Introduction
The creation of shared value is a proposal created by Harvard University professor Michael Porter, through which the business world is awakened to renew its business processes and activities, taking into account the social environment in which it operates, if sacrificing the search and obtaining of profits but if raising awareness of the needs and benefits that can be achieved in the social sector.
Within this work, the elements for the creation of shared value can be identified, which are:
• Redefinition of products and services
• Analysis and conception of productivity in the value chain
• Formation of industrial specialization niches
Examples are presented of the main companies that have chosen to take shared value as a new way of doing business, within the companies mentioned below in this work are:
• Wal-Mart
• Unilever
• IBM and Intel
• Nestlé
Nestlé is a company that is highly committed to shared value and its activities and contributions are reflected, as well as improvements and support for the social environment.
Introduction to shared value
“Joining is a beginning; staying together is progress; working together is success ”. Henry Ford.
Shared value is seen as a fresh new business vision that promises to catapult organizations into markets and the economy. Today the market is globalized and that is why a company must seek to strengthen its economy by transforming and modernizing the way of doing business.
Michael Porter is considered the founder of the novel strategy called shared value. In consideration of what was raised by the Harvard University Professor, Michael E. Porter, shared value is conceived as the business tool that allows the constant search to obtain an economic amount that in turn gives rise to the benefit of other agents of the economy, specifically it is a commitment to the society that surrounds it to achieve growth.
Shared value is considered a new version of business that refreshes the business world and makes organizations aware that they must contribute to general progress and not their own, mainly to reinvent the image of companies, which society considers materialistic, taking advantage of the needs of the population and employees.
No social responsibility- No philosophy
It is not about doing charity work, nor is it talking about a lifestyle, rather it refers to the change in the mentality of the leaders of the companies; leaving behind the absolute idea of obtaining profits that clouds the image of organizations, because in the eyes of society they seek to enrich themselves at the expense of whatever and whoever. It is because of this capitalist tendency that Professor Michael Porter proposes the possibility of contributing to society in some way the benefits that it receives from it in the pursuit of its business objectives. Which not only will give the company the satisfaction of having done something for its social environment, but also contributes to sympathize with people, who see reflected the efforts of organizations for a common good;revitalizing companies and capitalism itself. Shared value is clearly a new way of presenting business opportunities, leaving behind the antagonism of organizations before society.
"In the business sense, as stated at the beginning of this work, the aim is to establish three elements that form the raison d'être of shared value, beginning with the formation in the market of business environments that allow doing business, not only strongly environments being a priority. economic, but also those developing economies, but that in the same way need the goods and services that as an organization can be offered; It is in these cases where companies use bodies such as the government and foundations to reach society. A next step is to include in the market those unprotected societies but that undoubtedly require our products and / or services, to later form support niches for innovation,production and mainly of specialization of the products required by the organization ”(CODESIN, 2011).
Creation of shared value
Many companies today have been given the task of forming shared value, where the main element is a function of society, for which the product and service provided must be analyzed as a company, for which it is necessary define and establish new strategies in economies and markets (Scribd.com, 2011).
Later, the next step to achieve shared value is to relocate the concept of productivity in the value chain.
Another element to consider is based on the creation of niches to support the industry (known as clusters), understood as clusters the association of efforts and organizations to promote and enhance the prevailing industrial activity in a specific geographical location.
This is where the Win-Win relationship is considered, in which the parties related to the purchase, sale or provision of a service receive and share, hence the name “shared value”.
Companies and their foray into shared value
Among the organizations that are currently opting for this new business generation are:
General Electric (GeneralElectric, 2012)
General electric has implemented a strategy called “Ecoimagination” (Ecomagination, its name in English), which is presented on its website as a new business strategy to encourage the development of the organization in conjunction with social development, which allows the creation of economically and ecologically beneficial goods and services, without counteracting the inherent commercial and business aspect.
In essence, this initiative of General Electric, allows to contribute to the economic growth of the company taking into consideration that the activities necessary to achieve it must be careful and protective of the environment.
Wal-Mart
Wal-Mart is an international commercial chain that is one of the main and most well-positioned in Latin America, which has brands such as: Suburbia, Bodega Aurrera, Superama, Sams, Vips and El portón.
