MGT Wk 5 Discussion – Value. Management Assignment

Mgt Wk 5 Discussion – Value
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Institution
Mgt Wk 5 Discussion – Value
Economic value entails the benefits that are gained from a service or good by a company. It involves the maximum price that another individual would be willing to pay for a service and product, so it is often higher in comparison to the market value (Manetti, 2014). Specifically, economic value entails the profits that are generated from a product, and it is determined relative to units of currency in the current economy (Manetti, 2014). On the other hand, social value is the measure of the relative importance that people place on changes they undergo in their lives.
Shared value creation framework entails a context whereby a company creates economic value, but also addresses the social challenges and needs at the same time. Organizations often choose to focus on the creation of a single type of value since they mean different things (Leon, 2017). For instance, an organization will want to focus on social value since they might not understand the value of their products based on the market prices alone. An organization can choose to sacrifice its profits due to its social interests, which means that it is sharing the economic value that it has created (Manetti, 2014). On the other hand, an organization can choose to deal with social issues or concerns which arise from the company’s core business model, thereby achieving economic value by developing social value. In this regard, a company uses one form of value to advance to the other, and each value entails different interests. Many new firms will first focus on creating economic value, which would arise from profits for the products and services (Manetti, 2014). Then, it cannot focus on creating social value, which is often a long-term goal that ensures the organization is sustainable. It is difficult to focus on both economic and social value since it might be harder for the company to have a specific objective.
Economic Value and Social Value Benefit the Growth of The Compa...