Certified Production & Operations Manager (POM) Practice Exam

What refers to developing policies that enhance organizational competitiveness while improving community conditions?

1. Corporate social responsibility

2. Shared value

3. Stakeholder engagement

4. Social entrepreneurship

The correct answer is: Shared value

The concept that refers to developing policies that enhance organizational competitiveness while simultaneously improving community conditions is shared value. Shared value emphasizes the notion that businesses can create economic value in a way that also produces value for society by addressing its challenges. This approach encourages companies to consider the social and environmental impacts of their operations and to align their success with societal progress. In contrast, corporate social responsibility focuses more on a corporation's responsibilities to society and the environment, often as an add-on to their core business strategy rather than an integral part of it. Stakeholder engagement refers to the process of involving various parties—such as employees, customers, suppliers, and the community—in decision-making, which is important but does not directly imply creating competitive advantage through shared societal benefits. Social entrepreneurship involves creating ventures with the primary goal of addressing social issues, which is significant but distinct from the concept of creating shared value that benefits both the business and the community simultaneously. Thus, the emphasis on marrying competitive strategy with societal improvement defines shared value more accurately than the other concepts.