Flawed as many of the existing economic and financial assumptions may be, a new system of capitalism such as proposed by Porter (2011) in his model of Corporate Shared Value (CSV) to replace the older model of Corporate Social Responsibility (CSR), will only take root if both the hearts and minds of future generations of financial business leaders are convinced of their cogency and appropriateness. This paper reports the findings of an empirical study utilizing a Likert-type scale designed to measure CSV and CSR preferences among a sample of fourth year accountancy students. Professor D. A. L Coldwell B.Sc.(Soc) (London), BA (Economics), MA. D.Litt et Phil (Unisa) FCIPD (London), is currently Head of the Division of Management and Human Resources Management at the School of Economic and Business Sciences at the University of the Witwatersrand, Johannesburg He has worked as a researcher for the CSIR and as a research consultant for the Chamber of Mines Research Organisation in Johannesburg. He has also served as a Visiting Professor at the Open University in Milton Keynes, London. Professor Coldwell has produced and acted as contributor to books and written numerous articles in national and international journals. He also sits on the editorial Boards of several national and international Management journals and is a NRF reviewer.

1. Corporate Social Responsibility or Corporate
Shared Value? Perceptions of Future South
African Financial Business Leaders.
D.A.L. Coldwell

2. INTRODUCTION
Porter and Kramer’s (2011) view that capitalism needs
to reinvent itself to survive the crisis of confidence
brought about by the recent global financial collapse
and surmount the ensuing painful process of building
some semblance of order and growth to western
economies, depends on the extent to which it can be
universally accepted and adopted as a working
paradigm for future business leaders, and financial
leaders in particular.

3. Flawed as many of the existing economic and
financial assumptions may be, a new system of
capitalism such as proposed by Porter and
Kramer (2011) in their model of Corporate Shared
Value (CSV) to replace the older model of
Corporate Social Responsibility (CSR), will only
take root if both the hearts and minds of future
generations of financial business leaders are
convinced of their cogency and appropriateness.

4. PURPOSE OF THE STUDY
To interrogate the extent to which future South
African business leaders regard a new paradigm
embracing CSV rather than CSR type approaches
(Porter and Kramer, 2001) as appropriate and
preferable.

5. THE OBJECTIVES OF THE STUDY
• To develop measuring instruments for CSV and
CSR.
• To assess the validity and reliability of the
measuring instruments using appropriate
statistical procedures and analyses.
• To measure the perceptions of CSV and CSR in
a sample of emergent business leaders
• To investigate CSV /CSR preferences in a
sample of emergent business leaders.

6. BRIEF LITERATURE REVIEW
The actual cause or causes of the financial crisis are
probably multifaceted and to single out the evil
machinations of irresponsible leaders in high
places oversimplifies the actual forces that brought
the financial crises into being.
Castree (2009), for example, suggests that there
are at least five cogent explanations for the
financial crisis, ranging from the popular and less
cognitive, to the more cerebral and thus
reasonable.

7. Explanation 1: “corrupt and greedy bankers are to
blame”;
” But the search for villains did not begin-and-end with a
few ‘rogue traders’. Even the most demagogic elements
of the news media could not pretend that this was the
nub of the problem. Instead, the spotlight was shone on
a broader set of actors and a rather different cause:
namely, high financiers in general (‘fat cats’) and their
collective greed in particular. This story-line became a
common-place of the low- and middle-brow news”
(Castree ,2009,p. 6).

8. Explanation 2: “light touch regulation is to blame”.
Castree (2009, p.9) suggests that a paucity of
effective regulation is often the favored explanation
among a significant section of the world’s political
and economic elite.

9. Explanation 3: “casino finance is to blame”.
Here the lacuna in the regulatory financial
system allowed profit mad traders to exercise
their appetite for risk and their operational
freedom to bring disaster on long standing and
reputable business organizations such as
Barings bank.

10. Explanation 4: “macro-economic imbalances are to
blame”.
This explanation is technical and macro rather than
the more individually-oriented explanations
discussed hitherto. Essentially it suggests that the
financial crisis was brought about by excess
international liquidity and was symptomatic of an
imbalanced global economy (Wolf, 2008).

11. The fifth explanation is that Anglo-Saxon neo-
liberalism is to blame (Foster and Magdoff,
2009).
This explanation runs parallel with Porter’s (
2012) in that it suggests that the dominant neo-
liberalism capitalistic system needs to be
tempered with a more socially just form of
capitalism

12. Castree (2009) suggests that each of these
explanations has a certain cogency that appeals to
different segments of the socio-political spectrum
and that they can even be taken together as a
composite explanation of the financial crisis.
Castree favors explanation 5; a crisis in Anglo-
Saxon liberalism with macro-economic explanation
4, because of their broadness in scope and potential
generalizability.

