The Understanding of Small and Medium Enterprises on Creating Shared Value in Indonesia: An Exploratory Study

Gina Harventy; Fatima Abdul Hamid; Fatimah Mat Yassin; Norsyahida Binti Mokhtar

doi:10.18196/jati.v8i2.27366

Authors

Gina Harventy Accounting Department, Faculty of Economics and Business, Universitas Muhammadiyah Malang, East Java, Indonesia https://orcid.org/0000-0003-3184-0638
Fatima Abdul Hamid Accounting Department, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Gombak, Malaysia
Fatimah Mat Yassin Accounting Department, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Gombak, Malaysia https://orcid.org/0000-0003-2748-4300
Norsyahida Binti Mokhtar Accounting Department, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Gombak, Malaysia https://orcid.org/0000-0001-6759-143X

DOI:

https://doi.org/10.18196/jati.v8i2.27366

Keywords:

CSV, SMEs, Sustainability, Competitive Advantage, Indonesia

Abstract

Implementing the Creating Shared Value (CSV) strategy is a new strategy to respond to sustainability issues. The CSV strategy can be used to solve social and environmental problems while creating economic value for companies and society. CSV has been widely applied by large companies, but its understanding and implementation among Micro, Small, and Medium Enterprises (SMEs) in developing countries, especially in Indonesia, are still limited. This study aims to explore SMEs' understanding of the CSV concept, identify driving factors, and uncover challenges and obstacles in implementing CSV in SMEs in Indonesia. This study utilized a case study approach with a semi-structured interview method with 9 SMEs listed on the Indonesia Stock Exchange. The study shows that most SMEs still equate the definition of CSV with Corporate Social Responsibility (CSR), and do not fully understand its strategic potential as an intangible asset as a competitive advantage for SMEs. CSV drivers in SMEs include company competitiveness, economic and social value, and business strategy. However, SMEs face challenges and obstacles in implementing CSV. Lack of expertise and guidelines indicates a lack of knowledge, expertise, and clear guidance in implementing CSV strategically in SMEs. This study emphasizes the importance of CSV integration in SME business strategies and provides theoretical and practical contributions to the development of policies that encourage CSV adoption in SMEs in Indonesia.

References

Ardhani, K., & Yovani, N. (2022, March 23). Social Embeddedness on Fresh Milk Development Programs under Creating Shared Value concept. https://doi.org/10.4108/eai.27-7-2021.2316886

Amidjaya, P. G., & Widagdo, A. K. (2020). Sustainability reporting in Indonesian listed banks: Do corporate governance, ownership structure and digital banking matter? Journal of Applied Accounting Research, 21(2), 231–247. https://doi.org/10.1108/JAAR-09-2018-0149

Andelin, M., Karhu, J., & Junnila, S. (2015). Creating Shared Value in a Construction Project – A Case Study. Procedia Economics and Finance, 21, 446–453. https://doi.org/10.1016/s2212-5671(15)00198-7

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625–641. https://doi.org/10.1177/014920630102700601

Bell, E., Harley, B., & Bryman, A. (2022). Business research methods. Oxford university press.

Breliastiti, R., & Josephine, K. (2017). Creating shared value (CSV) as a development of corporate social responsibility (CSR) in Indonesia. Advanced Science Letters, 23(8), 7039–7041. https://doi.org/10.1166/asl.2017.9284

Carnahan, S., Kryscynski, D., & Olson, D. (2017). When does corporate social responsibility reduce employee turnover? evidence from attorneys before and after 9/11. Academy of Management Journal, 60(5), 1932–1962. https://doi.org/10.5465/amj.2015.0032

Chandler, D. (2022). Strategic corporate social responsibility: Sustainable value creation. Sage Publications.

Galbreath, J. (2005). Which resources matter the most to firm success? An exploratory study of resource-based theory. Technovation, 25(9), 979–987. https://doi.org/10.1016/j.technovation.2004.02.008

Guo, H., Ye, M., & Lu, W. (2023). Integrating creating shared value into competitive strategies: case studies of Chinese international construction companies. International Journal of Construction Management. https://doi.org/10.1080/15623599.2023.2299529

Iqbal, M., Riyanto, Wilopo, Supriono, Yudiono, N., & Fahmi, M. R. A. (2025). The ‘clean, health, safety and environment sustainability’ (CHSE) in tourism in the post-COVID19: a shared value perspective in Malang Regency, Indonesia. Cogent Social Sciences, 11(1). https://doi.org/10.1080/23311886.2025.2454741

