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as aforementioned firms should focus only on customers and shareholders if they only care about profit maximization. with the increasing social pressure against business and proven benefits of csr however firms have a bigger incentive to engage in csr activities these days. a world-famous guru in business strategy professor michael porter at harvard business school takes one step further. with his colleague mark kramer he wrote a very influential article on csv creating shared value in harvard business review. his idea is that a competitiveness and long-term profitability is interdependent with the health of the community around the company. csv suggests that firms should be aware of value maximization.
stakeholders include not only shareholders and customers but also employees partners and the communities in which firms operate that is society. by paying attention to the whole ecosystem around your company you can increase value and ultimately you can earn sustainable profit in the long-term. in other words firms can create social value in order to create financial value. according to porter and kramer there are three approaches to csv reconceived products and markets redefined productivity in the value chain and supportive industry clusters development. by connecting profits with purposes firms can identify new markets expand existing markets improve efficiency and differentiate themselves from competitors. interesting csv cases by korean companies will be discussed in the next step.

Firms can create social value in order to create financial value.

There are three approaches to CSV.

1) Reconceived products and markets

2) Redefined productivity in the value chain

3) Supportive industry clusters development

In the next step, we would like to discuss some interesting CSV cases in Korean companies.

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Social Innovation in South Korea

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