13. Interestingly, a novel biologically based 6th
explanation of financial crises has recently been
put forward by Coates( 2012)
Coates suggests the underlying causal factor for “
casino finance”-type risk taking may reside in the
way risk-taking behavior transforms body
chemistry, to extremes of euphoria and risky
behavior on the one hand, and anxiety and risk
aversion, stress and depression on the other.

14. Porter and Kramer (2011) maintain that
capitalism can only succeed in solving the
problem it created by undergoing a paradigm
shift through adopting corporate shared value
(CSV) in place of corporate social responsibility
(CSR).
Essentially CSV comprises a form of
integrationist thinking capitalism where social
responsibility becomes not separated “added
on “ feature but an integral part of business
strategy an function.

15. DEFINITION OF CORPORATE SHARED
VALUE
“Policies and operating practices that
enhance the competiveness of a company
while simultaneously advancing the
economic and social conditions in the
communities in which it operates. Shared
value creation focuses on identifying and
expanding the connections between societal
and economic progress.”

16. RELEVANCE OF THE CONCEPT OF CSV TO SOUTH
AFRICA
The idea of shared value creation has a particular
resonance in the South African context. Since the
dismantlement of the apartheid state and the
institution of South Africa’s first democratically elected
government, expectations have been high that
government and business in consort would find
solutions to poverty and unemployment faced by a
large proportion of the South African population.
However, business and government corruption has
stymied service delivery to poor communities
(Times, 2012).

17. METHOD
Research design
The research design incorporates an exploratory
correlation cross-sectional that utilizes parametric
statistical tests (Ghauri and Gronhaugh, 2002).
Sample
The non random sample consisted of fourth year
Accountancy students at the University of the
Witwatersrand.
The entire third year auditing class was approached
for inclusion and 123 chose to respond.
55% of students were male and 45% female.
60% of students were black, 20% Indian and 20%
white.
The students’ average age was 21 years.

18. Accounting students were specifically chosen for the
sample because they were considered to be familiar
with corporate social responsibility and its financial
effects on the performance of the organization. And,
many of them were likely to comprise the corpus of a
future business elite.

19. Measuring instruments
The measuring instruments consisted of five items
each for the CSR and CSV scales.
Items were arranged on a five point Likert-type scale
ranging from “strongly agree” to “strongly disagree”
with a neutral “neither agree nor disagree”.
Items were devised from Porter and Kramer’s (2011)
detailed explication of the concepts of CSR and CSV.
Tests of normality were conducted for both the CSR
and CSV scales using the Kolmogorov-Smirnov (with
Lillefors significance correction) and Shapiro-Wilk
tests and were not found to violate normality
significantly.

20. Reliability
Tests of internal consistency using Cronbach Alpha
revealed that the CSR scale attained an acceptable and
CSV a marginally acceptable Cronbach Alpha value of
C=0.688; and C=0.550 respectively.
George and Mallery (2003: 231) suggest that Cronbach
Alpha coefficients range from > .9 (excellent) to >.8
(good). And from >.7 (acceptable) to> .6
(questionable), with> .5 (poor) to <.5 (unacceptable).
Nunnally (1967, p. 226), however, suggests an internal
consistency score of .5 as a minimum acceptable
convention for exploratory studies.

21. Validity
Construct validity of the measuring
instruments was assessed by subjecting
the variables to a principle components
factor analysis with a varimax rotation in
an attempt to obtain a simple structure.

22. Very briefly, the Kaiser-Meyer-Olkin MSA = .749. with
Bartlett’s test of sphericity = 0.000 attained indicated
that the data were middling-to-good factor analytical
material.
Four components obtained eigen values greater than
1 (2.997-1.003). These components explained 63.5%
of the variance.
Varimax rotation with Kaiser normalization indicated
four components one of which was a doublet and was
therefore not interpreted. The three remaining
components achieved a relatively simple structure
and were interpreted as follows:

23. Factor 1
Interpreted as CSR component consisted of four out of
the original five items (with the fifth item loading 0.225,
(marginally under the 0.33 conventional cut-off rule).
The largest item loading under this factor, item 1 : “The
ethical aspects of running a business should remain
distinct from its profit maximization function” loaded
0.819 on this component. It was interpreted as CSR
financial separation.
Factor 2
The underlying dimension of Factor 2 is indicated by
item 6 : “ A company’s ethical investments should be
integral to making it an effective competitor”. This
Factor was interpreted as CSV financial integration.

24. Factor 3
The underlying dimension of this factor is
encapsulated in the heaviest loading item: “ A
company’s ethical investments should realign the
entire company’s budget to mutual community
and company social and economic value creation.”
Thus factor 3 is interpreted as CSV social
integration.

