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Creating Shared Value (CSV)in East Java, Indonesia: A critical analysis of CSV impacts on dairy farming communities

Prafitri, Rizki (2017) Creating Shared Value (CSV)in East Java, Indonesia: A critical analysis of CSV impacts on dairy farming communities. PhD thesis, Murdoch University.

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Abstract

Porter and Kramer introduced the concept of Creating Shared Value (CSV) in 2006, as a win-win solution in the relationship between business and society. They argued that CSV addresses social needs and provides opportunities for companies to create economic value. According to Porter and
Kramer CSV transforms business thinking, reshapes capitalism and its relationship with society. They also argued that CSV advances previous Corporate Social Responsibility (CSR) approaches, which they criticised as trapping business in a vicious circle and having little positive impact on society.
This thesis analyses CSV based on a case study of Nestlé Indonesia’s CSV initiatives in dairy farming communities in East Java, Indonesia. Nestlé is a transnational company known for being a pioneer of
CSV theory and for adopting CSV as part of the company’s business strategy. Nestlé established CSV initiatives, including financial and technical support, to help farmers increase milk quality. Nestlé argued that the increase in milk quality would automatically increase farmers’ income because
Nestlé offered a higher price for better quality milk, which in turn improves the quality of life in the communities.

This thesis found that CSV initiatives created economic value for the company. The thesis also found that these CSV initiatives do not automatically improve social conditions in dairy farming communities in East Java, Indonesia. The case study demonstrated that the micro-economic lens of
CS in addressing social issues limited the effectiveness of CSV as the win-win solution. Social value will only be created through CSV initiatives, if it creates economic value for business. This thesis provides empirical evidence that CSV is consistent with the neoclassical economic understanding of business-society relationships. Therefore, this thesis argue that CSV does not advance CSR theory.
Rather, it repackages neoliberal logic as a new rational discourse of CSR.

Keywords: Creating Shared Value (CSV), Nestlé, Dairy farming, Indonesia

Item Type: Thesis (PhD)
Murdoch Affiliation: School of Arts
Supervisor(s): Trees, Kathryn and Brueckner, Martin
URI: http://researchrepository.murdoch.edu.au/id/eprint/42583
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