Creating Shared Value and Internationalization: Going Global by Changing Lives

Abstract

Multinational corporations face challenges in expanding to other countries, particularly the developing countries. While, these countries have enormous potential for business growth, they are also the ones facing greatest social, economic and environmental challenges. Multinational corporations possess resources, knowledge and scale to help solve challenges in these countries, beyond growth for their own businesses. In essence, creating shared value for the business and for the society. In this report, I have attempted to examine the dynamics of such a win-win strategy; whereby a meticulous shared value creation strategy can be used as a complement to the internationalization of Multinational corporations, to enter new markets or to overcome challenges in existing markets by simultaneously creating benefits for the society and environment. After reviewing literature, propositions relating shared value creation to the internationalization of multinational corporations are developed. It is proposed that the shared value creation can encourage multinational corporations to engage in internationalization by increasing their firm specific advantages, internalization and investor´s willingness to invest. It can also help overcome the challenges of internationalization by reducing liability of foreignness & risk of failure; having a longterm perspective and further legitimizing the business. These propositions are tested through a multiple case study comprising of two Danish multinational corporations, Novo Nordisk and Mærsk investigating their shared value-internationalization ventures into two developing countries India and Myanmar respectively. Business and social value creation by the Novo Nordisk & Mærsk are examined initially to assess the actual success of their shared value creation. Propositions relating their internationalization growth and challenges are validated afterwards. Novo Nordisk has been found to help increase awareness, better diagnosis, create jobs, educate healthcare professionals, support local businesses and reduce overall barriers in the diabetes care industry in India, and simultaneously increase its product reach, reduce costs, satisfy employees and improve its brand recognition as a leading pharmaceutical company in India. 2 Mærsk has also helped enable trade, improve supply chain stability, reduce costs for local businesses and reduce overall trade barriers in Myanmar and simultaneously benefited from the improved business environment by expanding its business, reducing risks and increasing its global blue print. Both Novo Nordisk and Mærsk have also successfully increased their firm specific advantages, gradually internalized their operations and improved investor´s willingness to invest. They have also been able to overcome the challenges of internationalization by further legitimizing their businesses, pursuing a long-term perspective and reducing their liability of foreignness & risks of failure. The report thus concludes with findings which support the use of shared value creation strategy to complement internationalization of multinational corporations, for sustainable business growth and a thriving society.