbechie, C., Idemudia, U., Seny Kan, K. A., Issa, M., & Anakwue, O.I. J, (2015), ‘Corporate Social Responsibility in SMEs: A Shift from Philanthropy to Institutional Works?’ Journal of business Ethics.
[19] Ejumudo, K., Edo, Z.O., Avweromre, L. & Sagay, J. (2012). Environmental issues and corporate social responsibility (CSR) in Nigeria delta region: The need for a pragmatic approach. Journal of Social science and public policy 4,1-21.
[20] Sethi, S.P. (2003). Globalization and the good corporation: a need for proactive co-existence. Journal of Business Ethics 43(1); 21-31.
[21] Saeed, M. M., & Arshad, F. (2012). Corporate social responsibility as a source of competitive advantage: The mediating role of social capital and reputational capital. Journal of Database Marketing & Customer Strategy Management 19(4), 219-232.
[22] Barnard, C. (1938). The functions of the executive. Cambridge, MA: Harvard University Press.
[23] Adeyanju, O.D. (2012). An assessment of the impact of corporate social responsibility on Nigerian society: The examples of banking and communication industries. Universal Journal of Marketing and Business Research 1(1), 017-043. Retrieved from: http://universalresearchjournals.org/ujmbr/pdf/2012/May/Olanrewaju.pdf Accessed on 4th March 2016.
[24] Fredrick, W. C. (1960). The growing concern over business responsibility. California Management Review 12(4), 54-61.
[25] Lodge, G. C. (1970). Top priority: renovating our ideology. Harvard business Review (September-October), 43-55.
[26] Idemudia, U. (2011). Corporate social responsibility and developing countries: Moving the critical CSR research agenda in Africa forward. Progress in Development Studies, 11(1), 1-18.
[27] Idemudia, U. (2014). Corporate social responsibility and development in Africa: Issues and Possibilities. Geography Compass, 8(7), 421–435.
[28] Carroll, A. B. (1979). A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 4, 497–505.
[29] Carroll, A. B., & Buchholtz, A. K. (2006). Business and society: Ethics and stakeholder management (6th ed.). Cincinnati, OH: South-Western/Thomson.
[30] Bowen, H., (1953). Social responsibility of the businessman. Harper and Row, New York.
[31] Crowther, D. & Aras, G. (2008). Corporate Social Responsibility. Ventus Publishing.
[32] Carroll, A.B. (2009). A look at the future of business ethics. Athens Banner-Herald.
[33] Motilewa, B. D, & Worlu, R.E.K. (2015). Corporate Social Responsibility as a tool for gaining competitive advantage. International Journal of Multidisciplinary Research and Review 1(1), 16-24.
[34] Jensen, M. (2000). Value Maximization and the Corporate Objective Function. Harvard Business School Review.
[35] Visser, W. (2006). Revisiting Carroll’s CSR Pyramid: An African Perspective. In E. Pedersen et al., (eds), Corporate Citizenship in Developing Countries (pp. 29-56) Copengham Business School Press: Copengham.
[36] Blowfield, M., & Murray, A. (2011), Corporate responsibility (2nd ed.). New York: Oxford University Press.
[37] Levitt, T. (1958). The Dangers of Social Responsibility. Harvard Business Review, 36 (5), 41–50.
[38] Scott, B. R. (2006). The political economy of Capitalism. Harvard Business Review. Retrieved from: http://www.hbs.edu/faculty/Publication%20Files/07-037.pdf.
[39] Porter, M.E. (1999). Green and Competitive: Ending the stalemate. Journal of Business Administration and Policy Analysis (1701-9680), 215.
[40] Elumelu, T. O. (2013). Africapitalism, The path to economic prosperity and social wealth: Rebuilding and Rebranding Africa as a land of investment, innovation and entrepreneurship. Heirs Holdings. Retrieved from: http://www.heirsholdings.com/wp-content/uploads/2013/04/Africapitalism-Path-to-Economic-Prosperity-and-Social-Wealth.pdf.