25. FINDINGS
Table1. Frequency distributions for the CSR and CSV measuring instruments
CSR CSV
Valid 123 123
N
Missing 0 0
Mean 15.5447 11.9837
Std. Error of
Mean .43030 .30479
Median 16.0000 12.0000
Mode 17.00 11.00a
Std. Deviation 4.77228 3.38023
Variance 22.775 11.426
Skewness -.823 -.830
Std. Error of
Skewness .218 .218
Kurtosis 1.209 2.443
Std. Error of
Kurtosis .433 .433
Range 24.00 19.00
Minimum .00 .00
Maximum 24.00 19.00
a. Multiple modes exist.

26. Table 1 indicates that mean, median and mode scores
are generally higher on the CSR than the CSV
measuring instrument.
This suggests that the respondents generally felt that
separated corporate social responsibility rather than
integrated shared value was considered the better
corporate format

27. Table 2. Correlation matrix of scores on the CSR and CSV measuring
instruments.
CSR CSV
Pearson 1 .470**
Correlation
CSR Sig. (2-tailed) .000
N 123 123
Pearson .470** 1
Correlation
CSV Sig. (2-tailed) .000
N 123 123
**. Correlation is significant at the 0.01 level
(2-tailed)

28. PEARSON CORRELATION COEFICIENT
Pearson correlation coefficient of r=0.470,
0.01indicates that CSR and CSV are positively
correlated suggesting a communality in the
underlying variance each concept explains.
PAIRED SAMPLE T TEST AND WILCOXON
SIGNED RANK TEST
To investigate the CSR/CSV relationship in more
detail
A paired sample t test was used
and checked with a Wilcoxon signed rank test.
Tables 3 and 4. indicate the findings
Before conducting the analysis of variance a
Levene test for equality of variances was
calculated which indicated the homogeneity of
variance criterion was not violated (1.017, p
=0.442).

29. Table 3. Paired sample t test for CSR and CSV
scores
Mean N Std. Deviation Std. Error
Mean
CSR 15.5447 123 4.77228 .43030
Pair 1
CSV 11.9837 123 3.38023 .30479

30. Paired Differences t df Sig. (2-
tailed)
Mean Std. Std. 95%
Deviation Erro Confidence
r Interval of the
Mea Difference
n
Lower Upper
CSR
Pair 1 - 3.5609 4.3648 .393 2.7818 4.340 9.05 122 .000
CSV
The paired sample t test displayed in Table 3 suggests
a significant difference in CSR and CSV mean scores (t=9.048, P<0.01).
Mean differences also indicate that the respondents generally scored
higher on the CSR measuring instrument.

31. Table 4. Wilcoxon Signed Rank Test
N Mean Sum of
Rank Ranks
Negativ 96a 62.63 6012.00
e Ranks
Positive 20b 38.70 774.00
CSV - CSR Ranks
Ties 7c
Total 123
a. CSV < CSR
b. CSV > CSR
c. CSV = CSR
CSV -
CSR
Z -7.227b
Asymp. Sig. (2- .000
tailed)
a. Wilcoxon Signed Ranks
Test
b. Based on positive ranks.

32. Table 4 indicates Z = -7.2273, P<0.01
and thus the difference between the
CSR and CSV scores is statistically
significant. Calculation of the effect
size indicates a large effect size =0.46
(Cohen, 1988)

33. Discussion of the findings
The findings indicate that although CSR and CSV are
positively correlated, there is a significant difference in
respondents’ scores.
Generally speaking, CSR separation was chosen over CSV
integration among the selected third year accountancy
students.
T he separation of social responsibility expenditure by a
company is preferred to the new integrated shared value
approach advocated by Porter and Kramer (2011).
Tentatively this suggests that the future emphasis of
financial management will follow the existing paradigm
which Porter and Kramer (2011) maintain is the root cause
of the crisis of capitalism

34. Shared value vis a vis sustainability :closely
allied concepts
Kramer (2012) emphasizes the paradigm of
shared value that he proposes is in no way
counter posed to sustainable development, a
closely allied concept:
“but our intent is not to sweep aside
sustainability. Rather, we see Shared Value
and sustainability as complementary and
overlapping concepts that give rise to
mutually reinforcing but different agendas for
action”.

35. The Corporate shared value principle is
differentiated from sustainable development
by Its:
• More socially integrated orientation driven
by business self-interest and
• Greater short- term and practical focus.

36. CONCLUSION
• The findings suggest that CSR is preferred to
CSV in the current sample .
• In the South African context where the
distinction between the ‘haves’ and the ‘have-
nots’, is sharp and pervasive, this is worrying.
• If Porter and Kramer (2011) are to be believed,
remedial steps are needed to ensure that the
‘baby’ of capitalism is not thrown out with the
dirty ‘bath water’ of corruption and greed with
which it has recently become associated.

37. LIMITATIONS OF THE STUDY
• Sample is small and selected non- randomly
from one South African University .
• CSR and CSV measuring instruments are novel
and require further refinement and
modification.
• The concept of corporate shared value is of
recent origin and does not yet have
widespread currency.
• The concept of CSVhas blurred boundaries
with sustainable development.

38. Many thanks for your
sustained attention!