Corporate Social Responsibility or CorporateShared Value? Perceptions of Future SouthAfrican Financial Business Leaders.D....
INTRODUCTIONPorter and Kramer’s (2011) view that capitalism needsto reinvent itself to survive the crisis of confidencebro...
Flawed as many of the existing economic andfinancial assumptions may be, a new system ofcapitalism such as proposed by Por...
PURPOSE OF THE STUDYTo interrogate the extent to which future SouthAfrican business leaders regard a new paradigmembracing...
THE OBJECTIVES OF THE STUDY• To develop measuring instruments for CSV and  CSR.• To assess the validity and reliability of...
BRIEF LITERATURE REVIEWThe actual cause or causes of the financial crisis areprobably multifaceted and to single out the e...
Explanation 1: “corrupt and greedy bankers are toblame”;” But the search for villains did not begin-and-end with afew ‘rog...
Explanation 2: “light touch regulation is to blame”.Castree (2009, p.9) suggests that a paucity ofeffective regulation is ...
Explanation 3: “casino finance is to blame”.Here the lacuna in the regulatory financialsystem allowed profit mad traders t...
Explanation 4: “macro-economic imbalances are toblame”.This explanation is technical and macro rather thanthe more individ...
The fifth explanation is that Anglo-Saxon neo-liberalism is to blame (Foster and Magdoff,2009).This explanation runs paral...
Castree (2009) suggests that each of theseexplanations has a certain cogency that appeals todifferent segments of the soci...
Interestingly, a novel biologically based 6thexplanation of financial crises has recently beenput forward by Coates( 2012)...
Porter and Kramer (2011) maintain thatcapitalism can only succeed in solving theproblem it created by undergoing a paradig...
DEFINITION OF CORPORATE SHAREDVALUE“Policies and operating practices thatenhance the competiveness of a companywhile simul...
RELEVANCE OF THE CONCEPT OF CSV TO SOUTHAFRICAThe idea of shared value creation has a particularresonance in the South Afr...
METHODResearch designThe research design incorporates an exploratorycorrelation cross-sectional that utilizes parametricst...
Accounting students were specifically chosen for thesample because they were considered to be familiarwith corporate socia...
Measuring instrumentsThe measuring instruments consisted of five itemseach for the CSR and CSV scales. Items were arranged...
ReliabilityTests of internal consistency using Cronbach Alpharevealed that the CSR scale attained an acceptable andCSV a m...
ValidityConstruct validity of the measuringinstruments was assessed by subjectingthe variables to a principle componentsfa...
Very briefly, the Kaiser-Meyer-Olkin MSA = .749. withBartlett’s test of sphericity = 0.000 attained indicatedthat the data...
Factor 1Interpreted as CSR component consisted of four out ofthe original five items (with the fifth item loading 0.225,(m...
Factor 3 The underlying dimension of this factor isencapsulated in the heaviest loading item: “ Acompany’s ethical investm...
FINDINGSTable1. Frequency distributions for the CSR and CSV measuring instruments                                   CSR   ...
Table 1 indicates that mean, median and mode scoresare generally higher on the CSR than the CSVmeasuring instrument.This s...
Table 2. Correlation matrix of scores on the CSR and CSV measuringinstruments.                                 CSR      CS...
PEARSON CORRELATION COEFICIENTPearson correlation coefficient of r=0.470,0.01indicates that CSR and CSV are positivelycorr...
Table 3. Paired sample t test for CSR and CSV                                  scores                Mean            N    ...
Paired Differences                 t   df   Sig. (2-                                                                      ...
Table 4. Wilcoxon Signed Rank Test                        N      Mean       Sum of                               Rank     ...
Table 4 indicates Z = -7.2273, P<0.01and thus the difference between theCSR and CSV scores is statisticallysignificant. Ca...
Discussion of the findingsThe findings indicate that although CSR and CSV arepositively correlated, there is a significant...
