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A company gave refunds to customers despite loss due to defective products. Which objective was primary?

Answer and explanation

Correct answer: Social objective

Direct answer: Option A, social objective. A defective product can harm or disappoint consumers. Giving a refund, even when the company suffers a loss, protects consumer interests and shows honest, responsible conduct. The reasoning is: defective product leads to customer loss; refund compensates the customer; compensation demonstrates consumer welfare; fair treatment can preserve trust. Option A is therefore correct. Option B is wrong because opening or expanding the business is not the main action described. Option C is wrong because wages concern employees, while the action is directed toward customers. Option D is not a recognised management objective in this context and has no connection with refunds. The temporary financial loss does not change the primary objective shown. A socially responsible decision may reduce short-term profit but support reputation and long-term success. Exam cue: when a business protects consumers despite immediate loss, identify the social objective.

Related tags

RefundSocial ObjectiveConsumer Welfare

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