How the (Business) World Really Works. Business Metaphysics & “Creating Shared Value”

Abstract

We are all in favor of some concept of “Creating Shared Value”. The question is, accordingly, not whether one advocates a “Creating Shared Value”, but which concept of “Creating Shared Value” is plausible and productive. This paper examines the question as to whether Michael E. Porter’s and Marc R. Kramer’s specific concept of “Creating Shared Value” is convincing or not, through the lens of a research program called “Business Metaphysics”, referring predominantly to the “Process Metaphysics” of Alfred North Whitehead and the “Transaction Economics” of John R. Commons. As a result, the paper shows that Porter and Kramer commit the “Fallacy of Misplaced Concreteness”, namely of mistaking the abstract (the ideal world of an overall “win-win”) for the concrete (the contingent and “messy” world of real business). From time to time, a new conceptual spectre haunts the world of business. In recent decades, we witnessed for example: “Shareholder Value”, “Stakeholder Management”, “Corporate Social Responsibility”, “Sustainability”, and lately the spectre of “Creating Shared Value” (Porter/Kramer Harv Bus Rev 89:62–77, (2011); Porter Harv Bus Rev (2011), Porter Creating shared value (Ideas for Change) (2012); Porter/Kramer Calif Manage Rev 56(2): 149–151 (2014)), which aims at replacing all the other (conceptual) spectres. We are told about “The Big Idea” and “How to Fix Capitalism and unleash a new wave of growth” (Titel page of Harvard Business Review Vol. 89 No.1-2 (2011) or “How to reinvent capitalism” (Porter/Kramer Harv Bus Rev 89:62–77, (2011): 63). The way how this “Big Idea” is presented, it almost takes after a religious promise of a “promised land” of a magical capitalism. The question arises as to whether the concept of “Creating Shared Value” can do justice to this ambitious claim. My answer is that it cannot. I will provide the reasons for this answer in the light of a research program which I call “Business Metaphysics”.