Shared value vis a vis sustainability :closelyallied conceptsKramer (2012) emphasizes the paradigm ofshared value that he ...
The Corporate shared value principle isdifferentiated from sustainable developmentby Its:• More socially integrated orient...
CONCLUSION• The findings suggest that CSR is preferred toCSV in the current sample .• In the South African context where t...
LIMITATIONS OF THE STUDY• Sample is small and selected non- randomly  from one South African University .• CSR and CSV mea...
Many thanks for yoursustained attention!
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Corporate Social Responsibility or Corporate Shared Value? Perceptions of Future South African Financial Business Leaders.

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Flawed as many of the existing economic and financial assumptions may be, a new system of capitalism such as proposed by Porter (2011) in his model of Corporate Shared Value (CSV) to replace the older model of Corporate Social Responsibility (CSR), will only take root if both the hearts and minds of future generations of financial business leaders are convinced of their cogency and appropriateness. This paper reports the findings of an empirical study utilizing a Likert-type scale designed to measure CSV and CSR preferences among a sample of fourth year accountancy students.

Professor D. A. L Coldwell B.Sc.(Soc) (London), BA (Economics), MA. D.Litt et Phil (Unisa) FCIPD (London), is currently Head of the Division of Management and Human Resources Management at the School of Economic and Business Sciences at the University of the Witwatersrand, Johannesburg He has worked as a researcher for the CSIR and as a research consultant for the Chamber of Mines Research Organisation in Johannesburg. He has also served as a Visiting Professor at the Open University in Milton Keynes, London. Professor Coldwell has produced and acted as contributor to books and written numerous articles in national and international journals. He also sits on the editorial Boards of several national and international Management journals and is a NRF reviewer.


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Corporate Social Responsibility or Corporate Shared Value? Perceptions of Future South African Financial Business Leaders.

  1. 1. Corporate Social Responsibility or CorporateShared Value? Perceptions of Future SouthAfrican Financial Business Leaders.D.A.L. Coldwell
  2. 2. INTRODUCTIONPorter and Kramer’s (2011) view that capitalism needsto reinvent itself to survive the crisis of confidencebrought about by the recent global financial collapseand surmount the ensuing painful process of buildingsome semblance of order and growth to westerneconomies, depends on the extent to which it can beuniversally accepted and adopted as a workingparadigm for future business leaders, and financialleaders in particular.
  3. 3. Flawed as many of the existing economic andfinancial assumptions may be, a new system ofcapitalism such as proposed by Porter andKramer (2011) in their model of Corporate SharedValue (CSV) to replace the older model ofCorporate Social Responsibility (CSR), will onlytake root if both the hearts and minds of futuregenerations of financial business leaders areconvinced of their cogency and appropriateness.
  4. 4. PURPOSE OF THE STUDYTo interrogate the extent to which future SouthAfrican business leaders regard a new paradigmembracing CSV rather than CSR type approaches(Porter and Kramer, 2001) as appropriate andpreferable.
  5. 5. THE OBJECTIVES OF THE STUDY• To develop measuring instruments for CSV and CSR.• To assess the validity and reliability of the measuring instruments using appropriate statistical procedures and analyses.• To measure the perceptions of CSV and CSR in a sample of emergent business leaders• To investigate CSV /CSR preferences in a sample of emergent business leaders.
  6. 6. BRIEF LITERATURE REVIEWThe actual cause or causes of the financial crisis areprobably multifaceted and to single out the evilmachinations of irresponsible leaders in highplaces oversimplifies the actual forces that broughtthe financial crises into being.Castree (2009), for example, suggests that thereare at least five cogent explanations for thefinancial crisis, ranging from the popular and lesscognitive, to the more cerebral and thusreasonable.