The main characteristic in the creation of shared value by Wal-Mart is found in the reformulation of the economic and value cycle, whose task was to reduce the formation of pollutants and fuel costs through the reduction in the use of packaging, and in the same way reduce your expenses by rethinking your delivery routes.
IBM and INTEL
Companies in the information technology and communications sector, which are leaders in their line of business, but have currently joined the changes that are proposed in the essence of shared value.
Among the main changes that were carried out in IBM and INTEL are, the increase in their returns thanks to actions such as:
• Use of digital intelligence to:
• Reduce the use of electricity within its activities and production.
Unilever
It is a company that is responsible for the production of food products and skin care and hygiene, among its main brands are (Unilever, 2012):
• Ades, Hellman's, Knorr, Lipton, Maizena, Ax, Clear, Dove, Ponds, Rexona, Lux, Vasenol, Sedal, among many others, the ones currently mentioned being the best known in our country.
This company, like those previously mentioned, has made shared value part of its business life, and among the main actions it has carried out in response to v. shared are: (Scribd.com, 2011)
• Provide credit and training to approximately 45,000 entrepreneurs.
• Creation of a project to support women named “Shakti” (in India) since through this project it allows women to contribute to their homes with income through their entrepreneurial tasks.
• Through its hygiene and cleaning products, it allows improving health habits and therefore reducing contagious diseases.
International companies are the ones that are now carrying out the tasks and functions of shared value, since they are the ones that have the greatest impact on society and that can collaborate with it due to the infrastructure and economic protection they have. In a matter of local or medium-sized companies, important factors such as the company's ability to carry out and join its activities and processes new strategies based on shared value should be analyzed, and in the same way study the external environment of the companies. organizations to make this new and revitalized way of doing business possible: shared value.
Nestle
Nestlé is one of the companies that has implemented the creation of shared value with greater force, promoting that through its activities and processes elements are understood that strengthen and define the value chain, thus supporting society and its environment and making use of of the commercial and business advantages that arise.
Creating shared value: Nestlé
Below are the main work carried out by the Nestlé company regarding the projects carried out for shared value.
Rural Development (Nestlé, Rural Development, 2012)
Within this theme, different activities and support programs are carried out for the rural sector, mainly for primary producers. The supports consist of preparation of techniques, credits, and negotiation agreements that allow improving and strengthening the income of producers and their permanence in their activities. Among the products that are supported are:
Coffee
• Support for orchards, all this thanks to technical and administrative training for owners and staff. All this will allow increasing the variety of producers.
• Benefited states: Veracruz, Puebla, Chiapas, Toluca, Guerrero.
• Support for the coffee sector in Tezonapa Veracruz.
• Creation of Shared Value in Numbers: An investment of 898 million pesos in a huge coffee plantation in Toluca, 4000 small producers in the rural sector have been supported and approximately 4 million species have been improved.
Milk (Nestlé, 2012)
• Continuous improvement in milk production processes.
• Among the main achievements in this production sector are: Importation of livestock approximately 2,300 units, 4,300 favored owners, 230 million pesos in investment, support programs, credits and training, increase in productivity in the last decade in 238%.
Environment and water (Nestlé, Environment, 2012)
Supporting the ecosystem is essential, which is why Nestlé, through the creation of shared value, has undertaken the task of carrying out activities in favor of the environment such as:
• Formation of the NEMS system (Nestlé Environmental Management System), which is a project through which the development and advances in the natural environment that are located in the infrastructure of Nestlé and its associates can be inspected.
• Nestlé's main achievements in this area are: Reduction in water waste by 46% in a period of 8 years.
• 39% decrease in energy expenditure in a period of 7 years.
• 75% recycling of surplus resources in production in the last 3 years.
Continual improvement:
• Certification of the type of: Clean industry
• Processing plants in water treatment
• Reforestation at the Santa María Puebla facilities.
• Director and creator of the GEMI and ECOCE projects
Nutrition (Nestlé, Nutrition, 2012)
Nestlé collaborates with society through nutritional support to the most needy sectors and in nutritional training for the preservation of health and formation of habits. Nutritional training activities in educational centers, health centers and communities.
