This work details the proposal of Professor Michael Porter, this technique is called "shared value".
Likewise, the essence and methodology of this tool, which is considered a new business vision, is also explained, as well as some companies that have implemented shared value.
For years, the concern of companies was only their own economic well-being, the contribution they made to society was: payment of wages, payment of taxes, diversity of quality products and services, over time this idea has evolved.
XIX CENTURY
In Europe movements were initiated to meet the needs of workers, in this way industries provided their staff with benefits such as: schools, health centers, recreation places, among others, some of these places today exist as:
- Colonia de Santa Colomo de Cervello (Barcelona) Textile industrial colonies in river channels. Cooperative movement in the agricultural sector Consumer cooperatives
ROLE OF THE STATE
The role of the state in organizations can be described from the following objectives.
The state must supervise and enforce the law, in aspects such as unfair practices between competitors, monopolies, unfair and deceptive practices, this in order to safeguard customers, suppliers and employees.
Another of its missions is the collection of taxes and the imposition of fines for contempt of law.
Finally, the state must adequately distribute the money between companies and society.
ROLE OF CIVIL SOCIETY
Society is the one who receives the distribution of wealth from the states, this is important because the entire society makes tax payments that are destined for the various sectors, including industry, thus contributing indirectly to the development of goods and services.
There must be a balance between the exchange of company and society resources.
Society is the one who provides labor for the manufacture of products or for the elaboration of services, companies pay this by means of wages, however, with this they only remunerate the employee, leaving a debt with society in general.
ROOTS OF SHARED VALUE
Michael E. Porter and Mark R. Kramer, in an article mention that capitalism has failed to meet the most important needs of society, such as health, the generation of well-being, nutrition, protection and preservation of the environment.
This means in other words, that organizations have lost sight of the real needs of their customers, this has led them to create products that do not fully satisfy society and sometimes even harm.
Given this, it is imperative that companies analyze their market and develop new goods and services that benefit both parties. (GLOBAL, 2016)
DEFINITION OF SHARED VALUE
"They are business practices that increase the competitiveness of the business while improving the social, environmental and economic conditions of the communities in which it operates" (KRAMER, 2011)
“The operational policies and practices that improve the competitiveness of a company, while helping to improve economic, social and environmental conditions in the communities where it operates. It focuses on identifying and expanding the connections between economic and social progress. Companies create shared value, pre-conceiving products and markets; redefining productivity in the value chain and building support clusters around company facilities ”(PORTER, 2013).
HOW TO CREATE VALUE
Michael E. Porter is considered the founder of the strategy called shared value, this author indicates three ways to achieve it.
Reconceive products and markets: aims to satisfy unsatisfied customer needs, in order to increase sales, thereby obtaining reciprocal benefits. Likewise, this is intended to achieve greater market share and profitability through social and environmental benefits provided to the population.
Some examples of unmet needs on the part of society are: housing, health, environmental damage, security, etc.
There are companies that execute this point, for example, the food industry that currently offer a range of specialized products for diabetics, vegans, lactose or gluten intolerant people.
Redefining productivity in the value chain: it is about efficiently using resources, the external environment in which the supply chain develops must be analyzed and improvements must be made in order to avoid unnecessary expenses. Some areas to consider are distribution, supply, productivity, location.
Development of local clusters: aims to interact with community organizations, invest in strengthening these institutions.
You can also collaborate with local suppliers, the success of a company lies in the collaborators it generates.
Summarizing the following we have:
Shared value
DIFFERENCE BETWEEN SHARED VALUE AND SOCIAL RESPONSIBILITY
The difference is that social responsibility is mainly focused on benefiting an unprotected sector of society, without apparently receiving anything in return.
On the other hand, shared value seeks a balance in benefits between company and society.
Shared value tries not to generate unnecessary operating costs, the following illustration details the differences. (GUARD, 2011)
Differences in shared value and social responsibility
HOW TO MEASURE SHARED VALUE
The way in which shared value should be measured is through the achievement of social and organizational results, one way is through the indicators of leading providers of investment decision tools, such as EIRIS (Foundation and Ethical Investment Research Services) or MSCI (Morgan Stanley Capital Internationa l, which provide a set of sustainability indicators related to its environmental, social and governance (ESG) management to guide investment decisions and guide the disclosure of the socio-environmental, ethical and corporate governance impacts of investment projects and companies.
This process includes four phases. (PORTER M., 2011)
PHASE 1: IDENTIFY THE SOCIAL PROBLEMS TO BE ADDRESSED
At this stage, the problems that society is currently facing should be identified, the unprotected sectors should be chosen and prioritized in order to gradually solve them through shared value. Initially, special attention is paid to that can be classified as urgent.
PHASE 2: CONDUCT THE BUSINESS CASE
In this phase a report is made, this writing must contain the objectives, justification, possible costs, methodology, goals and all the planning related to the implementation of the shared value.
PHASE 3: FOLLOW PROGRESS EVOLUTION
The objective of this stage is to measure the achievement of the proposed objectives, the report prepared in step 2 can be taken as a reference. Some of the measurement approaches that can also be considered are the following.
