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Question: Economic value is achieved in business by prioritizing creating value-driven benefits for the industry. This includes producing high-quality products that yield greater profits when sold and generating job opportunities for individuals. Social value, on the other hand, is attained when businesses focus on benefiting society. This involves improving the local community, practicing ethical organizational management, and promoting corporate social responsibility.
Shared value means using both economic and social values to manage a business, making it more adaptable and diverse. The shared value creation framework offers guidance on gaining and maintaining a competitive advantage while being socially responsible. This approach completes the cycle of the AFI framework and enables strategic leaders to create a bigger pie that benefits both shareholders and stakeholders. To understand the role of public stock companies, adopting the shared value creation framework is essential.
However, balancing these two values can be difficult for organizations. They can sometimes contradict each other, leaving managers in a dilemma about how to proceed. Sometimes, one value must be prioritized over another, resulting in missed opportunities. Despite these challenges, adopting a shared value approach is still possible.
Describe the challenges of the recommended culture.
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