Achievements have also been made in the modifications and variation of products, adapting them to the needs of sectors of the population, such as:
• Manufacture of products reduced in fat, sugar.
• Addition of vitamins and nutrients in the products.
Nestlé has also created a foundation for nutrition, called the Nestlé Fund for Nutrition, of which the following achievements can be highlighted:
• Investment of approximately eighty million pesos in the foundation
• Support for professional study programs in the area of nutrition and obesity
• Talks about nutritional issues
• Preparation of content on the subject of food and nutrition.
Benefited through the creation of shared value
The main beneficiaries in the creation of shared value by Nestlé are:
Each company creates shared value in the sectors in which it operates, taking into account those sectors of society that are part of the external environment of the organization and that impact and influence the performance of its activities and processes.
Why a new way of business: Shared value?
Capitalism, like any other existing economic system, is vulnerable to socioeconomic problems and crises, as in recent years there have been major world crises that have affected many organizations, who have seen their processes and / or activities stopped and in many cases have also had to close many companies as they were unable to recover and solve the critical situations of the markets and globalization.
Every economic system or economy tends to evolve, they have a life cycle and it is for this reason that it is necessary to revitalize the way organizations do business in order to keep companies current. But it is also important to recognize that in the face of the crisis there is the opportunity and possibility of innovation and business development.
Shared value leaves behind the typical way of doing business to give way to what should be a fair business, where everyone wins, from the organization to society, which sees a contribution of the benefits it receives reflected in the company, through of
What is sought is not to do charity, but to contribute and strengthen the social environment so that the economic system and markets are strengthened and in a short or long term there are new forms of business and better business conditions. This makes it possible to eliminate the enormous difference between for-profit and non-profit companies, all this in collaboration with the advantages of shared value by generating income and profits as a result of operations and through the contribution made. to the social environment.
Competitive advantages in relation to the benefit of the social environment
Regardless of the satisfaction of companies in collaborating with the social environment, and of the latter when seeing that the economic system returns to society to a large extent the support and benefits received in the market. As in the case of the Nestlé company that supports the needy sectors, all this directly or indirectly influences the personnel working in the company, since if the latter are supported directly, the organization will have a satisfied staff working without worries or stress. Knowing that the company contributes to the nutrition and health of family members, the worker has no reason to miss work and, on the contrary, if he has reason to improve his performance and increase his productivity.
Shared value vs. Corporate social responsibility (Scribd.com, 2011)
The main difference between shared value and corporate social responsibility is that corporate social responsibility is about support for social causes rarely related to business activities. Regarding shared value, there is a balance between commercial and business tasks that contribute to the growth and sustainability of the joint venture to the activities of contribution to the social environment.
Companies today need to carry out many innovations and changes to remain valid among consumers, globalization currently keeps afloat only companies with sufficient and necessary skills to excel in the market, and in this way position and become a sustainable company.
The image of companies in the face of economic blows in several countries has been clouding, because before society, organizations only watch over their interests and obtain profits no matter what they have to do in their process, from affecting the environment, take advantage of producers and workers, as well as get the maximum advantage over the consumer and customers. For this reason, Professor Michael Porter proposes that organizations give back to the social environment a part of the profits obtained during business activities; all this remuneration of companies for society is achieved through the proposals and tasks that the company allocates for its achievement.
One of the companies that has the most achievements in terms of shared value is Nestlé, as currently it supports primary economic sectors, such as coffee growers and milk producers, that is, its work is basically reflected in rural areas, but it also carries training for educational and health centers on nutritional issues. Unilever is a food and cleaning company that has a project in India, called the shakti project, whose women are important by giving them the opportunity to bring income to their homes, other companies such as Wal-Mart and IBM have greatly reduced part of its costs, thanks to energy savings and the use of resources.
Bibliography
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Nestle. (2012). Rural development. Retrieved on February 19, 2012, from
Nestle. (2012). Environment. Retrieved on February 19, 2012, from
Nestle. (2012). Nestle. Retrieved on February 19, 2012, from
Nestle. (2012). Nutrition. Retrieved on February 19, 2012, from
Scribd.com. (2011). Scribd. Retrieved on February 18, 2012, from
Unilever. (2012). Unilever. Retrieved on February 18, 2012, from
