Chapter 5: Social Environment.

Culture:

Meaning:
Culture is the outcome of the society and can be defined as that complex whole which include knowledge, language, belief, art, morals, customers attitude towards work, wealth, family, marriage, religious, education, ethics, etc and other capabilities and habits acquired, by an individual as a member of society.

Effect of culture on business:

1. Culture creates people:
The concept of culture is of great significance to business because it is the culture which generally determines the ethos of the people. It trains the people along particulars lines, tending to put a personality stamp upon them. when people from different cultural background. Promotes, own and manage the organization , the organization themselves acquired distinct culture eg Tata group culture differs from Biral group culture.

2. Culture & globalization:

As business units go international, the need for understanding and appreciating culture differences across various countries is essential work motivation, profit motivation, business goals, negotiating styles, attitude towards the development of business relationship, significance of body gestures, meaning of colours & numbers, etc are vary from country to country. When people from different cultures meet at the single work place, management will be required to manage diversity, where diversity not manage properly it is likely to result in increased employee turnover, reduced communication and increases inter-personal conflict.

3. Culture determines goods & services:

Culture broadly determines the type of goods & services of business should produced. The type of food. People eat, the clothes they wear, the beverages they drink & building materials they use to construct houses vary from culture to culture. Business should realize this cultural differences and brings out product according to cultural need.

4. Language & culture:

Language is the foundation of any culture. Hence, languages are vary from culture to culture. Therefore, business should realize the language differences & operate its operations accordingly.

5. Attitudes:
Attitudes towards work is important as it has significant impact on motivation, lob satisfaction, productivity & other aspect of human resources management. Positive attitude toward work, makes a worker more productive and a more satisfied employee & vice-versa.

6. Collectivism & individualis

The spirit of collectivism and individualism has its influence on employee morale, multiplicity of unions & inter union rivalry.

7. Ambitious or complacent:
Culture makes a person to become ambitious or complacent and ambitious individual is highly motivated, has strong urge to excel, its prepare to change organization and even take risk. Economy become vibrant a large proportion of the population comprises ambitious people.

8. Education:
Education has considerable business implication. Economic progress of a country depends on the education of its citizen. Impact of education on business is basically three form. 1)Attract high waste industries. 2)market potential is enhanced. 3)Type & quality of advertising & packaging.

9. Family:
Family is a remarkable institution bested with several significant contribution. The type of family affects the business by building the attitude towards work, devoting more time for business, etc. The family is also one of the chief agency of social life.

10.

Authority:

Cultural affects the way of superior exercise his authority on subordinate get the work done. The exercise of the authority varies according to the management style and management style varies according to different culture

11.

Attitude towards scientific method:.

The view of scientific method also influence the business operation .Being scientific does not mean that one should reject once traditional culture. Traditional culture & modern science can go together as is proved in our country probably it is only in our country that a manager perform pooja before a new machine in his factory.

12.

Ethics in business:

A business creates its own image by adopting high standard of ethics. Low business ethics result in decline of business. Society expects a businessman to an ethically.

13.

Religion:

Religion refers to a specific and institutionalized, set of belief & practices generally agreed upon by a number of person due to religious feelings people are ready to sacrifice to any extent in the name of religion. Religion effect work culture, superior subordinate relationship, attitude towards business, etc Conflict between religion result in business disorder.

14.

Custom & manners:

Customs are common & or establish practice. Manners are behaviour that are regarded as appropriate in a particular society. The business should understand the manner & customs of his or her country citizen. Failure to understand and respect local customs & manners may land the managers in troubles beside loosing business.

15.

Marriage:

Traditionally marriage had three objectives. The promotion of by the performance of house hold sacrifies, progency whereby the father and his son where assured of happy after life and the line was continued. While the three objectives are relevant even today what needs to be stressed is that the marriage is a social institution, which results in the multiplication of people, settled life and systematized and organized activities. All these have economic significance. What is more, marriage may even revive a recession-hit economy.

Social Responsibility Of Business

Meaning:
Social responsibility is understood as the obligation of decision makers to take action which protect and improve the welfare of society as a whole with their own interest.

