S9 INNOVATION AND CREATING SHARED VALUE Flashcards
What are the 5 Porter’s Forces ?
- Supplier power
- Buyer power
- Competitive Rivalry
- Threat of Substitution
- Threat of New Entry
What is Porter Hypothesis ?
Strict environmental regulations can actually enhance a company’s competitiveness
According to this hypothesis, stringent regulations encourage ?
Companies to innovate and improve their production processes, leading to more efficient and cleaner technologies
What is this innovation effect do ?
Not only benefits the environment but also boosts the company’s performance and profitability
All in All, Porter Hypothesis posits that ?
Environmental regulations can be a driver for innovation and economic growth rather than just a cost.
What is competitive advantage ?
Attribute that allows an organization to outperform its competitors
Give examples of competitive advantage :
Natural ressources
Highly skilled labor
Geographic location
Access to new technology
Shared value
What is comparative advantage ?
Economic principle that explains how countries or entities benefit from specializing in the production of goods or services where they have a relative efficiency.
What is the difference between comparative and competitive advantages ?
Comparative advantage: Relies on material advantages like natural resources and location.
Competitive advantage: Recognizes both non-tangible social advantages (like brand, innovation) and material advantages.
Porter’s Policy Recommendations ?
- clear goals with flexible approaches : let industry innovate
- important to design policy to improve firm information and allow flexibility in compliance.
Godfrey. CSR activities can provide ?
An insurance mechanism to preserve rather than generate financial performance
Godfrey. The effect of CSR is not to ?
send a signal that the company is not completely self-interested. And impacts will be considered
Godfrey. CSR represents a ?
Potential method of creating value for shareholders in the face of certain types of negative events
TRADITIONAL ARGUMENTS FOR CSR ACCORDING TO PORTER :
Moral obligation
Sustainability
License to operate
Reputation
What is Responsive CSR ?
- Companies addressing societal issues that directly affect their business or arise from their operations,
- Through compliance with standards and mitigating negative impacts.
It’s a reactive approach to CSR, aiming to meet stakeholder expectations and manage risks rather than proactively driving social change.
What must be done to advance CSR ?
- must root it in a broad understanding of the interrelationship >< corporation and society
- while at the same time anchoring it in the strategies and activities of specific companies
Principle of Shared Value ?
- a meaningful benefit for society that is also valuable to the business
- business activities social/policies must benefit the business and society
- Can be exploited by firms for competitive advantage
Strategic CSR
- management strategy where business find business opportunities in social and environment problems
- Creating a CORPORATE SOCIAL AND ENVIRONMENTAL AGENDA
Innovating to meeting society’s needs and build a profitable enterprise
- Creating shared value entails embedding a social mission in the corporate culture
- Channeling resources to the development of innovations that can help solve social problems
Competitive advantage depends on ?
Constructing a unique value chain that lowers costs or better serves a particular customer niche
What are the 3 categorizing Social-Business Issues ?
1- Generic Social Issues
2- Value Chain Impacts
3- Competitiveness Impacts
1- Generic Social Issues ?
- not significally impacted by a company’s operations
- not materially affect a company’s long-term competitiveness
2 - Value Chain Impacts
social issues that are significally impacted by the company’s activitites in the ordianry course of business
3- Competitiveness Impacts ?
social issues in the company’s external environment that affect the underlying drivers of competitiveness in the locations where the company operates
