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The Effects of Creating Shared Value on Corporate Performance

  • Park, Jong-Chul (Division of Business, Chosun University) ;
  • Mool, Prashant (Department of Business Administration, Chosun University) ;
  • Na, June-Hee (School of Transportation, Korea National University of Transportation) ;
  • Lee, Chang-Gon (Department of Business Administration, Korea National University of Transportation)
  • Received : 2014.09.03
  • Accepted : 2014.10.13
  • Published : 2014.10.30

Abstract

Purpose - This study highlights the inter-dependence between business and society. Various business strategies like Corporate Philanthropy and CSR (Corporate Social Responsibility) are introduced to establish better relationship between business and society. Research Design, Data, and Methodology - This study presents a research model clarifying the role of Creating Shared Value (CSV) and its influence on overall corporate performance. Further, we reveal the mediating role of corporate trust generated by various mechanisms of economic and social values, leading to enhanced corporate performance. Results - The proposed research model addresses five different proposals indicating that, by incorporating CSV approaches, organizations can create both business and social values. These values help positively influence corporate trust, ultimately facilitating improvements in overall corporate performance. Conclusions - CSV is currently in its early stage; it is difficult to gather meaningful data to measure its performance. However, this study seeks to connect CSV with other important factors such as corporate trust. The proposed model can be a starting point for a more empirical and formal conceptualization of CSV along with other important links.