1. Responsibility towards share holders:

It arises because share holders have taken risk by investing their money in to the business. Therefore business should: Pay good return on investment To capital appreciation Consolidate the financial position of the firm. Business should make good profit and build up reserve so as to with stand environmental fluctuation and fulfill the requirement.

2. Responsibility towards employees:

It arises because employees perform duties with their wholehearted efforts and spend more than one third part of their life in the organization. The responsibility includes: Payment of fair wages. Provision of best possible working condition safety and health. Establishment of fair work standards and norms. Proper training and education of employees. Proper system of promotion and growth for employees. Reorganization, appreciation and encouragement of special skill and capabilities of employees. Efficient grievance handling system. Participation in management.

2. Responsibility towards Consumer:

It arises because consumer is the foundation of business and causes of its existence. It includes: Improving the efficiency of business so that: (1) Productivity increases and price of goods redues. (2) Quality of the product improve. (3) Availability of goods is easy by smoothing th distribution system.

From avoiding creation of artificial shortage and black marketing. Revealing the truth in advertising and labeling. Prevention of monopoly leading to consumer exploitation. Providing after sales services. To attain genuine completes from customers and to welcome their suggestion for improvements in products or servics so as to satisfy their needs better.

3. Responsibility towards Community:

It arises because the business obtains its inputs from community or society at large, exist with support of community and markets its product in community. It includes: Protection of an environment from pollution. To assist the development of locality and backward areas. To preserve scares resources and develop attractive if possible. To contribute to research and development. To develop ancillaries and small industries.
To contribute to social causes such as education, population control, relief operation during natural calamities, like flood, drought, earth quake etc

4. Responsibility towards Government:

It arises because the government regulates, protects and promotes the business includes:
Complying with all legal requirement. Paying taxes honestly. Deducting tax at sources (TDS) where ever applicable. Executing government contract. Making services of executives available to the government. Acting as a welling partner in pursuit of public welfare.

Social responsibility Model.

There are two basic approaches to the concept of corporate social responsibility. Some theorists focusing on the micro level of analysis try to show individual ompanies how they can be more socially responsive.

Ackermans Model:
Micro-level theorist Robert Ackerman was among the earliest people to suggest that responsiveness ( he prefers to use the term responsivness) should be the goal of corporate social endeavors. Ackermandescribed three phases through whih companies commonly tend to pass in developing rsponss to social issues. Organizational Level Chief Executive Phase-1 Issue: Corporate obligation. Action: Right and Policy. Outcome: Enriched purpose, increased awaerness. Phase-2 Obtain knowledge and staff specialists. Phase-3 Obtain organisational commitment, change performance expectations. Obtain response from operating units. Apply data system to performance measurement.

Staff Specialists

Issue: Technical Problem. Action: Design data system and interpret environment. Outcome: Technical and info. ground

Issue: Management Problem. Action: Commit resources and modify procedures. Outcome: Increased responsiveness. In phase 1: A corporations top managers learn of an existing social problem. At this stage, no one ask the company to deal with it. The chif executive officer merely acknowledges the problem by making a written or oral statement of the ompany towards it.

Division Management

In phase 2: The company now integrates the policy into its ongoing operations unfortunately, implementation often comes slowly and not until the government or public opinion the company to act. By that time the company has lost the initiative. Ackerman thus advises that managers should act early in the life cycle of any soial issue in order to enjoy the largest mount of managerial discretion the outcome.

Carrolls Four-part Model:

Archie B. Carroll has promulgated the four-part model, while discussing the nature of social responsibility. The model ( through the length of its bars) suggests that because a business firm is basically an economic entity, its primary responsibility is economic. It must produce the goods and services that society wants and must sell them at a profit. Legal responsibilities are also basic. Firms should operate with in the law. Economic Responsibility Legal Responsibility Ethical Responsibility Discretionary Responsibility

It divides the social responsibility of business in four parts in the order of important.
1. Primary Responsibility.

First part is the Primary Responsibility of buisness. It is the economic responsibility by which the company mut produce goods or services that the society want and sell them at reasonable price and profit.
2. Legal Responsibility.

Second part is the legal responsibility by which a company should willingly and warranty follows the legal farm work.
3. Ethical Responsibility.

