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

Many Companies have Already

done
1. They much
ut !usiness against society" when
clearly the two are interdeenden
interdeendentt
#.
They ressure
in generic wayscomanies
instead o$ to
in think o$ %SR
the way
most aroriate to eaach $irms
strategy
 

Being Hold Accountable for

Social
 Issues
'n $act the most common cororate
resonse has !een neither strategic nor
oerational" !ut
 %osmetic" i!liv relations and media

camaigns
 ()* o$ the #+, largest multinational

comanies u!lished %SR reorts

 These reorts rarely o$$er at coherent

$ramework $or %SR activities

 

Four Pevaili
evailing
ng usti!ca
usti!cations
tions
forProonents
 CSR  $or %SR have used $our
arguments to maake their case-
1.
#.
Moral o!ligation
Sustaina!ility
. /icense to oerate

). reutation
 

"# Moral $bligation

 Balancing cometing values" interests and
costs0

 2amle-
 3oogles entry to %hina
 

%# Sustainability
 The notion a$ sustaina!ility can !ecome so
vague as to !e meaningless



Transarency
ansarencymay
Philanthroy vs. corrution
contri!ute to
4sustaina!ility4 o$ a society
 They o$$er little !asis $or !alancing long5

term o!6ectives against the short5term

costa the incur
 Trade5o$$s without o$$ering a $ramework
 

&# 'icense(to(operate
 7 $irm that views %SR as away to calm
down ressure grous o$ten $inds that this
aroach devolves into a series o$ short5
term de$ensive reactions
 75never5ending u!lic relations alliative

with minimal value to society and to

stratigic !ene$it $or the !usiness
 

)# Reputation
 'n stigmati8ed industries" such as
chemicals and energy" a comaany may
instead ursue social resonsi!ility
initiatives
initiatives as a $orm og insuranc
insurance
e
 2amle-

 Body Sho have distinguished themselves

through an e2traordinary long5term

commitment to socila resonsi!ility
resonsi!ility
 

 All Four
Four Schools*
 7ll these $our schools o$ thought share the
same weakness-


They $ocus
!usiness onsociety
and the tension
rather!etween
than on their
interdeendence
 

Integrating Business and

Society
+Porter

and
Success$ul ,ramer-s
cororations need a.heory/
healthy
society


7nd healthy societies needs success$ul

comanies
 Both !usiness decisions and social olicies

must $ollow the rincile o$ shared value

 

Identifying the Points of

Intersection


9itually every
value chain activety
touches onin a comanys
the communities in
which the $orm oerates" creating either
ositive or negative social conse:uences
c onse:uences
 

Competitive Conte0t 1 Four

 Areas
1. ;uantity and :uality o$ !ussiness inuts
#. The rules and incentives yhat govern the

.
cometition
The si8e and sohistication o$ local
demand
). The local availa!ility o$ suorting
industries
 

Choosing 2hich Social Issues

to Address
 

Creating a Corporate Social

 Agenda

 Resonsive %SR
 Strategic %SR
 

Corporate Involvment

 A Strategic Approach
 

Integrating

Inside(out
Practices
 and
Pioneering value $utside(in
chain innovations and
addressing social constraints to com
etitiveness
etitiveness are each ower$ul tools $or
creating economic and social value
 <hen value chain ractices and

investments in cometitive conte2t are

$ully integrated" %SR !ecomes hard to
distinguish $rom the day5today !usiness og
the comany
 

Creating a Social 3imension to

the
=ot 4alue Proposition
every comany can !uild its entire
value roosition around social issues


But adding ao$$ers

roosition sociala dimension to in
new $rontier the value
cometitive ositioning
 

$rgani5ing for CSR 

 Strategy is always a!out making choices"
and success in %SR is no di$$erent.


't is a!out
$ocus on choosing which social issues to
 

.he Moral Purpose of

Business
Perceiving social resonsi!ility as !uilding
shared value rather than as damage
control as a PR camaign will re:uire
dramatically
dramatically di$$erent thinking in !usiness.
 <e are concinced" that %SR will !ecome

increasingly imortant to cometitive

success