Creating Shared Value by Michael E. Porter and Mark R. Kramer - Book Report/Review Example

The authors have explained the meaning of ‘shared value’ as the concept of promoting social and economic conditions of the society in which a particular business is operating, apart from following the policies that increase the competitiveness of the concerned company. Authors have stressed the need for the companies to treat value creation as an issue that has equal importance, when looking at the perspective of revenues and profits earned. Similarly, social organizations have been looking at success through the viewpoint of benefits achieved or money involved.

However, the governmental agencies and NGOs need to think in terms of value, as this will help their participation in business ventures. In addition, the companies have devised methods to beat competition, which include relocating to lower cost areas, restructuring and reducing human resources. According to authors of this article, these measures might have helped meeting the demands of stakeholders, while increasing the earnings. However, these decisions are not sustainable, as they do not tackle the problems of unemployment or the increasing stress on local community services.

Explaining the importance of strategic theory application in business, the authors believe that configuration of a proper value chain is necessary. This chain must comprise of the activities that are involved in the business operations from manufacturing to marketing and earning the revenue. (Porter & Kramer, nd)  . Explaining the importance of strategic theory application in business, the authors believe that configuration of a proper value chain is necessary. This chain must comprise of the activities that are involved in the business operations from manufacturing to marketing and earning the revenue.

Needs of the society must be considered while operating such value chain. (Porter & Kramer, nd) Creation of shared value Redefining product in the proposed value chain along with redesigning the markets for products or services can help in creating shared value. However, the major factor for creating shared value is the need to build ancillaries and supportive industrial units at the company’s parent location. As the repercussions of these measures can have their impact on many other areas, the value improvement in a particular area can provide similar opportunities for value creation in other areas.

Authors opine that capitalism can be reinforced by the principles of such shared value, as they relate the success of businesses to the prosperity of society, while companies have opportunities to gain efficiency and expand areas of operation. The concepts of shared value creation are applicable to businesses in developed as well as developing countries. Connecting company operations with social values Authors have related the company productivity to factors like employee safety, worker health and skills, among other things.

While productivity benefits of a company can increase by attending to concerns of society, the authors argue that the result of any investment in social wellness programs is enormous, as the same can improve production with increasing employee presence. The worker’s family health and