Management accounting is the field that is directly associated with the concept of shared value. Namely, managers can redefine the prioritizing of an organization’s values to determine ways in which business goals and social efforts are interconnected. Researchers have determined that a company in which the economic value is supplemental and socioeconomic and environmental causes are also primarily managed to achieve shared value (Schutte, Hugo and Derbyshire, 2021). Thus, management accounting takes into consideration potential ways to minimize expenses to support social causes of maximizing profit while considering the external environment’s need for assistance. The aim can be associated with both contract design and budgeting (de Zegher, Iancu and Lee, 2019). As a result, the organization’s internal economic environment will align with external causes.
Porter’s dialogue on shared values has been remarkably insightful. Namely, the speaker highlighted that the requirement is guided by the lost legitimacy of businesses (CECP, 2010). The view is supported in current literature as researchers mention companies being perceived as exploiting communities for economic gain (Porter and Kramer, 2018). Thus, Porter reflected on the importance of the connection between the potential and goal of the business as well as the positive influence it can have socially and ecologically. The objective is valid and can potentially change the market and generate a more sustainable relationship between private organizations and communities.
Firms can integrate sustainability efforts to create shared value as both ecological and social causes are to be employed during decision-making and implementation. According to researchers, shared value is approached differently as it implies that the scope of the business aligns with positive environmental impact (Menghwar and Daood, 2021). As a result, sustainability can be reached based on the industry in which the company operates. Electric vehicles are examples of products through which automotive corporations maximize their profit while supporting a positive agenda for sustainability through the avoidance of fossil fuel use.
Reference List
CECP (2010) Michael Porter: Creating Shared Value. Web.
de Zegher, J.F., Iancu, D.A. and Lee, H.L. (2019) ‘Designing contracts and sourcing channels to create shared value’, Manufacturing & Service Operations Management, 21(2), pp. 271–289. Web.
Menghwar, P.S. and Daood, A. (2021) ‘Creating shared value: A systematic review, synthesis and integrative perspective’, International Journal of Management Reviews, 23(4), pp. 466–485. Web.
Porter, M.E. and Kramer, M.R. (2018) ‘Creating shared value’, Managing Sustainable Business, pp. 323–346. Web.
Schutte, D., Hugo, J. and Derbyshire, E. (2021) ‘Value creation perceptions of management accountants in South Africa’, African Journal of Accounting and Financial Research, 4(3), pp. 120–138. Web.