Philosophy: The act for community

A corporate exist amidst our community and it inevitably affects it. The effects can often be negative

or positive depending on how the corporate utilize its community. More often than not, the mostly

known compromisation from the community to the company is how the corporate took resources

from the community. In order to 'redeem' itself, companies often do CSR or Corporate Social

Responsibiltiy. However, two professors from Harvard jotted a new idea to give back to the

community which is creating shared value (CSV). The two terms are often misunderstood and this

piece of work is going to differentiate the two and define them.


Corporate Social Responsibility is an activity of giving back to the community, in the simplest

definition. The act is done by the company to groups or people who are the members of the

community. According to United Nations Industrial Development Organization, Corporate Social

Responsibility is an act where the company is taking social and environmental concerns into their

business operations. The company may segregate a certain amount of money from their yearly

budget plan in order to help the community on behalf of them. Their CSR programs may be sourced

from the company based programs or a kind of funding for another program set by external party.

However, the second option must correlate and be relevant with the company's scope or the

company's vision and mission for their CSR. A CSR has a regulation of segregating a percent ot 1.5

percent of the yearly income for CSR. For example, the biggest private bank in Indonesia shared 1

percent of the budget for their CSR program. The CSR department of the company arranged a

marathon in three cities in order to support community health. Then, they funded a banking

tournament arranged by a university as it is relevant with the company's vision and mission.

CSV or Creating Shared Value is a new notion about giving back to the community notioned by

Michael Porter and Mark Kramer. It is so new that when it is googled, most of the sources would

refer back to Porter and Kramer. CSV is an act of a longer-term CSR directed to direct stakeholders

of  the company or corporate. It is done with a vision of creating a corporate production, distribution

chain and other elements work in a synergy of common value. CSV aims to bring a change to the

social and environment becuase of the value they hold that are implemented to the society. The

shared value that is created is aimed for the direct stakeholders for the company. Direct

stakeholders can be the supplier, farmers or distributor. The Body Shop is known for their

environment friendly trading system value. The company encourage local farmers to trade with

them. In their products, it is attached that they are getting the alcohol for the perfume from local

farmers trading. Producers, distributor and other stakeholders are taught of the value and

encouraged to practice it.


All in all, CSR and CSV is there in order for a company to give a positive impact to the community.

CSR aims for an external stakeholders and it may not always have to be direct stakeholders that got

the effect. Like the university event, the university students may not be directly related but the

vision and mission is related so the company give a hand and a part of their CSR programs. CSV is

creating a shared value among direct stakeholders in order to create a better economy and business

progress. Both of the programs are there to improve the community that the corporate is in and

they are looking to improve the environment.