Using the shared value business model to bridge the gap in South Africas energy crisis: an analysis of the shared value business model as a corporate governance strategy used to ameliorate the failure of Eskom

For close to two decades, South Africa has experienced a deepening energy crisis which has persisted with no clear sign of sustainable solutions. The operational problems at the monolithic state power utility show no signs of abating and plans to add new generation capacity are ensnared in legal wrangling and red tape. The failure of South Africa’s state-owned company, Eskom Holdings, which supplies more than 90 per cent of the nation’s electricity, is a legacy of chronic mismanagement and rampant corruption during former President Jacob Zuma’s tenure along with a failure to adequately maintain plants and invest in new ones. The power outages undermine the government’s efforts to revive a coronavirus battered economy that has been predominantly plagued by inequality and poor job absorption. The solutions towards solving South Africa’s energy crisis have been from a policy context that negates the contribution of society in solving national problems. Shared value is a concept described by Professor Michael E. Porter of Harvard Business School and Mark Kramer, co-founder and a managing director of FSG, in their 2011 seminal Harvard Business Review article, ‘Creating Shared Value’. They define shared value as “policies and operating practices that enhance the competitiveness of a company whilst simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress”. Shared value bridges the gap in the failings of Corporate Social Responsibility (CSR) in that it looks at business opportunities available in solving social problems. Through a literature review, this paper seeks to argue that the concept of CSR from a South African case has failed in that its application has been ineffective. This is because companies have applied traditional CSR as opposed to strategic CSR which has the potential to promote real value in companies beyond altruistic appraisals. Shared value is about using business to solve social problems in a way that generates profits. It is about seeing companies as the solutions to social and environmental issues and not as creators of human, social and environmental problems.