Introduction
Lately business activity has been taken as one of the main causes of economic, social and environmental problems in society, there is the idea that business sustainability has caused some type of damage or deterioration. And even more this idea has grown as a result of the world economic crisis. The confidence that should be had towards the business world, has diminished considerably. A large part of the blame lies with the companies themselves, as they continue with the old approach of making profits by optimizing financial performance in the short term, without taking into account the real needs of the clients or some new aspects that offer long-term benefits. term.
It seems that the solution is that both company and society must join forces to obtain a common benefit that implies the creation of economic values in a certain way that values are also created so that society is able to face its needs and challenges.
The application of these values in an organization must be oriented towards all the elements that comprise it so that they learn to function freely and reasonably through a scale of shared values and their conscience as the great regulator of all of them, so that they learn to value with everything his being, reason and will so that in this way he leans towards what is good, just, noble and valuable, but he must also learn to sacrifice less important values for values that are more shared.
What is shared value
Shared value: " It is a series of policies and operational practices that optimize the competitiveness of a company and in the same way improve the social and economic conditions of the society where they operate."
The creation of shared value focuses on recognizing and expanding the unions between the social and the economic. This concept is based in the first place on the fact that economic and social progress must be used with concepts of value. Now, a value is a benefit in relation to cost, not just a benefit. The creation of value is an idea that has long been taken into account in businesses where profits are the income that is generated from customers, subtracting the cost that is generated. However, companies rarely approach social aspects from the point of view of value, but have approached it as a matter of little relevance. In the social environment, thinking in terms of value is even less common,social and government organizations see success only in terms of the benefits made or the money that was spent.
How the idea of shared value came about
The capitalist system is stagnant, it is currently considered one of the main causes of social, environmental and economic problems and most people believe that companies have grown at the expense of the community itself.
Part of the blame lies with the companies themselves, which were stuck in the old concept of value creation, since value is still considered as obtaining short-term economic benefits without considering the most important needs of customers that many could bring. more long-term benefits.
But companies must take into account the depletion of natural resources that they themselves need, the viability of suppliers and the situation of the community in which they produce and sell.
The solution lies in the principle of value creation, in which economic value is created in a way that also creates value for society by taking into account its needs and challenges. Businesses must combine corporate success with welfare and social progress. Courage is not a social responsibility, philanthropy or sustainability but a new way to achieve economic success. It is believed that based on value, a great transformation in business thinking is generated.
Today world-class companies are making an effort to create shared value by understanding the connections between corporate success and social progress. This is where the need to create skills and knowledge for a better appreciation of social needs arises. It is also important that the government pass regulations that enable shared value rather than oppose it
Capitalism tends to take care of human needs, create work and create wealth, but it is inefficient in meeting all the challenges that society is currently having. This is the moment in which the concept of capitalism must evolve, we are all asking for it, especially the new generations eager to grow. Shared value is a new opportunity to reinvent and redesign business.
Value chain
There are numerous aspects that involve the value chain of a company such as natural resources, health, safety, etc. The opportunities you have to create shared value arise because social problems can generate economic costs in the value chain of that company.
The new approach to shared value gives consistency to productivity and social progress, synergy increases and new ways of operating are invented. However, few companies have so far adopted this new approach in some areas such as health, safety, environment, personnel capacity, but the signs of change are unmistakable.
Here are some of the ways the shared value approach transforms the value chain. Efforts are still being made so that these and other areas can progress.
Logistics and energy in value chains
The use of energy in the value chain is being restructured, in processes such as transportation, construction, distribution channels, supply chains and support services. This is the result of higher energy prices and awareness for energy optimization. As a result, improvements are obtained in energy management through technology, recycling, cogeneration, etc. that together generate shared value.
Use of resources in value chains
Environmental awareness has grown today together with technology, focusing on areas such as the use of water, raw materials, waste management, etc., it will influence all parts of the value chain and will extend to suppliers and channels, causing trash cans to fill more slowly
EXAMPLE, Coca-Cola has reduced its water consumption by 9% compared to 2004, almost half of its 20% reduction target for 2012. Dow Chemical managed to reduce its consumption of fresh water at its largest production site in one trillion gallons - enough to power about 40,000 people in the United States for a year - saving $ 4 million.
Acquisition
In the past, companies used to commoditize, that is, to seek a marketing strategy that targets product consumers who want something equal but cheaper. But recently companies have come to understand that marginalized suppliers in lower cost locations cannot keep up with their production or improve its quality. With the increase in accessibility to inputs, technology and having financing, companies could then improve their quality and productivity, with the above, lower prices would be generated, suppliers would grow and their environmental impact would be considerably reduced, boosting efficiency, creating shared value.
Distribution
It is necessary to make a review of the distribution practices from the point of view of shared value, some companies such as iTunes or Google show that their distribution methods are drastically reduced in the use of paper and plastic since the condition of the company makes your type of distribution more profitable, For example, Hindustan Unilever is creating a new “direct-to-home” distribution system, carried out by businesswomen under unfavorable conditions, in Indian towns of fewer than 2,000 inhabitants. Unilever offers microloans and training and currently has more than 45,000 entrepreneurs covering some 100,000 towns in 15 states.
For example, Hindustan Unilever is creating a new 'direct-to-home' distribution system carried out by entrepreneurs under unfavorable conditions, in Indian towns of less than 2,000 inhabitants. Unilever offers microloans and training and currently has more than 45,000 entrepreneurs covering some 100,000 towns in 15 states.
Employee productivity
A decent salary for employees, safety, well-being, training, training, among others, are the factors that influence the productivity of the company, therefore, as these factors are as fair as possible, it will be reflected in benefits for the company itself. business.
Location
The cheaper the location, the productivity and costs will increase, on the one hand due to the costs of energy and air pollution and, on the other, due to the recognition of the cost of production of dispersed systems by the costs of the acquisition of inputs. from great distances that apparently cannot be seen, but have an impact on costs, and therefore on the price of the product.
Competitive advantage and social benefit
Addressing social issues can create productive benefits for a company in different ways, since if you invest in a social welfare program, everyone benefits, since both employees and their families are healthy and comfortable, then the company decreases absenteeism from work and increases productivity.
The following figure shows the union of factors that influence the productivity of the company:
Role of social entrepreneurs
Social entrepreneurs often look beyond established corporations so that they are capable of discovering new opportunities. Companies that create shared value can go much further than some social programs that are often unable to grow and become sustainable. A true social entrepreneur is rated based on their ability to create those shared values that are not just social benefits.
Difference between shared value and corporate social responsibility
It is common to be confused with these two concepts since it seems that they pursue the same objectives, but the creation of shared value must overcome corporate social responsibility when directing the investments of companies in the communities, on the contrary, companies with corporate responsibility are they focus mostly on reputation and have limited connections to commerce, making them difficult to justify and sustain in the long term.
Companies with shared value develop comprehensively for the profitability and positioning of the same company. Try to balance resources and experience, unique to each company, in order to create economic value by creating social value.
conclusion
The conceptualization of shared value focuses on the union between social and economic progress.
It has the power to be the driver of global business growth as companies such as Nestle, Google, IBM, Johnson & Johnson, Unilever, Wal-Mart, among others are doing.
The creation of shared value will lead to new approaches that will generate more innovation and growth for companies, and also more benefits for society.
Bibliography
- Ethic. (February 22, 2012). The vanguard of sustainability.Kramer, MP Strategy and SocietyKramer, MP THE CREATION OF SHARED VALUE. Deusto Lessem, R. (1992). Management of corporate culture. Spain: Diaz de Santos.
