The Fine Line Between Creating Shared Value and Corporate Social Responsibility

At first, identifying the thin line between CSV and CSR could be tricky, not to mention with their purpose is almost equivalent to each other (the two works in a concern to satisfy the society). Although I am familiar with both terms, I still wouldn’t be too confident to jump into the act of explaining my own description of the dissimilarity between Corporate Social Responsibility and Creating Shared Value. The way I see it those two operations may go hand-in-hand because of their similarity by revolving it around the community—or simply just ‘to do good’.

But as I took a little closer of their definitions, their benefits, even the examples of both actions, now I can officially say that those two are, in fact, very much different. Though both may correspond with each other, and they basically ‘look’ identical at first glance, but it is safe to say that each of them serve an entirely different purpose. But, still, very important for every company to conduct if they want their business to survive.

Now, before we can do a differentiation between Creating Shared Value and Social Corporate Responsibility is only logical if we know what both terms actually are. Creating shared value could be identified as a strategy to develop—or, even reinforce—the company’s future market with also, at the same time, could build up or strengthens the economy of the company, the relationship with the communities/stakeholders, and their marketplace. So basically CSV is a long-term plan for a business in order to maximize their profit and also to satisfy their communities. And how do they do that? This is where CSR comes in.

CSR is a “voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.” Mainly saying that CSR is one of the ways for those companies that undertake CSV for the sake of their business’ future, especially if they operate under socially, environmentally, and economically responsible manner, CSR would be essential for them to undertake.

In order to create value (CSV) you need to do CSR. The main goal of CSR is not actually to gain profit for the business. It is simply to do well towards the community/society with a philanthropic activity. And with that, it supposed to lead onto creating a strong value or bond between those parties involved, or simply, ‘joint value creation for business and society’, which is exactly CSV’s beneficiary. As in for CSR, the benefits would be something along the lines of citizenship, sustainability, and philanthropy.

In simple terms, the one true goal of CSR is to do ‘noble’ things to the society, such as undergoing a friendly environmental activity or just simply doing a volunteer work. It is entirely separate from profit maximization, while CSV is a complete vital part of it. We can see that now if companies are doing some CSR is wouldn’t exactly be beneficial for the society only, in fact, the whole thing is merely a strategy for the company to gain more profit in the future by looking good to the eyes of the communities or their other stakeholders so they would carry on supporting the company to continue their business. Now we may think that it is almost sneaky, but then I guess that’s just how business works.

Reference:

Corporate Social Responsibility. (n.d). Foreign Affairs, Trade and Development Canada. Retrieved October 22, 2014, from http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-rse.aspx?lang=eng

Epstein-Reeves, J. (n.d.). What is 'Creating Shared Value'?. Forbes. Retrieved October 22, 2014, from http://www.forbes.com/sites/csr/2012/06/04/what-is-creating-shared-value/