Introduction

In view of an analysis done by the United Nations in 2016, it is clear that the number of

multinational organizations have increased from 37,000 in the 1990s to more than 100,000 in

2016. Such business are seen to be independent from a larger network of affiliates, suppliers as

well as distributors so that they are easily undertake their business errands internationally. Most

of the said organizations have been attacked because of their lack of commitment on social and

environmental impact that their operations have created in varied regions of the world. In order

to address such sustainability challenges, firms such as AT&T have typically moved their

learning stages and began to integrate sustainability within their shared value strategies.

Most of them start from a risk point of view and few are starting to realize the potential

opportunities related to sustainability. Especially multinational enterprises have the potential to

‘‘increase innovation, spur wealth creation, transfer technology, raise productivity, meet basic

needs, enhance living standards, and improve the quality of life for millions of people around the

world. In the same line, but from a strategic perspective, Porter and Kramer argue for creating

shared value which ‘‘involves creating economic value in a way that also creates value for

society by addressing its needs and challenges’’.

Creating shared value strategies is an emerging field in the intersection of development

studies strategy stakeholder theory innovation and measurable triple-bottom-line results. As with

any emerging field the current challenge lies in generating empirical observations to confirm,

contradict and refine the new theory. This paper presents AT&T in United States and analyses if a

shared value approach can be found in practice. In order to achieve this goal, we first conduct a

literature review on shared value strategies which serves to define key characteristics of the

approach. Secondly, we describe the research methodology, before analyzing the case in light of
the characteristics of a shared value strategy. Finally, we present the conclusions from the AT&T

case analysis and outline further avenues for research.

Company Background (AT&T)

Shared value in the literature

The concept of shared value dates back to the 1980s to the definition of corporate culture.

Shared values were seen as clearly articulated organizational values which make a significant

difference in the lives of employees, as well as in their organization’s performance. This

definition already entails an important aspect of shared values which are seen essential in order

to align employees with the corporate objective and purpose. This idea of alignment was applied

to other stakeholder relationships such as interactions between headquarters and subsidiaries or

customers. The idea of aligning actors by focusing on shared values, however, is not proprietary

to management science and also appears, for example, in public administration which prefers the

term ‘public value. Porter and Kramer define shared value as follows: The concept of shared

value can be defined as policies and operating practices that enhance competitiveness of a

company while simultaneously advancing the economic and social conditions in the

communities in which it operates. Value is defined as benefits relative to costs, not just benefits

alone. This definition adopts a corporate perspective and applies the concept of shared values to

business and society interactions. The first to mention shared value in the context of business and

society was focusing on local development: Developing or increasing shared norms and values

are primary tasks of the policy entrepreneur. As in the definition of organizational culture, the

alignment of different actors in the local development context via shared values is expected to

improve performance helps to resolve conflicts.

 Porter and Kramer’s definition highlights two important aspects of shared value strategies

which are executed via policies and operating practices. First, they must create value for the

company by enhancing competitiveness, an important aspect already developed in previous

publications on strategy and sustainability. Second, they must create value for society by

advancing social conditions in the communities in which the company operates a point

articulated by research on corporate social performance and corporate community involvement.

Porter and Kramer’s definition, however, adds an important detail: the societal value is defined

relative to costs. This brings shared value close to a strategic philanthropy approach which is

concerned with the efficiency and effectiveness of social outcomes relative to investments. The

key question here is how to have more societal impact per dollar spent (Porter and Kramer, 2002;

Kramer, 2005).Another important point of shared value strategies is that they ‘‘will be data

driven, clearly linked to defined outcomes, well connected to the goals of all stakeholders, and

tracked with clear metrics. The importance of operationalizing the creation of shared value via

metrics and indicators has been demonstrated in a case on the AT&T as well as in recent

publications on strategic corporate responsibility.

Creating Shared Value at AT&T

Way 1: reconceiving products and markets

This approach has been described previously as ‘‘Business at the Bottom of the Pyramid.

Porter and Kramer define it as satisfying unmet social needs’’ and ‘‘serving disadvantaged

communities. While this approach is not without critics especially considering the enhancement

of social conditions in communities; Olsen and Boxenbaum,2009) the basic argument rests on

creating economies of scale for offering essential products and services such as health, housing

or credit at reasonable prices to disadvantaged communities, thus fostering their inclusion within
the formal economy. Several cases exist demonstrating innovative approaches such as the

Aravind Eye Hospital in the area of health in the area of housing or the Grameen Bank in the

area of finance.

Way 2: redefining productivity in the value chain

Environmental management considerations have been applied to supply chain context

since the 1990s. These early publications already foresaw that once sustainability considerations

become strategic they will include supply chain considerations (Lewis, 1997). Today, sustainable

supply chain issues include carbon trading, waste treatment, resource consumption as well as

sub-contracting and managing supply chains sustainably can create competitive advantages.

Porter and Kramer’s second approach to shared value strategies follows this tradition and

consists of a holistic evaluation of value chain.

Way 3: building supportive industry clusters

The final approach to shared value strategies is creating clusters for local development.

Clusters have been analyzed in the past primarily as industry clusters and were found to enhance

innovation, competitiveness and knowledge exchange. Previous studies also support that shared

values help to align the activities of the actors within clusters. Case studies have further shown

that collaboration and knowledge exchange on sustainability issues in clusters improves

environmental and social performance. These insights are now applied to local development

contexts which similarly depend on the interaction and alignment of several players such as

suppliers, service providers, educational institutions, NGOs and local governments in order to

attain to local development goals. This brief literature review demonstrates that the shared value

approach propagated by Porter and Kramer builds extensively on previous research and

subsumes research in-bottom-of-the-pyramid markets, sustainable supply chains and industry

clusters for local development under the umbrella of shared value strategies. Several publications

are starting to reference to shared value strategies. To date follow-up research is either of a

theoretical nature or demonstrates in a case study that shared value strategies do indeed enhance

competitiveness. Several case studies refer to shared value approaches but have been developed

before the concept was propagated. Therefore, we could not identify any paper which aims to

empirically test if shared value strategies can be found in practice and if they apply one or more

of the three ways described by Porter and Kramer. This paper addresses this gap.

Conclusion

The objective of this paper was to verify if shared value strategies can be found in

practice. The case study on the collaboration between AT&T does qualify as a shared value

strategy, more precisely as a case of redesigning productivity in the value chain. The paper thus

makes an important contribution to theory by creating some empirical evidence of the shared

value concept in practice. Obviously, a single case study might be able to contradict current

theory but is not sufficient to confirm an emerging theory. Therefore more research is needed in
order to confirm and potentially refine the approach propagated by Porter and Kramer. The

concept of creating shared value entails the question of how value is created for different

stakeholder groups. Adopting a corporate perspective Porter and Kramer (2011) might

underestimate the power of open discourse with the different stakeholder groups in designing

local development strategies and defining relevant indicators. Future research could shed more

light on the question how stakeholders need to be engaged in the creation of shared value

strategies. Another avenue for research lies in the integration of the socio-eco-efficiency analysis

results in strategic management systems such as the Balanced Scorecard. The ability to be able to

come up with a better way to make sure that the market is not corrupted is to ensure equal

distribution of resources in the country. I agree to the fact that the best way to ensure a country is

stable is to allow a free flow of economic information that is able to change the lives of people in

the said nation.