A practitioner's reflections on the problems of shared value

After our article on shared value came out in the California Management Review, and we published our last blog piece summarizing our critique, we've had a lot of response from various academics and practitioners in the corporate responsibility field. In fact, we've probably had more emails, comments and calls on this one article than we've had on anything else we've ever published. It has clearly struck a nerve. In the main, these responses have been very positive, suggesting that a lot of people have just been waiting for an article like this to come out. Here's just a smattering of some of the responses we've received (you can also read the comments to our blog post for more):

"This is a long over due excellent and comprehensive critique on the overly optimistic and shallow CSV framework that doesn't really address the real trade offs required to get to sustainable development."

"Good on you for re-framing this topic in a manner that more fully reflects the spirit of corporate social responsibility."

"It is some of the most enjoyable reading I have done in a very long time."

"Just read you CMR paper on CSV - well done. It is about time that someone took this idea apart."

Of course, many commentators, even whilst being supportive of our critique, have also pointed out some of the pragmatic benefits of Porter and Kramer's approach, like this one:

"I can see how the win-win wonderland (in Mintzberg's words) could be a diversion, but I wonder how it might crack existing inertias, and/or if any positive momentum could be leveraged for fashioning a more complete framework."

Such considerations of the lifeworld of business is a theme that is addressed in the discussion we have with Porter and Kramer at the end of our article, but is not something that we fully elaborate on. With this in mind, we thought it worthwhile to post here one of the more thoughtful and extended responses we received from a corporate responsibility practitioner. This is from Rory Sullivan, a veteran of the responsible investment community, now working as an independent advisor as well as being a Senior Research Fellow at the University of Leeds. He explores some of our points with regard to how CSR and CSV might be seen from a practitioner perspective. We thought they deserved reproducing here as they help to frame an important element of the debate in a constructive way:

"A proper analysis of the concept and value of ‘Creating Shared Value’ has been needed for some time, and your article does an excellent job of setting out the strengths and weaknesses of CSV. I was disappointed that Porter and Kramer failed to engage with the substantive points that you raised; their bludgeon of a response seemed at odds with the nuanced and careful arguments you presented in your article. While I support the broad lines of argument and analysis in your article, I would like to offer some reflections from a practitioner’s perspective:

• Your discussion of “CSR as a Straw Man” is fair in its treatment of the academic literature (which has argued that CSR should be a corporate strategic priority). However, CSR in practice is quite different. In far too many companies, CSR continues to have limited business relevance (in terms of its influence on strategy or capital allocation) and remains far closer to philanthropy than the theoretical literature suggests (or would like).
• On the originality of CSV: Your review of the literature ignored the many important practitioner contributions (e.g. by John Elkington, Stuart Hart, CK Prahalad) which have influenced CSR in practice. I suspect that many practitioners see CSV as a glossy reformulation of ideas such as the triple bottom line, rather than as a new framing of the debates around the role of business in society.
• On the evidence for CSV: One of the key challenges faced by companies in practice is that ideas that work at a local level and at a small scale, may or may not work [in fact, they often don’t] when they are scaled up to the corporate level or when other companies try to replicate the experience. There are various reasons – the generalizability of approaches, the transaction costs, etc of moving to scale, the problems of taking projects and processes from one corporate culture and trying to implement them in another.
• I’m not convinced by your argument that CSV is based on a shallow conception of the corporation in society. My (personal) reading of the Porter and Kramer article was that it was best understood as an analysis of the corporation in society, where the corporation is taken as the central unit of analysis (perhaps akin to every western individual being at the centre of their own personal narrative). In that frame of reference (which, I accept may not be what they had in mind), the concept of CSV could be interpreted as simply an argument that there are things that companies can do to make them a little more useful to (or a little less harmful) to society."

Plenty of food for thought there. Any more practitioners out there want to throw their two cents in?

Photo by Ross. Reproduced under Creative Commons licence

Corporate responsibility infographics - the good, the bad and the ugly

Data visualization, or the creation of "infographics", has been gradually seeping into the corporate responsibility world. And its no surprise. When their designers get it right, infographics can tell you an important story in a wonderfully accessible way using cool, hard facts. But when they get it wrong, it's just, well..... a mess. Too much data and it is confusing; too little and it risks being banal. And using the wrong data can simply discredit the whole enterprise from the beginning.

So what does a good corporate responsibility infographic actually look like then? We've been taking a good look at the craze for infographics, and picked out some of the best and the worst that relate to corporate responsibility issues. There are more and more appearing every day, so we're not claiming to provide anything like an exhaustive review, but here are a few examples that we think give a good flavor of the potential and pitfalls of turning business ethics into pictures. And if you don't agree with us, then please tell us why in the comments field ..... or better still, create an infographic to explain it all!

The Good

There has been a few corporate taxation infographics doing the rounds in the last couple of months. What we like about this one from onlinemba.com though is the funky design (you've gotta love that faux factory styling), the solid citations, and the clear storyline. Yes, it takes a fairly hardline anti-business stance, but it doesn't pretend the answers are obvious or simple.



Another powerful infographic is this one detailing the role that pharmaceutical companies play in influencing doctors to prescribe their medicines. We like it because although it is a little on the long side (click on the image for the full image) it tackles an important question; it is controversial without being sensationalist (again, the referencing is pretty tight), the design is smart, and it rounds out the story with advice on what you can do to make a difference. Let's call it activism meets journalism.