Third part is the ethical responsibility of buisness which a firm should follow. It is not codified by low but it is expected morally by the society.
4. Discretionary Responsibility.

Fourth part is the discretionary responsibility, by which a company has to contribute to development activities such as philanthopic contribution, training the hardcore unemployed, providing daycare facility etc... The difference between third and fourth part is that the ethical responsibility are accepted to be fulfill by all but only a few expect the warranty responsibility.

Arguments In Favor Of Social Responsibility.

1. Changed Public expectations Of Business.
One of the most important arguments for social responsibility is that public expectations from business have changed. Changed expectation from business demand that the business should fulfill them because the existence of business is due to society. Therefore, if business wishes to remain viable in the long run, it must respond to societys needs and give the society what it wants.

2. Better Environment For Business.

Another argument favoring social responsibility is that it creates a better environment for business. When business fulfills social responsibility life standards of community improve. The firm which is most responsive to the improvement of community quality of life will as a result has better community in which to conduct its business. So, the operations of business can be efficient in better environment. E.g. Labour recruitment becomes easier quality of employee is high, turnover and absenteeism reduces, etc

3. Public Image.
Public image of a firm fulfilling the social objectiveis improved. It results in more number of customers better employees, more response from money market supplier, etc A firm which seeks better public image should support social goals.

4. Avoidance of Government Regulation.

Government regulations are avoided by meeting the social responsibility because a firm already implements well in advanced whatever government expects to do. Thus, self discipline is the best discipline.

5. Balance of Responsibility with Power.

Balance of responsibility and power is embeded on business. It has vast social influence to affect economy, minorities and oter social problems. So, it can better fulfill the responsibility. Equal amount of social responsibility is required to match their power.

6. Business has vast resources.

Business has vast resources of man power skills functional expertise and money so that it can meet social responsibility more easily than non-profit organizations have failed to fulfill social responsibility but business has tried and succeeded. With this resources business is in a better position to work for social goals.

7. Prevention is Better than cure.

The principle that prevention is better than cure applies equally well to social responsibility also because a social problem left unsolved grows in dimention and results in breakdown and disturbances in business, hence reduction in efficiency. A problem sorted and attended in the initial stage can be solved easily and more economically.

8. Moral Responsibility.
It is moral responsibility of organization to fulfill the social responsibility because the evolution of many social problems has been due to industrialization and large scale operations. So when a firm is benefited from society, it should spare some resource for the society.

9. Duty of Gratitude.
Business units benefit from society. On the basis of the commonly accepted principle that one owes debts of gratitude towards those who benefit us, the corporation has certain debts that it owes to the society. Business corporation are also the part of society so, they should develop the society and express the felling of gratitude towards it.

Arguments against Social Responsibility.

Arguments against social responsibility are equally strong. Some arguments are as follows:

1. Profit Maximization.
Profit maximization is the main and most important objective of business. Surviving in business and making profit itself is the best way of fulfilling social responsibility. It need not be seprately fulfilled in any other different way. Business function is economic, not social. Economic values should be the only criteria used to measure success. Economic efficiency should be the top priority of any business other things shall come later.

2. Society has to pay the cost.

Society has to pay the cost of social responsibility and business has to fulfill only business costs. It is not necessary burden with the business by additional cost of social responsibility.

3. Lack of Social Skills.

Lack of social skills among business managers does not favor to take up social responsibility. They are not equally good as solving socila problems. Their outlook is

primarily economic and their skills are the same. Because a manager best at business operations need not be best at social matters. So, when social responsibility is entreated to such managers, their performance will be lower as compared to that of skill socialist.

4. Business has enough power.

Business has enough social power to dominate the society through its product and service. So if additional social responsibility is given to business it will be full constructive power of influence, which is not desirable. Business influence is felt throughout society. It is felt in education, in government, in the home and in the market place. Business is an institution which is considered to be not so good and giving more power to it is not advisable. All societies are now effected by corporate activities and adding social responsibility to business means making it much more powerful.

5. Social Overhead Cost.

Social overhead cost in fulfilling social responsibility some times reduces the profitability to such an extent that business is not able to meet even primary requirement or it may incurre loss. So it need not spend money for better future at the cost of present. It is the heavy social overhead cost which is one of the reasons for the dismisal (poor) performance of some of our government undertaking.

