Creating Shared Value

Porter Prize for Creating Shared ValuePP_Creating_Shared_Value

Porter and Kramer urge leaders to recognize that “shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success“.

The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognizing and capitalizing on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.

Companies create Shared Value in three ways:

  • Reconceiving product and markets: Companies can meet social needs while better serving existing markets, accessing new ones, or lowering costs through innovation.
  • Redefining productivity in the value chain: Companies can improve the quality, quantity, cost, and reliability of inputs and distribution while they simultaneously act as a steward for essential natural resources and drive economic and social development.
  • Enabling local cluster development: Companies do not operate in isolation from their surroundings. To compete and thrive, for example, they need reliable local suppliers, a functioning infrastructure of roads and telecommunications, access to talent, and an effective and predictable legal system.

The company will be evaluated on following measures:

  • Social problem being addressed
  • Geographical reach and societal activities
  • Investments in community development on business
  • Linkage between the social problem and company’s competitive position and strategy

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© [2012] Institute for Competitiveness

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