Creating shared value. Responsible business by Dutch entrepreneurs in South African agriculture: Do social threats really become opportunities?

Abstract

This research investigates whether shared value creation is present among Dutch entrepreneurs active in South African agriculture and what intrinsic and external drivers enable or constrain companies to act responsibly. Shared value can be created on three levels. The three pillars of shared value creation include reconceiving products and markets, redefining productivity in the value chain and enabling local cluster development. Pillar one includes shaping and designing products that cater the needs of the bottom of the pyramid, pillar two includes a transformation of the value chain in order to address social and environmental issues and pillar three includes knowledge and technology transfer and overall enablement of people, businesses and organizations in the community.Shared value creation along the means of pillar one is difficult for companies in this research since the companies in the sample are mostly engaged in luxury products; which are not desired by the bottom of the pyramid. Second pillar shared value creation is evidently present among the respondents in this research. This can most likely be explained by the fact that altering the value chain is more readily relatable to the wellbeing of a company. On top of this the growing applicability of certification schemes on producers in South Africa increases the link between responsible business activities and the wellbeing of the company. Non-compliance results in non-sales, while compliance results in (often long-term) sales relationships. Compliance with the third level depends very much on the product a company is engaging in. Companies that use less specialized supplies have created a more extensive local network of suppliers, but do not share much knowledge within this network. A big opportunity present in South Africa with respect to cluster development lies in the newly established producer platforms on sustainability.