  7. 7. Explanation 1: “corrupt and greedy bankers are toblame”;” But the search for villains did not begin-and-end with afew ‘rogue traders’. Even the most demagogic elementsof the news media could not pretend that this was thenub of the problem. Instead, the spotlight was shone ona broader set of actors and a rather different cause:namely, high financiers in general (‘fat cats’) and theircollective greed in particular. This story-line became acommon-place of the low- and middle-brow news”(Castree ,2009,p. 6).
  8. 8. Explanation 2: “light touch regulation is to blame”.Castree (2009, p.9) suggests that a paucity ofeffective regulation is often the favored explanationamong a significant section of the world’s politicaland economic elite.
  9. 9. Explanation 3: “casino finance is to blame”.Here the lacuna in the regulatory financialsystem allowed profit mad traders to exercisetheir appetite for risk and their operationalfreedom to bring disaster on long standing andreputable business organizations such asBarings bank.
  10. 10. Explanation 4: “macro-economic imbalances are toblame”.This explanation is technical and macro rather thanthe more individually-oriented explanationsdiscussed hitherto. Essentially it suggests that thefinancial crisis was brought about by excessinternational liquidity and was symptomatic of animbalanced global economy (Wolf, 2008).
  11. 11. The fifth explanation is that Anglo-Saxon neo-liberalism is to blame (Foster and Magdoff,2009).This explanation runs parallel with Porter’s (2012) in that it suggests that the dominant neo-liberalism capitalistic system needs to betempered with a more socially just form ofcapitalism
  12. 12. Castree (2009) suggests that each of theseexplanations has a certain cogency that appeals todifferent segments of the socio-political spectrumand that they can even be taken together as acomposite explanation of the financial crisis.Castree favors explanation 5; a crisis in Anglo-Saxon liberalism with macro-economic explanation4, because of their broadness in scope and potentialgeneralizability.
  13. 13. Interestingly, a novel biologically based 6thexplanation of financial crises has recently beenput forward by Coates( 2012)Coates suggests the underlying causal factor for “casino finance”-type risk taking may reside in theway risk-taking behavior transforms bodychemistry, to extremes of euphoria and riskybehavior on the one hand, and anxiety and riskaversion, stress and depression on the other.
  14. 14. Porter and Kramer (2011) maintain thatcapitalism can only succeed in solving theproblem it created by undergoing a paradigmshift through adopting corporate shared value(CSV) in place of corporate social responsibility(CSR).Essentially CSV comprises a form ofintegrationist thinking capitalism where socialresponsibility becomes not separated “addedon “ feature but an integral part of businessstrategy an function.
  15. 15. DEFINITION OF CORPORATE SHAREDVALUE“Policies and operating practices thatenhance the competiveness of a companywhile simultaneously advancing theeconomic and social conditions in thecommunities in which it operates. Sharedvalue creation focuses on identifying andexpanding the connections between societaland economic progress.”
  16. 16. RELEVANCE OF THE CONCEPT OF CSV TO SOUTHAFRICAThe idea of shared value creation has a particularresonance in the South African context. Since thedismantlement of the apartheid state and theinstitution of South Africa’s first democratically electedgovernment, expectations have been high thatgovernment and business in consort would findsolutions to poverty and unemployment faced by alarge proportion of the South African population.However, business and government corruption hasstymied service delivery to poor communities(Times, 2012).
  17. 17. METHODResearch designThe research design incorporates an exploratorycorrelation cross-sectional that utilizes parametricstatistical tests (Ghauri and Gronhaugh, 2002). SampleThe non random sample consisted of fourth yearAccountancy students at the University of theWitwatersrand.The entire third year auditing class was approachedfor inclusion and 123 chose to respond.55% of students were male and 45% female. 60% of students were black, 20% Indian and 20%white.The students’ average age was 21 years.
  18. 18. Accounting students were specifically chosen for thesample because they were considered to be familiarwith corporate social responsibility and its financialeffects on the performance of the organization. And,many of them were likely to comprise the corpus of afuture business elite.
