Creating Shared Value - Essay Example

Law Summary: Creating Shared Value Introduction The article begins by explain that capitalist system is under siege, which has been considers as a cause of numerous issues such as social, environmental and economic problems, while companies are considered to be prospering at the expense of members of the community (Porter and Kramer, 4). Moreover, capitalism can be perceived as an unparalleled means for satisfying human needs, enhancing efficiency, generating wealth and employment. However, it has also hindered the process of harnessing the potentiality of a business in order to meet the challenges in the society.

The concept of shared values focuses on the societal needs and not only the conventional economic needs, but the societal needs harms and weaknesses that create the costs for the firm through the energy wasted, accidents, and raw materials.Therefore, shared value does not emphasize on personal values or sharing the values that are developed by the firm or a redistribution approach, though it is an expansion of the entire field of economic and social value. On the other hand, roots of the shared values requires that the competitiveness of a company to and the community health to be closely interrelated.

Therefore, there is a need for a successful community, which does not entail the creation of demand, but provision of critical public assets. The article explains that share value can be created through establishment of economic and societal value. In fact, the process of creating share value involves three distinct ways. These efforts involve preconceiving products and markets, redefinition of efficiency in the value chain and establishing accommodating industry at the location of companies.

In fact, the concept of shared value applies in resetting the boundaries of capitalism, through a connection of companies’ effort to improve the society, and developing the ways for serving their needs and markets.The article covers the roles of the entrepreneurs since their venture are not considered the only way of seeking a profitable remedy to problems in the society. Therefore, entrepreneurs have the responsibility of introducing new products that are meeting the societal needs through business models.

However, there are implications of creating shared values to the government since its principles are focusing on separation that exists between the business responsibilities and government or civil society. An organization that understands the significance of productivity and creation of value can have substantial implication to the government.ConclusionIn conclusion, the article covers the next evolution of capitalism, whereby shared value is considered to a way of initiating the process of business innovation and growth.

Moreover, shared value is considered a way of integrating the success of the company and the management approaches, short-term perception that can worsen the divide among the institutions in the community. The article concludes by indicating that the not all societal problems can be solved by shared value, though it can offer a company chances for applying their skills, resources and capability of management to solve some of the problems in the society. Therefore, during the course of solving societal problems businesses are respected by the society.

Works CitedPorter Michael and Kramer Mark. “The Big Idea: Creating Shared Value”. Harvard Business Review. February 2011: 4-17.