Kim, M. (2018). Does environmental leadership affect market and eco performance? Evidence from Korean franchise firms. Journal of Business and Industrial Marketing, 33(4), 417–428. https://doi.org/10.1108/JBIM-02-2017-0046

Kiminami, L., Furuzawa, S., & Kiminami, A. (2023). Role of creative classes in sustainable agricultural development: focusing on creating shared value in rural Japan. Asia-Pacific Journal of Regional Science, 7(3), 903–934. https://doi.org/10.1007/s41685-023-00282-x

Lanzolla, G., & Markides, C. (2021). A Business Model View of Strategy. Journal of Management Studies, 58(2), 540–553. https://doi.org/10.1111/joms.12580

Litz, R. A. (1996). A resource-based-view of the socially responsible firm: Stakeholder interdependence, ethical awareness, and issue responsiveness as strategic assets. Journal of Business Ethics, 15(12), 1355–1363. https://doi.org/10.1007/BF00411820

Menghwar, P. S., & Daood, A. (2021). Creating shared value: A systematic review, synthesis and integrative perspective. International Journal of Management Reviews, 23(4), 466–485. https://doi.org/10.1111/ijmr.12252

Palazzo, M., Vollero, A., & Siano, A. (2020). From strategic corporate social responsibility to value creation: an analysis of corporate website communication in the banking sector. International Journal of Bank Marketing, 38(7), 1529–1552. https://doi.org/10.1108/IJBM-04-2020-0168

Pfitzer, M., Bockstette, V., & Stamp, M. (2013). Innovating for Shared Value.

Pfitzer, M., & Kramer, M. (2016). The Ecosystem of Shared Value. In Harvard Business Review (Vol. 94, Issue 10, pp. 80–89).

Pollach, I. (2015). Strategic corporate social responsibility: the struggle for legitimacy and reputation. In Int. J. Business Governance and Ethics (Vol. 10, Issue 1).

Porter, M. E. (1991). Towards a dynamic theory of strategy. Strategic Management Journal, 12(2 S), 95–117. https://doi.org/10.1002/smj.4250121008

Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard Business Review, 80(12), 56–68.

Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1–2). https://doi.org/10.32591/coas.ojss.0201.04037b

Porter, M. E., Kramer, M. R., Wurster, T. S., & Sahlman, W. A. (1999). Philanthropy ’ s New Agenda : Creating Value The Strategic Power of Saying No.

PwC (2021). Indonesia’s Sustainable Transformation.

Rahardja, L. (2024). Corporate sustainability towards creating shared value: an empirical quantitative evidence from Indonesia. Environment, Development and Sustainability. https://doi.org/10.1007/s10668-024-04559-9

Roberts, P. W., & Dowling, G. R. (2002). Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23(12), 1077–1093. https://doi.org/10.1002/smj.274

Rokhim, R., Lubis, A. W., Faradynawati, I. A. A., Perdana, W. A., & Deni Yonathan, A. (2023). Examining the role of microfinance: a creating shared value perspective. International Journal of Ethics and Systems, 39(2), 379–401. https://doi.org/10.1108/IJOES-09-2021-0168

Saenz, C. (2019). Creating shared value using materiality analysis: Strategies from the mining industry. Corporate Social Responsibility and Environmental Management, 26(6), 1351–1360. https://doi.org/10.1002/csr.1751

Schmidt, J., & Keil, T. (2013). What makes a resource valuable? Identifying the drivers of firm-idiosyncratic resource value. Academy of Management Review, 38(2), 206–228.

Shirasawa, N., & Seo, Y. (2024). CSV Alliance Model of SMEs Considering Local Clusters in Japan. Environmental Science and Engineering, 395–410. https://doi.org/10.1007/978-981-97-3320-0_29

Vollero, A., Palazzo, M., Siano, A., & Sardanelli, D. (2018). Managing CSR communication: A study of legitimacy-seeking strategies adopted by service and product companies. TQM Journal, 30(5), 621–637. https://doi.org/10.1108/TQM-11-2017-0131

Yin, R. K. (2018). Case study research and applications (Vol. 6). Sage Thousand Oaks, CA.

Zhang, Y., Hou, Z., Yang, F., Yang, M. M., & Wang, Z. (2021). Discovering the evolution of resource-based theory: Science mapping based on bibliometric analysis. Journal of Business Research, 137, 500–516. https://doi.org/10.1016/j.jbusres.2021.08.055

The Understanding of Small and Medium Enterprises on Creating Shared Value in Indonesia: An Exploratory Study

Authors

DOI:

Keywords:

Abstract

References

Published

How to Cite

Issue

Section

License