Does the concept of “creating shared value” make sense for multinational firms?

Abstract

Purpose The paper aims to explore how Porter and Kramer’s “Creating shared value” (CSV) framework supports the multinational corporation’s business model to turn social problems into business opportunities in two contextually different international markets. Design/methodology/approach Conceptually, the paper uses the CSV framework to argue that evaluation of business models in different societal contexts (geographically, culturally and economically) might be able to shed more light on the firm-societal needs. Empirically, the paper conducts a comparative content analysis of the business models of an international brand of a three-wheeler vehicle – Piaggio Ape – in Italy and India since its launch right after World War II. The content for qualitative analysis was identified using the Nexis Uni database. Findings Findings reveal that CSV outlines the strategy for firms to integrate societal concerns uniquely into their business models, rather than solving them in isolation. However, the business model performances resulting from these firm–society linkages may vary in an emerging market and a developed market. Regulatory fit is yet another factor that decides how well CSV could be applied. Research limitations/implications Given CSV’s contradictory perception in corporate governance literature, the study empirically establishes its theoretical value in explaining the actions and success of strategic decisions that large multinational firms take. The interactions between the underlying attributes of four CSV strategies, the regulatory fit and business model success are articulated in the form of propositions and an integrated CSV framework. Given the paper’s two-case comparative analysis, the generalizability of the identified attributes of the four CSV strategies is limited and therefore calls for future research using larger samples of firms practicing shared value perspectives. Practical implications Corporate and international business managers can use the study findings and the proposed framework to comprehend scenarios beyond business systems and to apply CSV as a tool to address market needs in concurrence with addressing environmental and societal concerns. Originality/value The paper is one of the initial attempts to evaluate and extend the “CSV” perspective in the international business context and, thus, promises a broad future research scope.