Articles MSI - Porter: Creating Shared Value

6 important questions on Articles MSI - Porter: Creating Shared Value

In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. A big part of these problems lies with companies themselves. Companies must take the lead in bringing business and society back together. Where is according to Porter the solution?

In the principle of shared value, which involves creating economic value in a way it also creates value for society by addressing its needs and challenges. Business must reconnect company success with social progress. The purpose of the company must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth.

Describe the concept of shared value (what an increasing number of organizations have begun with) according to Porter?

The concept of shared value focuses on the connection between societal and economic progress. It has the power to unleash the next wave of global growth. There are 3 key ways to create shared value opportunities: 
-By reconceiving products and markets
-By redefining productivity in the value chain
-By enabling local cluster development
This will lead to new approached that generate greater innovation and growth for companies and greater benefits for society.

How does Porter define the concept of shared value?

As policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.
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What does creating shared value presume (verondersteld)? (Porter)

Compliance with the law and ethical standards as well as mitigating any harm caused by the business, but goes far beyond that. It is a force that will drive the growth in the global economy. It will be more effective and more sustainable than the majority of today's efforts. 

What predicts/advice Porter regarding shared value?

Shared value is defining a whole new set of best practices that all companies must embrace. It will also become an integral part of strategy. The essence of strategy is choosing a unique positioning and a distinctive value chain to deliver on it.The competitive advantages that arise from creating shared value will often be more sustainable than conventional cost/quality improvements. The cycle of imitation can be broken.

The opportunities to create shared value are widespread and growing. Why? (Porter)

Shared value focuses companies on the right kind of profits, profits that create societal benefits rather than diminish them.

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