Common Conception of Capitalism - Case Study Example

Shared value creation focuses on identifying and expanding the connection between societal and economic progress” (Kramer and Porter 6). This novel concept prioritizes removing the distinction between the categorization of businesses for profit from those which are essential for benevolent purposes. This posits that for a company to have a competitive edge, it does not mean that it should lose grasp of social issues that prevail within the community. Rather than having substantial social functions as a distinct aspect of a corporation, shared value envisions a business enterprise that is founded upon it. The company’s productivity has a direct connection with social issues which affects effectiveness. This mandates a need to invest in factors that have the strongest link to company productivity that include: environmental impact, supplier access and viability, employee skills, worker safety, employee health, water use, and energy (Kramer and Porter 8).

This is differentiated from corporate social responsibility (CSR) since CSV is not merely a reactionary measure of a corporation that is optional on its part. The CSR functions of a business is usually an adjunct of the business which exists separate from its corporate goals and implemented as a manner of goodwill to improve its reputation. On the other hand, CSV is founded on its own economic worth wherein social value is inherently a part of it. This is a direct deviation from capitalism where big business is equivalent to big profit. In this regard, it is not uncommon to describe the characteristic of a dog-eat-dog scenario in the name of profit to the prejudice of social and environmental concerns.  The article dubs this as the new standard that veers away from capitalism which has acquired a notion of distrust.

What Kramer and Porter propose is an innovative change that will ultimately redefine business.