v1n6: Hartman and Werhane on Porter and Kramer

“Proposition: Shared Value as an Incomplete Mental Model” by Laura P Hartman and Patricia H Werhane

A COMMENT ON Michael Porter and Mark Kramer (2011), “Creating Shared Value,” Harv Bus Rev 89(1/2): 62–77.

Abstract: Much of the attention of ethics scholars has focused on balancing self interest with the interests of others, equating self-interest with profit, or at least its acquisition, and presenting a dilemma to both companies and the stakeholder groups that socially responsible business practices might serve. We are in significant agreement with Porter and Kramer’s silver bullet to correct decision making based solely on increasing profit: the creation of “shared value.” However, we suggest three significant points of deviation from this thesis, resulting from our discomfort with features of the mental model(s) that Porter and Kramer use to structure their argument.

To download the full PDF, click here: Hartman and Werhane on Porter and Kramer.

9 Comments on “v1n6: Hartman and Werhane on Porter and Kramer”

  1. A welcome critique but it would have been good to be more explicit about what other models might work better. The reader is left with precious little alternative conceptual framing beyond an open-ended invitation toward greater moral imagination.

  2. Thank you, Prof. Friedland, for your interest in alternative models. Both Dr. Werhane and I would have welcomed the opportunity to have included an expansive and descriptive discussion on these other models. However, the BEJR’s innovative format did not permit even one more character to be uttered or we really would have pushed their space limit ;o)

    Quite a few of our esteemed colleagues have offered examples, and I would encourage them and others to offer their “favorites” here! May I suggest that you consider some of our (my and Dr. Werhane’s) other work together? Cases discussed in our book, “The Global Corporation: Sustainable, Effective and Ethical Practices,” are specifically oriented precisely toward illustrating moral imagination in practice. Specific cases like, “Transformational Gaming” demonstrate profitable partnerships / social strategy at play: http://www.caseplace.org/d.asp?d=6649, along with BHP Billiton and Mozal, Case Study No. UVA-E-0316 and Started as Crew: McDonald’s Strategy for Corporate Success and Poverty Reduction, Case Study No. UVA-E-0310. Finally, we have a forthcoming article in JBE, “Building Partnerships to Create Social and Economic Value at the Base of the Global Development Pyramid.” Message me and I can send to you a copy.

    Again, these are just a few published items that contain examples, off the top of my mind. I would encourage colleagues to post here other examples and we could build a compendium of examples to share on this subject.

    Warm gratitude for your comments.
    Laura Hartman, 3.6.13

  3. Jack Haffey says:

    I have looked for articles that comment on the Porter-Kramer CSV concept. I found yours and like it. I think they are directionally correct, but even with that and knowing the well earned reputation of Professor Porter and the high regard, too, for Mark Kramer, I believe they are falling short of the truly achievable ultimate value paradigm that exists.

    I invite you to (1) glance through our website and (2) read especially our most recent (and rather long) post at http://www.jackhaffey.blogspot.com to consider a tangible, actionable paradigm that is in fact transformational and practical. It might appear to let the perfect be the enemy of the good, but that is an unfortunate easy out.

    I hope you read it and comment.

    Best wishes. Jack Haffey.

  4. Melinda Brain says:

    I have been fascinated by Porter & Kramer’s creating shared value concept for some time now and for the main, been a strong supporter in his theory. I have been disappointed with CSR approaches that are visual in Australian firms, which often fall flat and with a dash of transparency, appear to be just another PR exercise by a large scale organisation with no real moral agenda.

    I was interested to read about Cemex and look forward to understanding their initiatives further. Being a Blogger, learning is something I do continuously.

    I like the approach of a “moral imagination” and it would be nice to see this explored further.

    Given we are on an “ethics” platform, I thought it timely to point out Porter and Kramer’s use of referencing in the article, such as Wikipedia, Harvard Business Review articles and the Rainforest Alliance website? Academic theories must be shared with business, but one should not take without giving back. Did Porter & Kramer take? Well, I’m not saying that, however it would have been nice to see him reference academically!!!

    • Melinda, thanks for your comment. The most general complaint about P&K (the one I hear from scholars in the field) is that they’re simply not saying anything new or interesting. The idea that both parties to a transaction have to benefit is just a very old basic fact about commerce. You don’t get transactions without consent, and people won’t consent to transactions that don’t benefit them. So, yes, all business needs to create value that gets shared. But that leaves some very, very important questions open, including (crucially) HOW is the value going to be shared — that is, how will it be divided? If I get 99% of the value and you get 1%, we’re sharing value, but sharing it in a way that you won’t like much, and that observers may find unjust.

      • Melinda Brain says:

        Thanks Chris for raising a valid argument in the meaning of sharing and the win-win in transactions

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