Why Creates Shared Value?
**youthopia.or.id
Creating shared value is an approach to corporate social responsibility (also called CSR) based on the idea that corporate success and social welfare are interdependent. A business needs a healthy, educated workforce, sustainable resources and adept government to compete effectively. For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and opportunities for philanthropy.
CSV received global attention in the Harvard Business Review article Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility by Michael E. Porter, a leading authority on competitive strategy and head of the Institute for Strategy and Competitiveness at Harvard Business School; and Mark R. Kramer, Senior Fellow at the Kennedy School at Harvard University and co-founder of FSG Social Impact Advisors. The article provides insights and relevant examples of companies that have developed deep linkages between their business strategies and corporate social responsibility.
As a basis for responsible operations and business success over the long term, a company must manage its operations in a manner to comply with the highest standards of business practice and environmental sustainability.
This involves compliance with national laws and relevant conventions, as well as the company inert regulations, instead of just fulfilling their legal obligations. It needs to be laid out in Corporate Business principles and related policy document and their application is verified through programs and internal/external Corporate Group Auditors.
Beyond that, the way a corporation does business should always be based on a concept of sustainability which ensures that their activities could preserve the environment for future generations. In line with the Brundtland Commission’s definition, sustainable development to us means “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
However, we believe that to build a profitable business for shareholders a company must go beyond compliance and sustainability to a third level which is creating long-term value both for society and for their shareholders. This is what we meant by creating Shared Value:
- using the company’s core business strategies and operations to create value for shareholders;
- serving consumers and the public by offering them products or services that are both satisfying and contribute to their demands and wellbeing;
- Seeking to improve the economic and social conditions for people and communities across their entire value chain; for examples: for supplier who supply them with raw ingredients, for communities where their business tiers are located or being competed, for loyal and potential customers of their product and for trade partners which conduct business with them.
Sustainability
Sustainability is the capacity of an ecosystem to endure. In ecology, the word describes how biological systems remain diverse and productive over time. Long-lived and healthy wetlands and forests are examples of sustainable biological systems. For humans, sustainability is the potential for long-term maintenance of wellbeing, which has environmental, economic, and social dimensions.
Sustainability interfaces with economics through the social and ecological consequences of economic activity. Sustainability economics involves ecological economics where social, cultural, health-related and monetary/financial aspects are integrated. Moving towards sustainability is also a social challenge that entails international and national law, urban planning and transport, local and individual lifestyles and ethical consumerism. Ways of living more sustainably can take many forms from reorganizing living conditions (e.g., Eco-villages, eco-municipalities and sustainable cities), reappraising economic sectors (permaculture, green building, sustainable agriculture), or work practices (sustainable architecture), using science to develop new technologies (green technologies, renewable energy), to adjustments in individual lifestyles that conserve natural resources.
A real world example on CSV
When Toyota introduced the Prius, its hybrid electric/gasoline automobile, Toyota gained a competitive advantage by marketing the new vehicle’s environmental and economic benefits. Urbi, a Mexican construction company, expanded the housing market through novel financing vehicles that made mortgages affordable to low wage workers. Whole Foods Market has become a category leader in the supermarket segment by offering organic and natural foods to environmentally conscious consumers; using sustainable and eco-sensitive operating philosophies that other specialty grocers and ordinary supermarkets have not matched.
Companies can also improve the competitive context in which they operate by investing in their communities. Nestlé, for example, worked closely with the farmers of the Moga Milk District in India, investing in local infrastructure and transferring world-class technology to build a competitive milk supply chain that simultaneously generated social benefits through improved health care, better education, and economic development.
The concept of shared value blurs the line between for-profit and nonprofit organizations. New kinds of hybrid enterprises are rapidly appearing. For example, WaterHealth International, a fast-growing for profit, uses innovative water purification techniques to distribute clean water at minimal cost to more than one million people in rural India, Ghana, and the Philippines. Its investors include not only the socially focused Acumen Fund and the International Finance Corporation of the World Bank but also Dow Chemical’s venture fund.
Revolution Foods, a four-year-old venture-capital-backed U.S. start-up, provides 60,000 fresh, healthful, and nutritious meals to students daily—and does so at a higher gross margin than traditional competitors. Waste Concern, a hybrid profit/nonprofit enterprise started in Bangladesh 15 years ago, has built the capacity to convert 700 tons of trash, and collected daily from neighborhood slums, into organic fertilizer, thereby increasing crop yields and reducing CO2 emissions. Seeded with capital from the Lions Club and the United Nations Development Programme, the company improves health conditions while earning a substantial gross margin through fertilizer sales and carbon credits. The blurring of the boundary between successful for-profits and nonprofits is one of the strong signs that creating shared value is possible.
Similar opportunities wait in nontraditional communities in advanced countries. We have learned, for example, that poor urban areas are America’s most underserved market; their substantial concentrated purchasing power has often been overlooked are helping the poor save money securely and transforming the ability of small farmers to produce and market their crops.
