Social programs are part of good business strategy, says Harvard senior fellow

MANILA, Philippines - It’s not the usual job, even for a Harvard Senior Fellow: Teaching global corporations how to spend their money to benefit society. Mark R. Kramer, who is also the Founder and Managing Director of FSB Social Impact Advisers, has become the authority when it comes to helping companies integrate their philanthropic efforts with their overall business strategy.

Kramer is the author of an award-winning study titled “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility” (published in the Harvard Business Review, December 2006) with co-author and fellow Harvard Professor Michael E. Porter; the study calls for a more effective way of creating mutual benefits for business and society—a model that, according to its authors, builds on the successes of the traditional model for Corporate Social Responsibility (CSR).

According to Kramer, the traditional CSR model is used by many companies for several reasons: a) from a sense of moral obligation to give back to society; b) out of “enlightened self-interest” as a way of facilitating business operations; c) as a way to pacify critics and eliminate obstacles to doing business; or d) to protect the reputation of a company or brand in the long-run.

The ideas set forth by Kramer and Porter in the study became the basis for Creating Shared Value (CSV), a new model for doing business in a way that benefits society as well. Essentially, CSV takes the strengths of traditional CSR to a whole new level.

This happens because of the core idea behind CSV, which is “symbiosis”. “Symbiosis” is a term originally used in the biological sciences to refer to a mutually beneficial relationship between two living organisms. The relationship exists to ensure the survival and growth of both organisms.

For Kramer, a business must see itself as integral or part of society as a whole. This symbiotic perspective calls for corporations to stop confronting society and its various sectors as obstacles to doing business—and to see them as essential to the growth and survival of the business itself.

With this perspective, Kramer says businesses can begin to create programs that benefit society while also creating a competitive edge.

Both Kramer and Porter gave the example of how global food company Nestlé works with local farmers for production of its food products. They point out that Nestlé benefits as a company by taking care of the welfare of the small farmers.

In the Philippines, Nestlé uses this same approach in working with small coffee farmers in the production of its coffee products.

Kramer’s expertise in the field of philanthropy and CSR includes strategy, evaluation, leadership, social entrepreneurship, community foundations, venture philanthropy, cross-sector collaboration, and social investments. Aside from being a top consultant to major corporations in such matters, he is also the author/co-author of several studies published in the Harvard Business Review—influential studies that changed the way businesses undertake their CSR.

Kramer is currently a senior fellow in the CSR Initiative of the Mossavar-Rahmani Center for Business in Government at Harvard’s Kennedy School of Government.