Early corporate citizenship initiatives were often directed at supporting community causes ranging from charitable organizations to cultural institutions like municipal symphonies and operas. Companies have been historically helpful in developing the cultural infrastructure of many communities. Whether these corporate philanthropy efforts were beneficial to the company or only to selected individuals is very subjective. However, many of these early efforts were not scrutinized for their contribution to the strategic objectives of the firm. Michael E. Porter and Mark R. Kramer have argued that a company needs to choose its social initiatives strategically. They have advanced the concept of shared value, which they define as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic programs.”
Porter and Kramer identify three approaches that apply to international marketers:
(1) delivering attractive products that are truly beneficial to society; (2) removing problems in the supply chain that are both costly and socially detrimental, such as reducing. greenhouse gasses; and (3) enabling local cluster development to help communities become more competitive.
They argue that “we need a more sophisticated form of capitalism, one imbued with a social purpose. But that purpose should arise not out of charity but out of a deeper understanding of competition and economic value creation.” The best international marketers are driven by the desire to create value and improve their competitive positions, so shared value becomes the right and smart thing to do.
