The Ecosystem of Shared Value

This article discusses The Ecosystem of Shared Value.

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Case Analysis: The Ecosystem of Shared Value

The Ecosystem of Shared Value

Social progress and business are both agents of social change. The impacts of businesses worldwide present subtle opportunities for companies to alleviate poverty, pollution, and diseases among populations from different countries, notwithstanding existing disparities. According to some researchers, some companies benefit at the expense of communities as they do not significantly contribute to societal progress (Kramer & Pfitzer, 2016). Currently, the world faces numerous challenges ranging from climate change to income inequality. Ecosystems shape companies; market environments can work to enhance or curtail the productivity of suppliers and distributors. Moreover, government policies and cultural norms are beyond the control of a company’s management hence conform to their ecosystems. Therefore, companies should collaborate with industry players directly and indirectly influenced by parent company operations to ensure an expected gain.

Shared value strategies are definitive of company goals and insights. Although governments, NGOs, companies, and community members do not often work in uniform alignment with each other, they contribute significantly to societal change (Kramer, & Pfitzer, 2016). Nevertheless, working together based on shared value strategies presents potential to influence ecosystems and catalyze change. The ideology based on collective impact reiterates the need for collaborations in the social sector where the potential for economic opportunities and social progress exists.

The collective impact operates based on the ideology that collaboration is critical for players from different sectors. Collective impact efforts acknowledge that each player from business to government agencies, charitable organizations and afflicted populations view a specific problem from their perspective. Rigorous data collection and careful facilitation guides decision-making efforts on divergent views presented by collaborating parties. However, for businesses deeply rooted in societal problems, their growth and resilience explain subsequent societal change influence. This is conventional wisdom. Community members believed that governments and NGOs spur societal change wholly, which is not the case as governments only respond to specific interests (Kramer, & Pfitzer, 2016). On the other hand, NGOs hardly have adequate resources and influence to attract attention that can be converted to meaningful engagement between governments and global corporations.

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To achieve large-scale social change, collective impact effort should constitute a common agenda, a shared measurement system, mutually reinforcing activities, constant communication, and dedicated support from multiple organizations. Businesses must align their efforts and clearly define data sharing mechanisms between involved parties; this will take into consideration divergent and conflicting perspectives. A shared measurement system between businesses allows for formalizing agendas, demonstrating what works and does not work, and initiating platform for course adjustments (Kramer, & Pfitzer, 2016). Regularly communicating means communications between businesses must be frequent and structured. This can be intertwined by mutually reinforcing activities that often differ depending on a working group.

Despite businesses exhibiting compelling incentives and capacity to inform large-scale social change, some hardly engage in collaborative initiatives. This can be attributed to relative questions of legitimacy, competitive free riders, and investment justification (Kramer, & Pfitzer, 2016). Even though companies pursue profits individually, societal change should be approached differently. This can be done by these entities acknowledging that long-term productivity is attributed to a health society despite not being at the forefront to initiate social progress. Business environments are dynamic. When a company elevates market conditions, competitors also benefit immensely from a free ride opportunity. Competitors provide a highly contested platform for resource and profits, but in rare cases, we find companies ready to incur costs with subsequent returns shared among them and their competitors. Therefore, it is imperative to embrace social change and corporate leadership to meet shareholder growth expectations whilst finding solutions for urgent social failures.

Reference

Kramer, M. R., & Pfitzer, M. W. (2016). The ecosystem of shared value. Harvard Business Review, 94(10), 80-89.

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