If expenses are increasing in a business but customer satisfaction is decreasing, what should the entrepreneur do first?
Answer and explanation
Correct answer: Analyse the reasons behind service and cost issues
Two negative trends require diagnosis before action. The entrepreneur should examine cost records, service processes, quality, complaints, and customer feedback to identify the causes and their relationship. Only after this analysis can suitable corrective measures be chosen. Raising prices, blaming customers, or closing immediately may worsen the problem without evidence.
Frequently asked questions
What is the correct answer to this question?
Analyse the reasons behind service and cost issues
Why is this the correct answer?
Two negative trends require diagnosis before action. The entrepreneur should examine cost records, service processes, quality, complaints, and customer feedback to identify the causes and their relationship. Only after this analysis can suitable corrective measures be chosen. Raising prices, blaming customers, or closing immediately may worsen the problem without evidence.
Which subject and chapter does this question cover?
This is a Class 12 Business Studies question. Chapter: Controlling. Topic: Analysing deviations.
