Objectives of Business

Avoiding anti-social and unfair trade practices

Step 1: Social objectives are those that fulfil the business's obligations toward the society. Step 2: The chapter lists social objectives such as providing quality products at fair prices, creating employment, avoiding unfair trade practices, and paying taxes honestly. Step 3: Avoiding anti-social and unfair trade practices is clearly a social obligation — it protects consumers and maintains healthy competition in society. Step 4: Earning profit and creating customers are economic objectives. Innovation is also an economic objective. So the correct answer is avoiding unfair trade practices.

Service to customers is more important than profit, but profit still matters

Step 1: Henry Ford, the founder of Ford Motor Company, always gave priority to the service motive. Step 2: He kept profit margins low and focused on satisfying customers first. Step 3: His quote 'Service first and profit next' means that while profit is necessary, it should not be the primary driving force — serving customers well should come first. Step 4: Option A is wrong because Ford never said businesses should avoid profit entirely. Option C contradicts his philosophy. Option D is wrong because service is central to his business model.

Without profit, a business cannot survive, grow, or stay competitive in the long run

Step 1: The chapter uses the phrase 'profit is the life-blood of business' to show how essential profit is for a business to function. Step 2: Just like blood is necessary for a living body to survive, profit is necessary for a business to exist and continue operating. Step 3: The chapter explains that profit ensures continuity, funds growth, rewards risk-taking, and is the biggest source of self-financing. Step 4: Option A is wrong — the chapter emphasises that profit alone cannot be the only goal. Options C and D are incorrect and not supported by the text.

Eating, in relation to the purpose of living

Step 1: Urwick was a management thinker who commented on the role of profit in business. Step 2: His famous quote is: 'Earning of profit cannot be the objective of business any more than eating is the objective of living.' Step 3: This means just as we eat to live (eating is necessary but not the purpose of life), a business earns profit to operate (profit is necessary but not the ultimate purpose of business). Step 4: The analogy clearly compares profit to eating — both are necessary but neither is the final objective. The other options do not match Urwick's exact analogy.