How is Creating Shared Value (CSV) different from
Corporate Social Responsibility (CSR)?
As of now, the main mode of thinking of most managers when relating businesses to societal ills is corporate social responsibility. In fact, when discussing corporate sustainability and creating shared value, there is still a misconception that CS and CSV is a CSR concept. Frankly, it is not. Here are the salient differences between CSV and CSR:
CSR:
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Dole-out programs, incurs costs on the company
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Response to external pressure, for publicity
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Usually not related to a firm’s competitive advantage
CSV:
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Integral to profit maximization
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Joint value creation between the community and the company
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Health of community and growth of company is mutually dependent
An image of creating shared value is akin to marriage. Depending on your outlook on love, what marriage aims to do is for the two entities to help each other grow. Creating shared value is not a mexican standoff which looks at social initiatives as costs, not an avenue for growth and profits.
The best question to ask in gauging whether an initiative is CSR or CSV is: If you take out the societal initiative, how would it affect the profit generation of the company? If it adversely affected the profits, then it is a CSV initiative. If it positively generated more profits, then it is a CSR.