6. Lack of Accountability.
Another point of view is that the businessmen have no direct accountability to the people Therefore, it is unwise to give busineesmen responsibility for areas where they are not accountable. Business is accountable only for business operation and not for social responsibility so, it need not pay attention to such unaccountable causes. Accountability should always go with responsibility and it is poor social control to allow any other kind of arrangement.

7. Lack of Broad Support.

Business has lack of support from all grops of society in fulfilling social responsibility. Many times business has to have friction from opposition parties when social reforms are propagated by business. There is lack of agreement among the businessmen itself.

8. Economic and Legal ground.

Economic and legal ground state that business is meant for economic activities and it should not construct on other unrelated activity like social responsibility. Also business has low right to utilize the funds collected from investors for business

purposes, in any other purpose. If investors have to do any social work they can do on their own from the dividend or other income.

Business ethics
Ethics refers to a system of moral principles a-sense of right and wrong and goodness and badness of action and their motives and consequences. Business ethics to the application of ethics to business. To be more specific, business ethics is study of good and evil, right and wrong and just and unjust action of businessmen. Ethics is a discipline dealing with what is good or bad and right or wrong with moral duties and obligation.

SOURCES OF BUSINESS ETHICS

Manager in every society are influenced by three repositories of ethical values: religion, culture and law
Religion

One of the oldest of ethical inspiration is religion. The major religions converge on the belief that ethics is an expression of right and wrong in business and other areas of life. The worlds great religions are also in agreement on fundamental principles which are similar to the building blocks of secular ethical doctrine. The principle of reciprocity towards one fellow human beings is found in all major religions such as Hinduism, Buddhism, Christianity, Islam, Judaism, and Confucianism. The great religions advocate the necessity for an orderly social system and emphasize social responsibility in such a way so as to contribute to the general welfare.
Cultural experience

Culture refers to value, rules, and standards transmitted among generations acted upon to produce behavior that fall within acceptable limits. These rules and standard always play of the important part in determining values because individuals anchor their conduct in the culture of the group. The hunting and gathering stage of human development ,ethics was adapted to conditions in which our ancestors had to be ready to fight, face brutal foes and suffer the hostile forces of nature .society entered and industrial stage of cultural experience and ethical systems once more began evolving to reflect

the changing physical ,cultural, institutional and intellectual environment. Large factories and corporations, population growth, capitalist and socialist economic doctrine and technogies have all assaulted the ethical standards of the agrarian stage.

The legal system

Laws and rules of conduct, approved by legislatures that guide human behavior in any society. They codify ethical expectations and keep changing as new evils emerge. But law cannot cover all ethical expectations of society .laws are reactive new statues and enforcement always lag remaining, rarely does the business adhere to the rules. Consumers suffer causes misery to the society by damaging the environment, damaging the environment, discarding environment protection laws.

Why is ethics important

Ethics is important to business for several reasons as stated below

Ethics corresponds to basic human needs

It is a human trait that man desires to be a ethical; not only in his private life but also in his business affairs where, being a manager, he knows his decisions may affect the lives of thousands of employees. Moreover, most people want to be a part of an organization, which they can respect and publicity proud of, because they perceive its purpose and activities to be honest and beneficial to the society .most top managers would like o respond to this nee of their employees; and they themselves feel an equal need to genuinely proud of the company they are directing. There basic ethical needs compel the organizations to be ethically oriented.

Value create credibility with the public

A company perceives by the public to be ethically and socially responsive will be honored and respected even by those who have no intimates knowledge of its actual working .there will be an instructive prejudice in favor of its products, since people believe that the company offers value for money.

 Value gives management credibility with employees

Values are supposed to be a common language to bring leadership and its people together. Organizational ethics, when, perceived by employees as genuine, create common goals, value and language. The management has credibility with its employees precisely because it has credibility with the public. Neither sound business strategy nor a generous compensation policy and fringe benefits can win employees credibility ;and perceived moral and social uprightness can.

Values help better decision making

An ethical attitude helps the management make better decision, I.e., decisions which are in the interest of the public; their employees and the companys own long term goals even though decision making is slower. This is so because respect for ethics will force a management to take various aspects-economic, social and ethical in making decision.

