At its yearly meeting, a paint company lists the groups it must serve: its shareholders, its workers, its suppliers and its buyers. The chairman says that the buyers deserve the same care as the other groups, because the company earns its income by selling paints to them.
Which point of importance of consumer protection does the chairman’s view reflect?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Social responsibility
Option (1) Social responsibility — Correct. The chairman sees buyers as one group among the many stakeholders, like shareholders, workers and suppliers. His reason is that the company earns its income by selling to them. This is the point of social responsibility: consumers are an important stakeholder group, so their interest must be cared for like that of the others.
Option (2) Moral justification — Incorrect. Moral justification rests on the moral duty of business to avoid exploiting consumers. The chairman speaks of no duty and no exploitation.
Option (3) Government intervention — Incorrect. Government intervention is about avoiding government action against exploitative practices, which can tarnish the company’s image. There is no such action in the case.
Option (4) Long-term interest of business — Incorrect. Long-term interest rests on repeat sales and good feedback from satisfied customers. The chairman does not speak of future sales.
NCERT (2026-27 Edition): “(i) Long-term Interest of Business: Enlightened businesses realise that it is in their long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business. Thus, business firms should aim at long-term profit maximisation through customer satisfaction.” “(iii) Social Responsibility: A business has social responsibilities towards various interest groups. Business organisations make money by selling goods and providing services to consumers. Thus, consumers form an important group among the many stakeholders of business and like other stakeholders, their interest has to be well taken care of.” “(iv) Moral Justification: It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing, etc.” “(v) Government Intervention: A business engaging in any form of exploitative trade practices would invite government intervention or action. This can impair and tarnish the image of the company. Thus, it is advisable that business organisations voluntarily resort to such practices where the customers’ needs and interests will well be taken care of.” |