Corporations are under increasing pressure to play more than their traditional role of creating value for shareholders. However, managers are still struggling with how to systematically assess the value of corporate social responsibility (CSR) efforts. In this article we suggest two reasons for their difficulty. First, they have not considered how to think strategically about maximizing the value of CSR investments. That is, they have not assessed how they can utilize scarce resources available to the firm to maximize the shared value generated. This requires considering which stakeholders should be considered in the estimation of shared value and estimating the costs and benefits to the stakeholders of initiatives being considered. Second, while there has been some effort at developing measurement protocols to measure shared value, the existing methods are limited because they either don't jointly consider the costs and benefits and/or don't adequately consider the strategic issues identified above in the calculations. These two factors inhibit managers' ability to think strategically and track the results of corporate social initiatives. With this in mind, we propose an externalities-based methodology integrating insights from stakeholder and resource-based views of the firm to sharpen their strategic thinking about potential CSR investments and the measuring of shared value. An example is provided to illustrate the insights that our approach can bring to managers interested in maximizing the shared value of CSR initiatives. Copyright © 2011 John Wiley & Sons, Ltd.