Of course, infographics can be a lot more than just simply static visuals. And they don't have to be critical of business! Videos, animations, music and all kinds of possibilities are out there to tell corporate responsibility stories in interesting ways. We like this one from Fortune and CNN because it offers some nice simple interactivity about something all of us care about - what makes some places better to work in than others. Based on Fortune's annual 'Best companies to work for' survey, it not only shows which companies score well, but also lets you search the kinds of words that employees use to describe their companies - the top ones being "people", "time", "family" and benefit". But some of the cross-company comparisons are really interesting. Whilst top spot holder SAS includes words like "care", "life" and "health", Goldman Sacks at 23 emphasizes words like "best", "firm", "people" and "individual". Just goes to show that what makes a firm good to work for is very much in the eye of the beholder.

The Bad


Corporate tax dodging again. But this time the infographic is less successful. Sure it has an easy to understand message, but it doesn't have the richness of data to be authoritative. For a start it doesn't cite its sources, which immediately threatens some of its credibility. Second, it doesn't look to explain any of the facts it presents, but instead relies on some slightly shonky political posturing. Good infographics should make you feel like you've read an informed newspaper article. This comes across more like a bumper sticker.


Source: US Uncut - No Cuts Until Corporate Tax Cheats Pay Up!


The Ugly


Sometimes, not even well researched corporate responsibility infographics hit the mark. Getting the balance right between telling a clear story and getting the facts on the table can be tricky. We wanted to love this incredibly informative infographic about the BP oil spill from 2010 by Carol Zuber-Mallison but frankly it just doesn't cut it like it should. It's simply too crammed with data. Sure, it tries to describe a complex situation of corporate responsibility, but if infographics are going to be successful they've got to render that complexity easily understandable in a single narrative. This tries to cover too much. Plus, given all the data, the referencing could be better. How else is anyone supposed to check the facts? So although this is an impressive effort in many respects - especially the crazily ambitious attempt to update it in real time - it's ultimately an infographic fail. Too much info, not enough graphic.

Business ethics more culturally significant than CSR ... but not everywhere

'Business ethics' and "corporate social responsibility" are two terms that are often used interchangeably, but at the same time represent somewhat different lenses on business practice. Ethics, of course, is always concerned with norms and values, and is basically about what is right and wrong. CSR on the other hand may be about these things, but doesn't have to be - lots of people take a purely economic or strategic approach to CSR without any real consideration of the normative dimensions. CSR is also, as might be expected, a lot more business-friendly than business ethics. In fact, people often tend to use CSR when they're talking about the good things companies are doing, and business ethics (or a lack of them) when talking about the bad things they do. There are other differences too, but we'll save the definitional niceties for another day.

The point is that the term you use is not always just arbitrary. And the two have a very different heritage even if they have broadly similar concerns. As a professor of business ethics (Crane) and a professor of corporate social responsibility (Matten), and co-authors of textbooks on both subjects, we often get asked which is the most important, which is the most popular subject at university, and why we do we need more than one term to describe the same thing? So we were pleased to discover the new gizmo from Google that lets you easily and quickly do a simple analysis of the cultural significance of different words and phrases. The Ngram viewer from Google Labs plots the incidence of specific terms over the last 200 years in more than 5 million digitally scanned fiction and non-fiction books. It may not let you do anything very sophisticated from a research point of view, but it is incredibly easy and fun to use.

So we plugged "business ethics", "corporate social responsibility" in, and for good measure added "corporate responsibility" and "sustainable business". The results, shown above, relate to books published in English from 1900 to 2008 (the last year provided by the data). As you can see, CSR only really emerged post 1960, whilst business ethics has enjoyed more than a century of cultural dominance, with particular peaks around the crash and depression of 1929-1930, and the financial scandals of 2000. And CR was actually a preferred term to CSR in books until around 2001.

By the looks of things, the dominance of business ethics could be coming to an end though. CSR and corporate responsibility have become increasingly more used - especially in the last decade which has seen an exponential growth in their incidence. Saying that, we'll see if the most recent financial scandals see another resurgence of business ethics post 2008 as the last data points on the graphs might seem to suggest.

An interesting feature of the tool is that you can distinguish between books published in English in the US and books published in English in the UK (as well as books published in non-English languages). And here, we were intrigued to see that in UK publications, CSR has already overtaken business ethics as you can see in the graph below.

In fact, in UK books, business ethics in general has not achieved anything like the cultural significance it appeared to in the first graph. Until the early1980s corporate responsibility was actually the dominant term.

Looking then to US books (see below), we can see that it is here that business ethics particularly stands out - albeit with a mid 1970s blip when corporate responsibility overtook it. Even as late as 2008, business ethics still dominates by quite a gap, although this is clearly narrowing over time.

The US emphasis on individual ethics versus the European focus on system-level responsibilities is something we've discussed at some length in our Business Ethics textbook. Plus the UK has been very much at the vanguard of the CSR movement. So these graphs don't come as a complete surprise. Still, it's interesting to see the data set out so starkly. That said, there are clearly some limitations to the Ngram methodology, as has been widely discussed. Still, there is clearly food for thought in here. And, of course, we're sure there are a whole lot of other corporate responsibility analyses that can be conducted with the tool. Do let us know of any interesting ones you come across.