An organisation closed its complaint-redressal centre to reduce cost. Profit rose initially, but customers did not return. Which analysis is correct?

Correct answer: Neglect of the social objective later weakened survival and profit

The governing concept is that organisational objectives must be balanced with social objectives and evaluated over the long term. Complaint redressal protects customer interest by giving buyers a channel to report defects, seek remedies and maintain trust. Closing the centre may lower short-term expenditure and temporarily raise profit, but unresolved complaints can reduce satisfaction, reputation, repeat purchases and future revenue. Consequently, the organisation’s survival and long-term profitability may weaken. Option A correctly explains this trade-off. Option B wrongly treats customer service as an employee matter, while C assumes every cost reduction is successful and D ignores management’s responsibility for customer relationships.