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 Table of Contents

Introduction......................................................................................................................................3

Company Background (AT&T).......................................................................................................4

Shared value in the literature...........................................................................................................4

Creating Shared Value at AT&T......................................................................................................6

Way 1: reconceiving products and markets.................................................................................6

Way 2: redefining productivity in the value chain.......................................................................6

Way 3: building supportive industry clusters...............................................................................7

Conclusion.......................................................................................................................................8

References......................................................................................................................................10
 Introduction

In view of an analysis done by the United Nations in 2016, it is clear that the number of

multinational organizations have increased from 37,000 in the 1990s to more than 100,000 in

2016. Such business are seen to be independent from a larger network of affiliates, suppliers as

well as distributors so that they are easily undertake their business errands internationally (Crane,

Palazzo, Spence & Matten, 2018). Most of the said organizations have been attacked because of

their lack of commitment on social and environmental impact that their operations have created

in varied regions of the world. In order to address such sustainability challenges, firms such as

AT&T have typically moved their learning stages and began to integrate sustainability within

their shared value strategies (Moon, Parc, Yim & Park, 2018).

Most of them start from a risk point of view and few are starting to realize the potential

opportunities related to sustainability. Especially multinational enterprises have the potential to

increase innovation, spur wealth creation, transfer technology, raise productivity, meet basic

needs, enhance living standards, and improve the quality of life for millions of people around the

world. In the same line, but from a strategic perspective, Porter and Kramer argue for creating

shared value which ‘‘involves creating economic value in a way that also creates value for

society by addressing its needs and challenges’’ (Moon, Parc, Yim & Park, 2018).

Creating shared value strategies is an emerging field in the intersection of development

studies strategy stakeholder theory innovation and measurable triple-bottom-line results. As with

any emerging field the current challenge lies in generating empirical observations to confirm,

contradict and refine the new theory. This Report presents AT&T in United States and analyses if

a shared value approach can be found in practice. In order to achieve this goal, we first conduct a

literature review on shared value strategies which serves to define key characteristics of the
approach. Finally, we present the conclusions from the AT&T case analysis and outline further

avenues for research.

Company Background (AT&T)

AT&T Company started its activities in 1983 as a holding company. The fir deals with the

provision of communication and digital services in United States and other parts of the globe

(International). The Company operates through four segments: Business Solutions,

Entertainment Group, Consumer Mobility and International. The Company offers its services and

products to consumers in the United States, Mexico and Latin America and to businesses and

other providers of telecommunications services worldwide (Moon, Parc, Yim & Park, 2018). The

Company also owns and operates three regional Television sports networks, and retains non-

controlling interests in another regional sports network and a network dedicated to game-related

programming, as well as Internet interactive game playing. The services and products offered by

the Company vary by market, and include wireless communications, data/broadband and Internet

services, digital video services, local and long-distance telephone services, telecommunications

equipment, managed networking, and wholesale services.

Shared value in the literature

The concept of shared value dates back to the 1980s to the definition of corporate culture.

Shared values were seen as clearly articulated organizational values which make a significant

difference in the lives of employees, as well as in their organization’s performance. This

definition already entails an important aspect of shared values which are seen essential in order

to align employees with the corporate objective and purpose (Pfitzer, Bockstette & Stamp, 2019).

This idea of alignment was applied to other stakeholder relationships such as interactions

between headquarters and subsidiaries or customers. The idea of aligning actors by focusing on
shared values, however, is not proprietary to management science and also appears, for example,

in public administration which prefers the term ‘public value. Porter and Kramer define shared

value as follows: The concept of shared value can be defined as policies and operating practices

that enhance competitiveness of a company while simultaneously advancing the economic and

social conditions in the communities in which it operates. Value is defined as benefits relative to

costs, not just benefits alone (Porter, & Kramer, 2019). This definition adopts a corporate

perspective and applies the concept of shared values to business and society interactions. The

first to mention shared value in the context of business and society was focusing on local

development: Developing or increasing shared norms and values are primary tasks of the policy

entrepreneur. As in the definition of organizational culture, the alignment of different actors in

the local development context via shared values is expected to improve performance helps to

resolve conflicts (Porter, & Kramer, 2019).

Porter and Kramer’s definition highlights two important aspects of shared value strategies

which are executed via policies and operating practices. First, they must create value for the

company by enhancing competitiveness, an important aspect already developed in previous

publications on strategy and sustainability (Porter, Hills, Pfitzer, Patscheke & Hawkins, 2017).