In Kenya, Vodafone’s M-PESA mobile banking service signed up 10 million customers in three years; the funds it handles now represent 11% of that country’s GDP. In India, Thomson Reuters has developed a promising monthly service for farmers who earn an average of $2,000 a year. For a fee of $5 a quarter, it provides weather and crop pricing information and agricultural advice. The service reaches an estimated 2 million farmers, and early research indicates that it has helped increase the incomes of more than 60% of them—in some cases even tripling incomes. As capitalism begins to work in poorer communities, new opportunities for economic development and social progress increase exponentially.
In conclusion, CSV encourages each company to create economic and social value simultaneously by focusing on the social issues that each is uniquely capable of addressing.
Youthopia’s Platform for creating shared value
We are a non-political, nonprofit event based community project coordination body subsidiary of IKA-ITS Jakarta Raya that facilitates development, links, networking and support for youth and their communities. We strive to empower youth to work and compete together for the implementation of positive change through the spirit of fair play throughout their communities.
Our main objective is to gather the youth from around Asia in a celebration of youth, sports and learning; To provide a platform for youths in Asia to engage in friendly competition and imbibe the Olympic sporting values of excellence, friendship and respect; To provide a forum for learning, cultural exchange and friendship among the youth of Asia.
Other than sports competitions, Youthopia: Brothers without border will also incorporate educational and cultural programs into its itinerary so as to create a holistic learning experience for all participants. The focus is therefore on attaining the right composition between competitive sports and culture and education.
In its practice, Youthopia: Brothers without border hosted, maintain and develop several communities which strive and flourished from the benefits of its shared value. These communities are youth driven platforms mostly consisted of the young alumni of ITS (Institut Teknologi 10 Nopember) which is a public university in Surabaya, East Java, Indonesia, focused in the higher education of science, engineering and technology. While these communities are of course emphasizes on each of their own local substances and value, they also share common trust and goals which comprised Youthopia: Brothers without border ideals.
Since its first launching on 10th November 1957 until today there are approximately thousands if not tens of thousands ITS alumni and attendees extent on Indonesia and abroad. On Jakarta alone listed and registered members are in range of thousands, not counting their families. With each and every one of them are loyal supporters of their Alma mater values and enthusiastically (at least on smaller scale) active on ITS alumni communities, they provide a perfect opportunity for Youthopia: Brothers without border - which is a subsidiary of IKA-ITS Jakarta Raya - to help interested entities which may consists of corporations or companies to create their share value. Of course this collaboration will have to comply with the core value of Youthopia: Brothers without border movement which is a non-political, nonprofit event based community project coordination body that facilitates development, links, networking and support for youth and their communities.
Correlates with the issue, as of today there are currently three major communities that continually strive and grow with us. They are comprised of: Futsal Community; Golfer Community and Business Community. Each and every one of these communities has their own set of unique ideals and goals, and consists of different demographic background and psychological mindset. However; Instead of becoming a hindrance the difference would become an invaluable asset which can be used to promote the creation of shared value between companies as the benefactor and community as a platform where the shared value are being generated.
Our approach to responsible business provides a clear framework to support and challenge business to improve its performance & benefit society through community investment and development.
Youthopia’s Platform Key Point; we stand for responsible business
For a company, the starting point for creating this kind of shared value is to identify all the societal needs, benefits, and harms that are or could be embodied in the firm’s products. The opportunities are not static; they change constantly as technology evolves, economies develop, and societal priorities shift. An ongoing exploration of societal needs will lead companies to discover new opportunities for differentiation and repositioning in traditional markets, and to recognize the potential of new markets they previously overlooked.We advise, support and challenge our members to create a sustainable future for people and the communities and to improve business performance. Our members work with us to define what responsibility looks like in the workplace, marketplace, community and the environment - and we share what we learn about driving performance through responsible business practice.
We help companies improve their impact by offering advice & training, engagement with our campaigns & programs, and by facilitating collaborative action. Our work is delivered through our national team and regional office and also by our network of global partners.
What are the benefits for a company as a member of Youthopia: Brother without Border Movement?
- A dedicated community platform; one who will offers practical advice to help you and your company get the most out of your membership, locally, nationally and internationally.
- Expert advice and supports to help you develop responsible business practices in the workplace, community, marketplace and environment.
- Benchmarking, diagnostic and management tools to help you shape, measure and achieve your plan of action.
- A trusted and established community based platforms to show your commitment to responsible business practice; which in return gain you positive feedbacks and public exposures.
- Cutting edge research, case studies and a range of 'how-to' guides.
- Networking opportunities to share learning and experience.
- Local support across Indonesia providing a range of exposures and services with local knowledge, experience and networks.
- Training events where you can share and learning, keep up-to-date and collaborate with other companies.
- Media updates on the big responsible business stories – and a monthly members’ e-newsletter highlighting news, events and opinion on responsible business issues.
What are the benefits for Youths and Community that which is the target of Youthopia: Brother without Border Movement?
We campaign with and on behalf of our members. The committed input from our business leadership teams shapes the thinking and strategic direction of all our campaigns. Each Business in the Community campaign is guided by a team of senior executives from business whose provide strategic guidance, establishing and supporting us in achieving agreed objectives. Our programs goal is to enable members to access specialist expertise and training, benchmark their performance, gain recognition for successful CR programs and inspire other businesses to do the same.
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