  19. 19. Measuring instrumentsThe measuring instruments consisted of five itemseach for the CSR and CSV scales. Items were arranged on a five point Likert-type scaleranging from “strongly agree” to “strongly disagree”with a neutral “neither agree nor disagree”. Items were devised from Porter and Kramer’s (2011)detailed explication of the concepts of CSR and CSV.Tests of normality were conducted for both the CSRand CSV scales using the Kolmogorov-Smirnov (withLillefors significance correction) and Shapiro-Wilktests and were not found to violate normalitysignificantly.
  20. 20. ReliabilityTests of internal consistency using Cronbach Alpharevealed that the CSR scale attained an acceptable andCSV a marginally acceptable Cronbach Alpha value ofC=0.688; and C=0.550 respectively.George and Mallery (2003: 231) suggest that CronbachAlpha coefficients range from > .9 (excellent) to >.8(good). And from >.7 (acceptable) to> .6(questionable), with> .5 (poor) to <.5 (unacceptable).Nunnally (1967, p. 226), however, suggests an internalconsistency score of .5 as a minimum acceptableconvention for exploratory studies.
  21. 21. ValidityConstruct validity of the measuringinstruments was assessed by subjectingthe variables to a principle componentsfactor analysis with a varimax rotation inan attempt to obtain a simple structure.
  22. 22. Very briefly, the Kaiser-Meyer-Olkin MSA = .749. withBartlett’s test of sphericity = 0.000 attained indicatedthat the data were middling-to-good factor analyticalmaterial.Four components obtained eigen values greater than1 (2.997-1.003). These components explained 63.5%of the variance.Varimax rotation with Kaiser normalization indicatedfour components one of which was a doublet and wastherefore not interpreted. The three remainingcomponents achieved a relatively simple structureand were interpreted as follows:
  23. 23. Factor 1Interpreted as CSR component consisted of four out ofthe original five items (with the fifth item loading 0.225,(marginally under the 0.33 conventional cut-off rule).The largest item loading under this factor, item 1 : “Theethical aspects of running a business should remaindistinct from its profit maximization function” loaded0.819 on this component. It was interpreted as CSRfinancial separation.Factor 2The underlying dimension of Factor 2 is indicated byitem 6 : “ A company’s ethical investments should beintegral to making it an effective competitor”. ThisFactor was interpreted as CSV financial integration.
  24. 24. Factor 3 The underlying dimension of this factor isencapsulated in the heaviest loading item: “ Acompany’s ethical investments should realign theentire company’s budget to mutual communityand company social and economic value creation.” Thus factor 3 is interpreted as CSV socialintegration.
  25. 25. FINDINGSTable1. Frequency distributions for the CSR and CSV measuring instruments CSR CSV Valid 123 123 N Missing 0 0 Mean 15.5447 11.9837 Std. Error of Mean .43030 .30479 Median 16.0000 12.0000 Mode 17.00 11.00a Std. Deviation 4.77228 3.38023 Variance 22.775 11.426 Skewness -.823 -.830 Std. Error of Skewness .218 .218 Kurtosis 1.209 2.443 Std. Error of Kurtosis .433 .433 Range 24.00 19.00 Minimum .00 .00 Maximum 24.00 19.00 a. Multiple modes exist.
  26. 26. Table 1 indicates that mean, median and mode scoresare generally higher on the CSR than the CSVmeasuring instrument.This suggests that the respondents generally felt thatseparated corporate social responsibility rather thanintegrated shared value was considered the bettercorporate format
  27. 27. Table 2. Correlation matrix of scores on the CSR and CSV measuringinstruments. CSR CSV Pearson 1 .470** Correlation CSR Sig. (2-tailed) .000 N 123 123 Pearson .470** 1 Correlation CSV Sig. (2-tailed) .000 N 123 123 **. Correlation is significant at the 0.01 level (2-tailed)
  28. 28. PEARSON CORRELATION COEFICIENTPearson correlation coefficient of r=0.470,0.01indicates that CSR and CSV are positivelycorrelated suggesting a communality in theunderlying variance each concept explains.PAIRED SAMPLE T TEST AND WILCOXONSIGNED RANK TESTTo investigate the CSR/CSV relationship in moredetailA paired sample t test was usedand checked with a Wilcoxon signed rank test.Tables 3 and 4. indicate the findings Before conducting the analysis of variance aLevene test for equality of variances wascalculated which indicated the homogeneity ofvariance criterion was not violated (1.017, p=0.442).