Second, they must create value for society by advancing social conditions in the communities in

which the company operates a point articulated by research on corporate social performance and

corporate community involvement. Porter and Kramer’s definition, however, adds an important

detail: the societal value is defined relative to costs. This brings shared value close to a strategic

philanthropy approach which is concerned with the efficiency and effectiveness of social

outcomes relative to investments. The key question here is how to have more societal impact per

dollar spent (Porter, Hills, Pfitzer, Patscheke & Hawkins, 2017). Another important point of
shared value strategies is that they ‘‘will be data driven, clearly linked to defined outcomes, well

connected to the goals of all stakeholders, and tracked with clear metrics. The importance of

operationalizing the creation of shared value via metrics and indicators has been demonstrated in

a case on the AT&T as well as in recent publications on strategic corporate responsibility.

Creating Shared Value at AT&T

Way 1: reconceiving products and markets

This approach has been described previously as ‘‘Business at the Bottom of the Pyramid.

Porter and Kramer define it as satisfying unmet social needs’’ and ‘‘serving disadvantaged

communities and it extensively used by AT&T. While this approach is not without critics

especially considering the enhancement of social conditions in communities; (Spitzeck, &

Chapman, 2017) the basic argument rests on creating economies of scale for offering essential

products and services such as health, housing or credit at reasonable prices to disadvantaged

communities, thus fostering their inclusion within the formal economy. Several cases exist

demonstrating innovative approaches such as Hospitals in the area of health in the area of

housing.

Way 2: redefining productivity in the value chain

Environmental management considerations have been applied by AT&T to supply chain

context since the 1990s. These early publications already foresaw that once sustainability

considerations become strategic they will include supply chain considerations (Spitzeck, &

Chapman, 2017). Today, sustainable supply chain issues include carbon trading, waste treatment,

resource consumption as well as sub-contracting and managing supply chains sustainably can

create competitive advantages. Porter and Kramer’s second approach to shared value strategies

follows this tradition and consists of a holistic evaluation of value chain.

Way 3: building supportive industry clusters

The final approach to shared value strategies used by AT&T is creating clusters for local

development. Clusters have been analyzed in the past primarily as industry clusters and were

found to enhance innovation, competitiveness and knowledge exchange. Previous studies also

support that shared values help to align the activities of the actors within clusters. Case studies

have further shown that collaboration and knowledge exchange on sustainability issues in

clusters improves environmental and social performance (Porter, Hills, Pfitzer, Patscheke &

Hawkins, 2017). These insights are now applied to local development contexts which similarly

depend on the interaction and alignment of several players such as suppliers, service providers,

educational institutions, NGOs and local governments in order to attain to local development

goals. This brief literature review demonstrates that the shared value approach propagated by

Porter and Kramer builds extensively on previous research and subsumes research in-bottom-of-

the-pyramid markets, sustainable supply chains and industry clusters for local development

under the umbrella of shared value strategies. Several publications are starting to reference to

shared value strategies. To date follow-up research is either of a theoretical nature or

demonstrates in a case study that shared value strategies do indeed enhance competitiveness.

Several case studies refer to shared value approaches but have been developed before the concept

was propagated. Therefore, we could not identify any Report which aims to empirically test if

shared value strategies can be found in practice and if they apply one or more of the three ways

described by Porter and Kramer. This Report addresses this gap.

 Conclusion

The objective of this Report was to verify if shared value strategies can be found in

practice at AT&T. The report on the collaboration between AT&T does qualify as a shared value

strategy, more precisely as a case of redesigning productivity in the value chain. The Report thus

makes an important contribution to theory by creating some empirical evidence of the shared

value concept in practice. Obviously, a single case study might be able to contradict current

theory but is not sufficient to confirm an emerging theory. Therefore more research is needed in

order to confirm and potentially refine the approach propagated by Porter and Kramer. The

concept of creating shared value entails the question of how value is created for different

stakeholder groups. Adopting a corporate perspective Porter and Kramer (2019) might

underestimate the power of open discourse with the different stakeholder groups in designing

local development strategies and defining relevant indicators. Future research could shed more

light on the question how stakeholders need to be engaged in the creation of shared value
strategies. Another avenue for research lies in the integration of the socio-eco-efficiency analysis

results in strategic management systems such as the Balanced Scorecard.

 References

Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2018). Contesting the value of “creating

shared value”. California management review, 56(2), 130-153.

Moon, H. C., Parc, J., Yim, S. H., & Park, N. (2018). An extension of Porter and Kramer's

creating shared value (CSV): Reorienting strategies and seeking international

cooperation. Journal of International and Area Studies, 49-64.

Pfitzer, M., Bockstette, V., & Stamp, M. (2019). Innovating for shared value. Harvard Business

Review, 91(9), 100-107.

Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing sustainable

business (pp. 323-346). Springer, Dordrecht.

Porter, M. E., Hills, G., Pfitzer, M., Patscheke, S., & Hawkins, E. (2017). Measuring shared

value: How to unlock value by linking social and business results.

Spitzeck, H., & Chapman, S. (2017). Creating shared value as a differentiation strategy–the

example of BASF in Brazil. Corporate Governance: The international journal of

business in society, 12(4), 499-513.