Question

Identify the importance of consumer protection discussed in the following lines “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.”

• A. Moral justification
• B. Business uses society’s resources
• C. Social responsibility
• D. Long-term interest of business

Answer 1

The Correct Option is C

The statement highlights the role of businesses in selling goods and providing services to consumers, emphasizing that consumers are a crucial stakeholder group in business operations. Consumer protection is linked to the idea of social responsibility, which is the correct answer. Here’s why:

• Social Responsibility: The concept of social responsibility implies that businesses should act in the best interests of their stakeholders, including consumers. By focusing on consumer protection, businesses are acknowledging their duty to ensure the well-being of consumers, reflecting their commitment to society at large. 
• Consumer as Stakeholders: Just as businesses need to be accountable to shareholders and employees, they also have a responsibility towards consumers, who are directly impacted by business practices. Ensuring their protection indicates that the business respects and values its consumers.
• Ethical Practices: Incorporating consumer protection aligns with ethical business practices, as it shows consideration for the rights and needs of the consumer, contributing to a positive societal impact.
• Reputation and Trust: By prioritizing consumer protection, businesses can build trust with their customer base, leading to long-term relationships and sustainment in the market.

Answer 2

To identify the importance of consumer protection discussed in the given lines, let's analyze the statement and each option in detail:

Statement Analysis

The statement says, "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."

This statement emphasizes the importance of taking care of consumers' interests, highlighting that consumers are a crucial part of the business ecosystem and their well-being should be a priority.

Options Analysis

Moral Justification (1)

Definition: This refers to the ethical reasons for protecting consumers, such as fairness, justice, and the right to be treated well.

Why Not: While moral justification is a valid reason for consumer protection, the statement does not explicitly mention ethical or moral grounds.

Business Uses Society’s Resources (2)

Definition: This refers to the idea that businesses use resources from society and should therefore contribute positively to society.

Why Not: The statement does not mention the use of society's resources or the broader impact on society.

Social Responsibility (3)

Definition: Social responsibility refers to the obligation of businesses to act in ways that are beneficial to society, including protecting the interests of consumers.

Why Correct: The statement emphasizes that consumers are an important group among stakeholders and their interests should be taken care of. This aligns with the concept of social responsibility, where businesses have a duty to protect and serve the interests of all stakeholders, including consumers.

Long-term Interest of Business (4)

Definition: This refers to the idea that protecting consumers' interests can lead to long-term benefits for the business, such as increased customer loyalty and positive reputation.

Why Not: While the long-term interest of business is a valid reason for consumer protection, the statement does not explicitly mention long-term benefits or business interests.

The correct answer is: (3) Social responsibility

The statement highlights the importance of taking care of consumers' interests, which aligns with the concept of social responsibility. Businesses have a duty to protect and serve the interests of all stakeholders, including consumers, as part of their broader social responsibility.