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How Big Business Can Regain Legitimacy

Harvard Business School competitiveness guru Michael E. Porter urges large organizations to invest in small businesses in inner cities
Porter addresses the winners at the Inner City 100 awards event on May 5, 2010
Porter addresses the winners at the Inner City 100 awards event on May 5, 2010

High unemployment, rising poverty, and the public's dismay over corporate greed continue to challenge the market system and the legitimacy of business itself. Feeling the heat even amid talk of recovery, many large organizations are increasing their focus on corporate social responsibility. The problem is that their efforts have not made much of a dent in the challenges they were meant to address—or in the negative perception of big business.

Business must find a way to engage positively in society, but this will not happen as long as it sees its social agenda as separate from its core business agenda. Instead of pushing through further CSR initiatives, business leaders must create shared value at the local level. By this, I mean competing in ways that enhance competitiveness while simultaneously advancing economic and social conditions in the communities where companies operate. It's time to take advantage of the intersecting needs of business and the community while minimizing the differences.