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Strategy & Society
Chung, Chang Kwon
Twitter @lovelyhaley03
Facebook: Chang21c
The Link Between
Competitive Advantage
And Corporate Social Responsibility
HBR, Dec. 2006 [HBR Spotlight]
Michael E. Porter & Mark R. Kramer
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~!! .
http://j.mp/abtmAx [2]
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[ ] HBR l : 2010 9 16 . 19:30 ~ 21:00
l :
88, 3( 5)
l : 15
l :
CEO MBA Academic Background
l
www.facebook.com/HBRstudy
l : Youtube (10)
(facebook )
^^
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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(2000~)
- (2010~)- (2003~2009)
- (2000~2003)
(1996~2000)
- /
- Project
[ ] (2009)
(as of 2010 )
(MBA, )
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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Michael E. Porteris the Bishop William Lawrence University Professor at Harvard University; he is based at
Harvard Business School in Boston. He is a frequent contributor to HBR, and his most recent article is Seven
Surprises for New CEOs
(October 2004)
Mark R. Kramer([email protected]) is the managing director of FSG Social Impact Advisors,
an international nonprofit consulting firm, and a senior fellow in the CSR Initiative at Harvards John F. Kennedy School of
Government in Cambridge, Massachusetts. Porter and Kramer are the cofounders of both FSG Social Impact Advisors and
the Center for Effective Philanthropy, a nonprofit research organization.
http://www.fsg-impact.org/
1999-2010, FSG, Inc.
Porter, Michael E. and Mark R. Kramer. The Competitive Advantage of Corporate Philanthropy,Harvard Business Review, Vol. 80 Issue 12, Dec. 2002, p56-69
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
http://j.mp/bhaE1l
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Fresh water issue
Bottled water
= 0.0008 % of world water
Inefficiency of agricultural irrigation
= 70%
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
In fact,
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Four Prevailing Justification for CSR
1. Moral Obligation Should Do The Right Thing
2. Sustainability
3. License to Operate Stakeholders view
4. Reputation Customer-oriented view
Environmental and Community Stewardship
Business Society
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
BSR=Business for Social Responsibility
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http://www.wbcsd.org/
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Integrating Business and Society
1. Identifying the points ofintersection.
2. Choosing which social issues to address.
3. Creating a corporate social agenda.
4. Integrating inside-out and outside-inpractice.
5. Creating a Social dimension to the value
proposition.
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1. Identifying the points ofintersection.
Company Society
(Value Chain)
(Diamond Model)
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2. Choosing which social issues to address.
The essential test that should guide CSR is not whether a cause is worthybut whether it presents an opportunity to create share value.
Generic Social Issues
~
Value Chain Social Impacts
()
Social Dimensions of competitive context
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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Supporting a dance company
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Generic Issue Competitive context
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Generic Issue Value Chain Impact
(-)
Value Chain
Competitive context
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AIDS pandemic in Africa
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Generic Issue Value Chain Impact Competitive
context
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3. Creating a corporate social agenda.
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Corporate Involvement in Society:A Strategic Approach
Generic social ImpactsValue chain SocialImpacts
Social Dimensions ofCompetitive Context
Good citizenship Mitigate harm from
value chain activities
Strategic philanthropy
that leveragecapabilities to improvesalient areas ofcompetitive context
Responsive CSR
Transform value chainactivities to benefit
society while reinforcingstrategy
Strategy CSR
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
School Adopting Program
Underperforming public high school
5yrs, $250,000~$1m. + in-kind donation Employees take active role in school
Increase in graduate rate to double
But, inherently limited
Good citizenship(responsive)
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Tens of thousands of products
To prevent risk before social pressure But, advantage is temporary.
Mitigating harm(responsive)
Analyzing product
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
For disadvantaged buyers
Flexible mortgage payments program
Transforming value chain(strategic)
Building housing
Frances largest bank
Environmental package
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
$50 m., 5yrs Employee volunteers of skilled IT knowledge
Community-Microsoft win-win program
Strategic CSR
+
450,000 unfilled IT position 11.6 m. enrolled student
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4. Integrating inside-out and outside-in
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
180 h. paid class
Local community
Retention: 65%
Milk District in Moga
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
No public utility
Poorly irrigated and
infertile soil
60% death rate of
new born calves
Poor infrastructure
Nestles Milk District in Moga
Moga Nestle Refrigerating truck
Dispatching experts
Monthly training sessions
Financing and technical
assistance
Supplier: 180 farmers 75,000 farmers
50 ,
Moga
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
5. Social dimension into the value proposition.
Core Values
1.Selling the highest quality natural andorganic products available
2. Satisfying and delighting our customers3. Supporting team member happiness and excellence4. Creating wealth through profits & growth5. Caring about our communities & our environment
6. Creating ongoing win-win partnerships with our suppliers7. Promoting the health of our stakeholders through healthy eating
education
Fortune 500
() Credit
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Ecomagination
Focusing on poorest populations
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Inside-Out
Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Outside-In
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Porter, Michael E., Mark R. Kramer. Strategy and Society: The Link Between Competitive Advantage and Corporate SocialResponsibility, Harvard Business Review, Dec2006, Vol. 84 Issue 12, p78-92
Strategy is always about making choices, and success inCSR is no different. It is about choosing which social issues
to focus on.
1. CSR will become increasingly important tocompetitive success.
2. Corporations are not responsible for all theworlds problems, nor do they have theresources to solve them all.
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by
1.
.
Microsoft 2 , 2.
C.K. Prahalad
2/3 3. BOP
, ..4.
() ( )
5.
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BOP, Bottom of Pyramid
Harvard Business Review; Sep2002
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BOP, Bottom of Pyramid Long tail
Cocreating Business's New Social Compact. Harvard Business Review; Feb2007
WHY SUSTAINABILITY IS NOW THE KEY DRIVER OF INNOVATION Harvard Business Review; Sep2009
- 3 - 5- 1,500 - 15
- 1,500 - 40
700L, 2Euro
Long tail - Advantage- - IT -