Shared Value measurement approaches
PHASE 4: MEASURE THE RESULTS AND USE THE DATA TO UNVEIL NEW VALUE
In this last step, the results achieved are validated. If the results of the activities were positive, the budget can be authorized to continue generating value.
PHRASES BY MICHAEL PORTER ABOUT SHARED VALUE
(MANAGEMENT, 2011)
- Companies today are no longer seen as solutions for society, but as problems. The relationship between the profitability of business and society has very profound implications. We moved from philanthropy to CSR and sustainability and now we must move on to Creating Shared Value Today, Capitalism is almost a bad word. We have to use capitalism to create social impact. To be honest, CSR has not brought the benefits of capitalism to society. Efficiency in the economy and the social process are not opposite. Businesses must reconnect the success of the company with social progress. It is necessary to create economic value that generates social benefits beyond the natural ones of the company. Shared value is not social responsibility, philanthropy, or sustainability. It is a new way to achieve economic success.Shared value is to create economic value from the generation of social benefits. Shared value is not theory, it is already a reality. Companies that don't embrace it will be left behind.
COMPANIES THAT HAVE CREATED SHARED VALUE
NESTLE
This company, for its production processes, uses resources from society for what it does not pay such as: water, air, environment, qualified personnel, security, health, among others.
The company in recent years has invested in areas such as: education, production of goods and services that society needs, improvement of the quality of life of its workers, development programs in communities. (SOHLMAN, 2014).
UNILEVER
This company has redirected its efforts to develop products that meet the needs of its customers, among the products with this new focus are Rexona, Lipton, Dove, Ponds, Ades to name a few.
FEMSA
This company offers a range of products for the different tastes of its customers, Coca Cola cero is a drink that is sweetened with zero sugar, an alternative for people who take care of their health but without sacrificing the taste of having soda.
WALMART
This chain with multiple brands such as Aurrera winery and suburbia, launched a so-called "green bag", its purpose is to reduce the use of plastic bags in the process of delivering items to their customers, thereby reducing the negative ecological impact on the society, since this bag is ecological and reusable.
TELMEX
This company understands that the central force of its success has been its collaborators, that is why it has focused on promoting education among children and young people, through programs and scholarships it has favored society in order to increase the educational level in Mexico.
BIMBO
Bimbo has made changes in its prices and ingredients, responding to the demands of society since its "bread" product is part of the diet of the Mexican population.
TELEVISA
He has designed projects with responsible social content that promote core and essential values for individuals. (MARAM, 2013)
FUTURE OF SHARED VALUE
With the increasing globalization and competition in the markets, some organizations are opting for different strategies that ensure their duration in the market, however, the threat is getting stronger.
Professor Porter mentions that “The companies that have as a strategy the creation of shared value are the ones that will be successful in the next 20 years. Shared value is the greatest opportunity for growth and innovation in the global economy, and the next chapter in the mindset of managers. ”
As shared value can be seen as a great weapon for organizations, shared value creates loyalty in customers, thus ensuring sales and permanence in the markets.
Today's companies must see this practice as the link to meet the needs of society and the growth of their business, therefore, without a doubt, the success of companies in these times must include shared value..
CONCLUSION
Shared value has gained ground today, however, and unfortunately there are companies that have not yet carried it out, as noted in the previous letter, its implementation is everyone's task, so let's be aware and do our part from the place in which we find ourselves, be it as a worker, entrepreneur, citizens and even as students when making the correct policies that our institution dictates.
THESIS PROPOSAL
PREPARATION OF A SHARED VALUE IMPLEMENTATION MANUAL IN AN ORIZABA COMPANY
OBJECTIVE: to provide the company with a methodology for the execution of shared value.
BIBLIOGRAPHY
- GLOBAL, R. (08 of 02 of 2016). RESPONSIBLE JOURNAL. Retrieved on 02/07/2016, from http://diarioresponsable.com/opinion/17011-el-valor-compartido-una-evolucion-de-la-rseGUARDIA, R. (2011). CSR COMMITMENT. Retrieved from http://www.compromisorse.com/opinion/ Presidente/valores–marketing/ramonguardia/el-futuro-de-la-rse-el-valor-compartido/KRAMER, PY (JUNE 2011). PACIFIC. Retrieved on 07 of 02 of 2016MANAGEMENT, E. (NOVEMBER of 2011). PWC. Obtained from http://www.pwc.mx/actualidadespwc/expomanagement-2011-10-anosMARAM, L. (04 of 2013). EXPOK. Obtained from http://www.expoknews.com/las-100-empresas-masresponsables-de-mexico-y-las-100-mas-reputadas/PORTER. (05 of 11 of 2013). VANGUARD. Retrieved on 02/07/2016, from http://www.vanguardia.com/opinion/columnistas/gustavo-galvis-hernandez/232483-lacreacion-de-valor-compartidoPORTER, M.(2011). BUSINESS COMMITMENT. Obtained from http://www.compromisoempresarial.com/carrusel/2014/10/medir-medir-y-medir-elvalor-compartido/SOHLMAN, T. (OCTOBER 11, 2014). NESTLE. Obtained from
