Question

What position does Michael Porter take when describing Shared Value?

How does this differ from the position of Milton Friedman?

Answer 1

While describing shared value, Michael Porter focus not only upon the organization, but also upon communities. As per Michael Porter, the shared value is about creating such policies and procedures that work to maximize revenue for the firm, and create different benefits to the community, around that the business is operating. So, Michael Porter considered local communities as an important ally or party along with the organization while describing shared value.

It is the position taken up by Michael Porter, different from what that is taken by Milton Friedman who did not consider local community as a party or stakeholder while ensuring firm's objective to maximize the revenue. As per Milton Friedman, managers should work to maximize profit for the shareholders, but remained silent about local communities who get the sufferings in different ways such as air pollution or polluted drinking water. Though, it is Michael Porter that thought about the local communities.