Ethics and profit

Ethics and profit go together. A company, which is inspired by ethical conduct, is also profitable one. Value driven companies are sure to be successful in the long run, they may lose money.

Law cannot protect society, ethics can

Ethics is important because the government, law and lawyers cannot do anything to protect society .Technology develops faster than the government can regulate. A person is an industry often knows the dangers in a particular technology better than the regulatory agencies. Where law fails, ethics can success .An ethics oriented management takes measure to prevent pollution and protect workers health even before being mandated by law.

Ethical dilemmas
Several ethical dilemmas confront as manager. The ethical dilemmas stem from three sources; face to face ethics, corporate policy and functional-area ethics.

Face to face ethics:

These arise mainly because there is a human element transaction s .for example, a purchasing agent may develop personal relationship with the sales representative who sells supplies to a company; they frequently know one another on first name basis, have lunch together and talk often on the phone. A companys best customer may be well known to people in the production department. It helps to ensure that the companys products fit the customer need.

Corporate policy ethics

Companies are often faced with dilemmas that affect their operations across all department and division. Following conflicting situations are typical: 1. Your R&D department has modernized one of your products. It is not really new and improved but you know printing this statement on the package and using it in the advertisement will increase sales. What would you do? 2. You produce an anti-dandruff shampoo that is effective with one application. Your assistant says that the product would turn over faster if the instructions on the label recommended two applications. What would you do?

Functional area ethics;

Functional areas of business are likely to confront ethical issues. Accounting is a criteria function of any business. Managers, investors, regulating agencies, tax collectors and trade unions rely on accounting data to make key decisions. Honesty, integrity and accuracy are absolute requirements of the accounting function. Marketing is another area of the ethics issue. Pricing, promotions, advertising, product information, relations between ad-agencies and their clients and marketing research are potential area of ethical dilemmas.

Managing ethics

Top management
It is the chief executive officer who should take initiative in ensuring standards in his organization. In addition, management must avoid business adopting business strategies, schedules and reward systems that place unreasonable pressure on employees.

Ethics committees
Many companies have ethics committees to ethical issues. Such a committee can be a high level one comprising the board of directors, chaired by the CEO of the company. The committees field questions from employees help the company establish policy in new or uncertain areas, advice the board of directors on ethical issues and over the enforcement of the code of ethics.

Code of ethics
Codes of ethics have become popular. Codes vary from book length formulation to succinct statement, which is one or two pages, express a general philosophy for conflicts. Industry a associations too have evolved codes of conduct of their own. By leading private sector industrialist in India, adopted the following code of fair business practices. It provides guidance to manager and employees where they encounter an ethical dilemma. 1. To charge only fair and reasonable prices and take every possible step to ensure that the price to be charged to the consumer is brought to his notice. 2. To take every possible step to ensure that the agents or dealers. Do not charge higher price then fixed. 3. Not to produce or trade in spurious goods of standards lower than specified 4. Not to adulterate goods supplied. 5. To protect environment and natures infrastructure. 6. To ensure simple unambiguous warranty to customer. 7. Make accurate business record available for all authorized person. 8. To pay taxes and discharge other obligations without delay. 9. To pay free wages and treatment to employees.

 Ethics hot lines

In some companies, when employees are troubled about some ethical issue but may be reluctant to raise it with immediate supervisor, they can place a call on the companys hot line. A member of the ethics committee receives the confidential call and then quickly investigates the situation .Elaborate steps are taken to protect the identity of the caller, so as to encourage more employees to report any deviant behavior .

Ethics training programmers:

Nearly all companies which take ethics seriously provide training for their manager and employees. such training programmes a acquaint company personnel with the official company policy on ethical issues, and they show how those policies can be translate into the specific of every day decision-making .often ,simulate cases based on actual events in the company are used to illustrate how to apply ethical principles to on the job problems.

