Question at position 64 Which statement is true from the Creating Shared Value concept? Capitalism 1.0 is about expanding the pool of value so that both society and profit levels benefit while Capitalism 2.0 is about expanding the pool of profit so that the distribution of profit to societal needs increasesCapitalism 1.0 is about defining markets according to societal needs while Capitalism 2.0 is about defining markets according to economic needsCapitalism 1.0 is about expanding the pool of profit so that the distribution of profit to societal needs increases while capitalism 2.0 is about expanding the entire value pool so that both society and profit levels benefitCapitalism 1.0 is about expanding the pool of profit so that the distribution of profit to societal needs increases while capitalism 2.0 is about expanding the value pool so that society levels benefit but not profit levels (they stay the same)Capitalism 1.0 considers societal benefits as a source of profitability while Capitalism 2.0 considers social goals to be disconnected from profit

Question

BlackTom AI · Accepted Answer

The question asks which statement is true about the Creating Shared Value concept and the ideas of Capitalism 1.0 vs Capitalism 2.0. 
Option 1: 'Capitalism 1.0 is about expanding the pool of value so that both society and profit levels benefit while Capitalism 2.0 is about expanding the pool of profit so that the distribution of profit to societal needs increases' This option asserts that Capitalism 1.0 expands the overall value pool to benefit society and profits, and that Capitalism 2.0 focuses on expanding the profit pool specifically to fund social needs. This characterization aligns with the common framing that Capitalism 1.0 emphasizes value creation for both society and profits, while Capitalism 2.0 emphasizes broader value creation beyond profits to include societal benefits. 
Option 2: 'Capitalism 1.0 is about defining markets according to societal needs while Capitalism 2.0 is about defining markets according to economic needs' This statement shifts the focus to how markets are defined, claiming a societal-needs orientation in Capitalism 1.0 and an economic-needs orientation in Capitalism 2.0. This is not the standard articulation of the CV/Capitalism 1.0 vs 2.0 distinction, which is more about value pools and shared value rather than market definitions by needs. 
Option 3: 'Capitalism 1.0 is about expanding the pool of profit so that the distribution of profit to societal needs increases while capitalism 2.0 is about expanding the entire value pool so that both society and profit levels benefit' Here, Capitalism 1.0 is depicted as solely profit-focused with distribution to societal needs, which contradicts the shared-value framing that combines societal benefit with value creation. The contrast between 1.0 and 2.0 in this option does not match the established narrative. 
Option 4: 'Capitalism 1.0 is about expanding the pool of profit so that the distribution of profit to societal needs increases while capitalism 2.0 is about expanding the value pool so that society levels benefit but not profit levels (they stay the same)' This option suggests that Capitalism 2.0 increases overall value without profit growth, which misrepresents the idea that shared value seeks to grow value that benefits both society and profits, not to hold profits flat. It also reverses the expected emphasis of the two paradigms. 
Option 5: 'Capitalism 1.0 considers societal benefits as a source of profitability while Capitalism 2.0 considers social goals to be disconnected from profit' This option implies a disconnect between social goals and profit in Capitalism 2.0, which contradicts the shared value concept that ties societal benefits to business value and profits. It mischaracterizes the relationship CV aims to establish. 
Overall, each option presents a distinct framing, with only Option 1 aligning with the established description of Capitalism 1.0 and Capitalism 2.0 in the Creating Shared Value framework, where Capitalism 1.0 focuses on expanding the value pool to benefit both society and profits, and Capitalism 2.0 emphasizes expanding value so that both societal and profit levels gain.

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