This article originally appeared in The Harvard Business Review. Michael Porter has been regarded as one of our leading experts on business strategy. He argues that a narrow view of capitalism, that puts the focus on short term profits, has contributed to some of the problems within capitalism. He believes that business must expand its vision to one of adding value to society. This will result in superior business performance as well as benefit to society.
This is not a new issue. It is anathema to conservative economists who believe that business is only responsible to its shareholders. A good case can be made against this position and Michael Porter does his best to show that creating shared value is in the best interest of society and business.