Ethics and law:

Law and ethics aim one thing defining proper and improper behavior.but the two are quite the same. law are a societys attempt to formalize-that is ,to reduce to written rules-ideas about what is right and wrong in various fields of life. Ethics deal with human dilemmas, which are beyond the formal language of law and the meanings are given to legal rules .A legal rule promotes behavior in organization by ensuring fair business practices. Various such rules are: 1. FEMA 2. Companies act-1956 3. MRTP ACT-1986 4. Consumer protection act-1986 5. Environmental protection act -1986 6. Essential protection act 1956, etc.

Consumerism

Meaning:
It is a movement to inform consumers and protect them from unfair practices. Movement focuses on inferior and dangerous goods, unfair business practices and false or misleading advertisement.

Utility of consumerism:
Consumers should accept consumerism as a means of asserting and enjoying their rights. Consumerism should succeed in making the business and the government more responsive to the right of the consumers. Well-organized and dynamic consumerism may be expected to produce the following results: (1)Producer and seller will not take the consumer for granted. When consumers are strong enough to protect their rights, the business will be compelled to shun unfair trade practices. (2)Consumerism will provide feedback for the business. IT will enable the producers to understand consumer grievances, needs and wants. (3)Producer will be able to enlist the support of consumers to minimize the imperfections of the distribution front. Several times the supply position is made worse by hoarding and black-marketing by traders.Further,many sellers have a tendency to charge a price which is higher than the actual by giving one or other reason.(This point indicates that consumerism is an opportunity for honest and dynamic firms. (4)Consumerism still makes the government more responsive to consumer interest, prompt it to take necessary, statutory measures, and make the required institutional arrangements to safeguard consumers rights.

Rights of consumers
For the first time in the history of consumer legislation in india,Consumer protection act,1986 extended statutory recognition to the rights of consumers,section6 of act recognizes the following six right of consumers:

1. Right to safety:
Right to safety, i.e.the right to be protected against the marketing of goods and services which are hazardous to life and property.

2. Right to informed:
Right to informed, i.e., the right to be informed about the quality, quantity potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer unfair trade practices.

3. Right to choose:
Right to choose means. It mans right to be assured, wherever possible access to a variety of goods and services at competitive prices. In cases of monopolices, say, railways.etc.it means right to be assured of satisfactory quality and services at a fair price.

4. Right to heard:
Right to be heard, i.e., the consumers interests will receive due consideration at appropriate forums. It also includes right to be represented in various forums formed to consider the consumers welfare.

5. Right to seek redressal:

It means the right to seek redressal against unfair practices or restrictive trade practices or unscrupulous exploitation of consumers. It also include right to fair settlement of the genuine grievances of the consumers.

6. Right to consumer education

It means the right to acquire the knowledge and skill to be an informed consumer.

Consumer protection act, 1986

Meaning
Consumer Protection Act provides a system for the protection of consumer rights and the redressal of consumer disputes.

Objective of consumer protection act

1. To provide fair and better protection of interest

2. To make provisions for the establishment of consumer councils and authorities for the settlement of consumer disputes and for the matters connected there with.

Extent /scope of consumer protection act

The CPA has been amended in 2002, extends coverage over the following: (1)The act covers all the sectors whether private, public or cooperative. (2) The law is applicable to all kind of goods and services except those, which are specifically exempted by the central government. (3) The provisions of the act are compulsory in nature. (4) The act envisages (visualize) establishment of consumer protection councils at the central and state levels, whose main objects is to protect the right of the consumers. (5) The provisions of this act are in addition to and not in derogation of the provisions of any other law currently in force.

Relief available to consumers

Depending on the facts and circumstances, the redressal forums may pass an order for one or more of the following relief in favor of consumer: (1) Removal of defects from the goods. (2) Replacement of the goods. (3) Refund of the price paid. (4) Awards of compensation for the loss or injury suffered. (5) Removal of defects or deficiencies in the services. (6) Discontinuance of unfair trade practices or restrictive trade practices or direction not to repeat them. (7) Withdrawal of the hazardous goods from being offered for sale. (8) Awards of adequate costs to parties.

Consumer protection councils

The consumer protection act, 1986 as amended in 2002 provides for constitution of consumers protection councils at the Central, State and District levels.

