No Shortcuts: Achieving Shared Value Means Changing Your Business Culture

Abstract

A growing number of companies declare, e.g., in annual reports, on company websites or in strategy documents, that they subscribe to what Michael Porter and Mark Kramer have labeled ‘strategic CSR’ (2006) or ‘shared value’ (2011). Shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges. We agree that the pursuit of shared value is essential in today’s business environment, but argue that Porter and Kramer understate the need for significant changes in management practices to achieve it. We address some limitations of the concept of shared value and conclude that these strategies need to be managed within the core business model and underpinned by a supportive and strong organizational culture and values. We provide evidence by comparing organizational cultures and corporate values in Novo Nordisk, Merck, BP and Statoil. We find that these companies have different organizational cultures with implications for the ability of companies to achieve shared value. We conclude by proposing seven key elements of building and managing a responsible organizational culture.