Creating Shared Value: Solving Global Issues.

Can Creating Shared Value be a good solution to social and environmental problems? Gavein Hidam UNIVERSITY ENGLISH Margaret Valerie WEBSTER 30th November 2013

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Can Creating Shared Value be a good solution to social and environmental problems?
The world is full of social and environmental problems: pollutions, climate changes, disasters, poverty, malnutrition and so on. And yes, its true that there are many organizations, such as NGOs and even governmental groups, taking up steps to help solve these problems with tremendous energy and a new level of non-profit organization. But the fact is that it is only ceded to government and NGOs; it is not effective to an extent to solve the problems in large-scale, even though its quite mobilized. And this is certainly due to less philanthropic donations and charities to solve these issues. Therefore, if a business model that can bring out the social and environmental values while creating economic value, which is Creating Shared Value (E.Porter, 2011), it can minimize the degree of the problems. The impact will be in large-scale and more effective. The first reason that it can be a good solution is that most countries have their resources in the hand of business corporations while the other entities just utilize them. If we see in the case of the United States, almost 82% of the countrys resources are in the hands of the Corporations. Out of the 100 largest economies in the world, 52 are corporations and 48 are countries according to the world economy survey (Share The Worlds Resources (STWR)). So, from this we know that there abundant resources with business corporations, and solving these global issues need a large amount of resources. Therefore, these corporations can address and solve these social and environmental problems or create resources while addressing these issues. This can be materialized by setting certain policies that pushes the companies to compete among themselves to advance both economic and social conditions simultaneously, especially in the communities where corporates play a larger role.

Creating Shared Value: Solving Global Issues. 3 Second, if a product or service is created through business, it can be better allocated with need as the core determinant of the distribution. Such strategy can address social problem more effectively relative to the NGOs, Foundations or Government. Creating shared value can make its way faster as business grows much faster, about four times the global economic growth. Hence, if this rate of growth can be bought while solving these social and environmental problems, it could save as well as generate values of society, environment and business sustainably. Business entails markets to function. To create such kind of demanding and supportive community, business corporations should offer job opportunities to the community, provide appropriate products, and help the people accumulate wealth. Profit procured by shared value enables society and companies to grow faster because what is good for the community should be good for the business. This method of creating shared value can invariably taper poverty in our community and ultimately generate better living condition for all. Most people see business itself as the problem and one of the exacerbating factors of problems and rightly so, in many cases. One cannot deny that business causes problems like deforestation, contaminating and polluting Air, water and land. Its also true that business generates profit at the expenses of our nature and environment or border community. This, however, is a primitive view or conventional way of business, which focuses solely on optimizing the short-term economic performance while ignoring the long-term success, social and environmental values. Changes are happening in the system of performing business. Capitalism in its highest form is to meet and improve the human needs and demands. So, we need to craft business in such a way that it meets the needs of our current state of society which demands more and more with increase in population. Creating shared value method meets this need of upgrading business. It preserves the social and environmental values while generating economic value. What business can do to create shared value? By reconceiving the products and the markets there are many unmet needs of the society which needs to be addressed: providing better

Creating Shared Value: Solving Global Issues. 4 health care, better housing, nutrition, better financial security, no damage to the environment. By creating a merger between profit and non-profit, as it helps to create shared value, a company called Water Health International, provides purified water with innovative technology to more than one million people in rural areas and at minimal cost. At the same time it receives a lot of funds from external sources like the International Financial Corporation of the World Bank and Dows International. There are numerous good examples leading towards creating shared value like Brazilian Fabria, which produce more papers than others without cutting down trees but using eucalyptus. We can see that innovative technologies and sustainable business can reduce the environmental impacts while growing the economic and social value. In fact, such kind of business is the way through which these problems can be solved effectively. Hence, to make this happen Business people must change the system towards more innovative method and ultimately alter the way business is seen. Sometimes due to negative public view, even the government doesnt want to cooperate with businesses and thereby increase taxes, tariffs, and restrictions. After all, people only suffer the cause for it and this becomes a social issue and thats how business is caught in this vicious cycle. Therefore, the revolution must start from the business corporation itself and the government should learn how to enable these corporations to bring out shared value. Government ought to be friendly with improvements, and reward for creating social value rather than going against. As a result, the people will be able to get what they need while it saves the environment, and finally solve both the problems. What we need is the change of attitude towards and system of business with more sustainability in mind to preserve the social and environmental value. Business creating shared value can be the better solution to solve the global issues.

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REFERENCES:
HARVARD BUSINESS REVIEW: Rethinking Capitalism (video)- by Michael E. Porter, (Jan, 2011). Retrieved from http://blogs.hbr.org/2011/01/rethinking-capitalism/ The Big Idea: Creating Shared Value, How to reinvent capitalism? Unleash a wave of innovation and growth. -By Michael E. Porter and Mark R. Kramer. (January- February 2011). Retrieved from http://www.hks.harvard.edu/mrcbg/fellows/N_Lovegrove_Study_Group/Session_1/Michael_Porter_Creating_Shared_Valu e.pdf Share The Worlds Resources (STWR): The Issues: Multinational corporations. Retrieved from http://www.stwr.org/multinational-corporations/key-facts.html TEDS: Michael Porter: Why business can be good at solving social problems. (Jan 2013. Posted Oct 2013) Retrieved from http://www.ted.com/talks/michael_porter_why_business_can_be_good_at_solving_social_pr oblems.html