  29. 29. Table 3. Paired sample t test for CSR and CSV scores Mean N Std. Deviation Std. Error Mean CSR 15.5447 123 4.77228 .43030Pair 1 CSV 11.9837 123 3.38023 .30479
  30. 30. Paired Differences t df Sig. (2- tailed) Mean Std. Std. 95% Deviation Erro Confidence r Interval of the Mea Difference n Lower Upper CSRPair 1 - 3.5609 4.3648 .393 2.7818 4.340 9.05 122 .000 CSV The paired sample t test displayed in Table 3 suggests a significant difference in CSR and CSV mean scores (t=9.048, P<0.01). Mean differences also indicate that the respondents generally scored higher on the CSR measuring instrument.
  31. 31. Table 4. Wilcoxon Signed Rank Test N Mean Sum of Rank Ranks Negativ 96a 62.63 6012.00 e Ranks Positive 20b 38.70 774.00CSV - CSR Ranks Ties 7c Total 123a. CSV < CSRb. CSV > CSRc. CSV = CSR CSV - CSR Z -7.227b Asymp. Sig. (2- .000 tailed) a. Wilcoxon Signed Ranks Test b. Based on positive ranks.
  32. 32. Table 4 indicates Z = -7.2273, P<0.01and thus the difference between theCSR and CSV scores is statisticallysignificant. Calculation of the effectsize indicates a large effect size =0.46(Cohen, 1988)
  33. 33. Discussion of the findingsThe findings indicate that although CSR and CSV arepositively correlated, there is a significant difference inrespondents’ scores.Generally speaking, CSR separation was chosen over CSVintegration among the selected third year accountancystudents.T he separation of social responsibility expenditure by acompany is preferred to the new integrated shared valueapproach advocated by Porter and Kramer (2011).Tentatively this suggests that the future emphasis offinancial management will follow the existing paradigmwhich Porter and Kramer (2011) maintain is the root causeof the crisis of capitalism
  34. 34. Shared value vis a vis sustainability :closelyallied conceptsKramer (2012) emphasizes the paradigm ofshared value that he proposes is in no waycounter posed to sustainable development, aclosely allied concept:“but our intent is not to sweep asidesustainability. Rather, we see Shared Valueand sustainability as complementary andoverlapping concepts that give rise tomutually reinforcing but different agendas foraction”.
  35. 35. The Corporate shared value principle isdifferentiated from sustainable developmentby Its:• More socially integrated orientation drivenby business self-interest and• Greater short- term and practical focus.
  36. 36. CONCLUSION• The findings suggest that CSR is preferred toCSV in the current sample .• In the South African context where thedistinction between the ‘haves’ and the ‘have-nots’, is sharp and pervasive, this is worrying.• If Porter and Kramer (2011) are to be believed,remedial steps are needed to ensure that the‘baby’ of capitalism is not thrown out with thedirty ‘bath water’ of corruption and greed withwhich it has recently become associated.
  37. 37. LIMITATIONS OF THE STUDY• Sample is small and selected non- randomly from one South African University .• CSR and CSV measuring instruments are novel and require further refinement and modification.• The concept of corporate shared value is of recent origin and does not yet have widespread currency.• The concept of CSVhas blurred boundaries with sustainable development.
  38. 38. Many thanks for yoursustained attention!

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