CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
A Pune-based manufacturing company voluntarily spends part of its profits on a village water-purification project, even though no law requires this. Which concept does this action best illustrate?
The action illustrates corporate social responsibility. The company is voluntarily using its resources to benefit the community, here by funding clean water, without any legal compulsion. The other terms relate to pricing, integration of production stages, or presentation of accounts, not social contribution.
- ACorporate social responsibilityCorrect
- BPrice discrimination
- CVertical integration
- DWindow dressing
Explanation
Voluntary spending by a business to benefit society beyond legal requirements is corporate social responsibility. Price discrimination concerns charging different prices, vertical integration concerns controlling supply stages, and window dressing concerns manipulating reported figures. None of these describes a social contribution.
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