Under the point ‘social responsibility’, consumers form an important group among the stakeholders of business. Which reason is given for this?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Business organisations make money by selling goods and providing services to consumers.
Option (1) Business organisations make money by selling goods and providing services to consumers. — Correct. Under social responsibility, a business has duties towards many interest groups. It makes money by selling goods and services to consumers. So consumers are an important group among its stakeholders, and their interest must be cared for like that of the others.
Option (2) Business organisations use resources which belong to the society. — Incorrect. This is the reason under the point business uses society’s resources. Because it uses what belongs to society, a business should supply products that are in the public interest.
Option (3) Satisfied customers provide good feedback to prospective customers. — Incorrect. Good feedback from satisfied customers is part of the long-term interest of business. It brings new customers and grows the customer base.
Option (4) Exploitative trade practices invite government intervention or action. — Incorrect. This is the point government intervention. Exploitative practices invite government action, which can tarnish the company’s image.
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.” “(ii) Business uses Society’s Resources: Business organisations use resources which belong to the society. They, thus, have a responsibility to supply such products and render such services which are in public interest and would not impair public confidence in them.” “(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.” “(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.” |