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Companies adopting this model are believed to attract and retain talent, build stronger relationships with stakeholders, and create long-term sustainable value.

2. General Concept of Virtuous Business:

In a broader sense, “Virtuous Business” refers to the idea that businesses can and should operate in a way that is not solely focused on maximizing profits, but also considers the ethical and social impact of their decisions. This may involve practices like fair labor practices, environmental responsibility, community engagement, and responsible production and consumption.

3. Value-Based Management Model (VBM):

While not directly called “Virtuous Business,” the VBM also shares some similarities. This model emphasizes maximizing long-term shareholder value by focusing on creating value for all stakeholders, including employees, customers, and the community. This often involves aligning business goals with environmental sustainability, social responsibility, and ethical corporate governance.

How does VBM affect public companies’ competitiveness?

Adopting a VBM can impact public companies’ competitiveness in both positive and negative ways:

Benefits:

• Enhanced brand reputation and customer loyalty: Consumers increasingly value companies that act ethically and responsibly, leading to positive brand perception and customer loyalty.
• Attract and retain talent: Skilled employees are drawn to companies with strong values and a positive social impact.
• Reduce costs and risks: Responsible practices can lead to lower operational costs, reduced environmental impact, and improved employee safety, minimizing risks and long-term costs.
• Increased innovation and agility: Focusing on stakeholder needs can lead to new business opportunities and innovative solutions.

Challenges:

• Short-term profitability: VBM may focus on long-term value creation, leading to delayed profit maximization compared to traditional models. This can be challenging for public companies facing pressure to deliver short-term returns to shareholders.
• Implementation complexities: Integrating VBM principles into decision-making and existing business processes can be complex and require cultural shifts within the organization.
• Measuring impact: Quantifying the social and environmental impact of VBM practices can be challenging, making it difficult to demonstrate return on investment to shareholders.

Overall, whether VBM enhances or hinders competitiveness depends on the company’s specific context, industry, and execution. While there may be short-term challenges, businesses that successfully embrace VBM principles can build long-term resilience, attract talent, and create sustainable value for all stakeholders.