2. THE ART, SCIENCE, AND
VALUES OF BUSINESS
• What is art?
• The application of human creative skill and imagination
• Typical “art of business” topics:
• Innovation, leadership, risk management, strategy, trust,
personal relationships
• But there are science components to each, too
• What is science?
• The investigation of things that are in the universe that can
be objectively studied and explained
• Typical “science of business topics:
• Accounting rules, finance rules, analytics, compensation, sales
management, measures of productivity, performance,
satisfaction
• What are values?
• Principles or standards of behavior
3. THE ART, SCIENCE, AND
VALUES OF BUSINESS
• In the Six Principles of Sun Tzu & the Art of Business, what
are the arts?
• Making good choices
• Understanding the options
• Strategic thinking
• Honest self-assessment and assessment of the
competition
• Move with speed but not haste
• Collaboration / alliances
• Character
4. THE ART, SCIENCE, AND
VALUES OF BUSINESS
• What is the “Art of Commerce” according to Andreas Lloyd
(the Philosopher’s Beard blogger)?
• He doesn’t really say, does he?
• What is he focused on?
• Economics versus Business, right?
• What is his take on the virtues / values of each in an academic
setting?
• If students and professionals demand a business degree
program (a “practical art”), what is the point of arguing that
business is a craft rather than a science?
• What do you think about Lloyd’s value proposition?
• A lot of economics programs are housed in Schools of
Business or in Mathematics departments or in Ag Schools.
Why might these be different, and does it make sense?
• What is our view here at SPU?
5. THE ART, SCIENCE, AND
VALUES OF BUSINESS
• Porter & Kramer: Shared values
• Shared value is not social responsibility, philanthropy, or even
sustainability, but
• a new way to achieve economic success.
• Society’s needs are large and growing, while customers,
employees, and a new generation of young people are asking
business to step up
• Business has largely excluded social and environmental
considerations from its economic thinking.
• Firms have taken the broader context in which they do business as
a given and resisted regulatory standards as invariably contrary to
their interests.
• Shared value is not about personal values.
• Nor is it about “sharing” the value already created by firms—a
redistribution approach.
• Instead, it is about expanding the total pool of economic and
social value (i.e., creating value)
6. CREATING SHARED
VALUE IN PRACTICE
• Reconceiving Products and Markets
• Is our product good for our customers? Or for our customers’
customers?
• Identify all the societal needs, benefits, and harms that are or could
be embodied in the firm’s products
• Redefining Productivity in the Value Chain
• There is a growing awareness of the fallacy of short-term cost
reductions (which often actually lower productivity or make it
unsustainable) are giving rise to new approaches
• The strongest international competitors will often be those that can
establish deeper roots in important communities
• Enabling Local Cluster Development
• Geographic concentrations of firms, related businesses, suppliers,
service providers, and logistical infrastructure in a particular field
• Such as IT in Silicon Valley, cut flowers in Kenya, and diamond
cutting in Surat, India
• Or the cloud computing business in Seattle
7. CREATING SHARED
VALUE IN PRACTICE
• Profits involving a social purpose represent a higher
form of capitalism
• Creating shared value presumes compliance with the
law and ethical standards, as well as mitigating any
harm caused by the business, but goes far beyond
that.
• Old thinking: Unsustainable financing vehicles that turned
out to be socially and economically devastating and led
to recession of 2008
• New thinking: A shared value approach would have led
financial services companies to create innovative
products that prudently increased access to home
ownership.