(1)central consumer protection council

Establishment:

The central government shall establish, by notification, a council to be known as the Central Consumer Protection Council.
Membership:

The central council shall consists of the following members, namely (1) The Minister in charge of the consumer affairs in the Central Government ,who shall be its Chairman and (2) Such number of other official or non- official members representing such interest as may be presented. For e.g.: Ministers of food and civil supplies or Ministers in charge of consumer affairs in states. According to rule 3 of the consumer protection act, the central council shall consist of 150 members.

Any member may, by writing under his hand to the chairman of the central council resign from the council; the vacancies so caused or otherwise shall be filled from the same category by the central government. The person shall hold office so long as the member whose place he fills would have been entitled to hold office, if the vacancy had not occurred.

Procedure For the meeting of central council

The Central Council shall meet as and when necessary and at least one meeting of the Council shall be held every year.
Objectives of the central council(sec.6)

The objective of the central council shall be to promote and protect the rights of the consumers such as: (1)The right to be protected against the marketing of goods and services which are hazardous to life and property.

(2) The right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumer against unfair-trade practices. (3) The right to be assured, wherever possible access to a variety of goods and services at competitive prices. (4) The right to be heard and to be assured that consumers interest will receive due consideration at appropriate forums. (5) The right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers (6) The right to consumer education. The central council shall give wide publicity to the right of the consumers and the consumer disputes redressal agencies and procedure of filing complaints therein through television, radio, newspaper and magazine to give importance to consumer movement in the country.

(2)the state consumer protection council

Establishment:

The state government shall by notification establish with effect from such date as it may specify in such notification a council to be known as the consumer protection council.
Membership:

The state council shall consist of the following members namely (1) The minister in charge of consumers affair in the state government who shall be its Chairman (2) Such number of other official or non-official members representing such interest as may be prescribed by the state government (3) Such number of other official or non-official members not exceeding 10, as may be nominated by the central government.
Meetings:

The state council shall meet as and when necessary but not less than 2 meetings are held every year.

Objectives of the state council:

The objects of every state council shall be to promote and protect within the state, the rights of the consumers laid down in sec.6.

(3)the district consumer protection council

The state government shall establish for every district by notification a council to be known as the district consumer protection council with effect from such date as it may be specify in such notification. The district consumer protection council shall consist of the following members namely: (1) The collector of the district, who shall be its chairman (2) The state government may prescribe such number of other official and nonofficial members representing such interest.
Meetings:

The district council shall meet as and when necessary but not less than two meetings shall be held every year.
Objectives of the district council:

The objects of every district council shall be to promote and protect within the district the rights of the consumers in clause (a) to (1) of sec.6.

THE REDRESSAL SYSTEM

The act envisages three-tier quasi judicial machinery at the National, State, and District levels.

(1)

District consumer dispute redressal forum

District consumer dispute redressal forum popularly known as district forum consist of one president and two other members. The president is a person who is or has qualified to be a district judge nominated by the state government and the two other members, one shall be a person from education, trade or commerce and a lady social worker. The district forums deal with complaints involving costs and composition less then Rs.20 lakh.At present there are 604 district forums functioning in India.

(2)

State consumer dispute redressal forum

State consumer dispute redressal forum known as state commission is next in the hierarchy of consumer redressal forum under CPA. State commission consists of a president and two other members. The president is a person who is or has been a judge of a High Court and two other members, one who shall be person of ability, integrity and standing and has adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, laws, commerce, accountancy, industry, publics affairs or administration. One of whom shall be a woman, provided that every appointment made under this clause shall be made by the state government on the recommendation of a selection committee consisting of the following, namely: (A) President of the state commission-Chairman (B) Secretary of the law department of the state-Member (C) Secretary in charge of department dealing with consumer affairs in the stateMember State commission deals with complaints involving cost and compensation higher than Rs.20lakh and less than Rs.1crore. There are 35 state commissions.

(3)

National consumer dispute redressal forum

National consumer dispute redressal forum popularly known as National Commission is the top most layer in the three level hierarchy of the consumer forums. It was constituted in the year1988. The national commission consists of the president and four other members. The president should be one who is or has been a judge of the Supreme Court and the members should be persons of eminence in economics, laws, commerce, accountancy, industry, publics affairs or administration. The national commission deals with complaints involving costs and compensation higher than Rs.1 cr.