Business / Government As A Stakeholder
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Autor: anton 03 March 2011
Words: 654 | Pages: 3
The need for consumer protection has increased in recent years because of globalisation of world markets. This is because goods and services from around the world can be easily sold in other countries. For example consumers in the UK may need protection from goods and services from abroad as they may not be to a sufficient quality as safety standards may be lower.
The growth of the internet has also caused the need for protection to increase as it is largely unregulated so goods and services may be undelivered.
Customers sometimes have to give out their credit card details, which can lead to uncertainty. Customers may also be a target for Spam e-mail from companies that they are uninterested in.
The increasing complexity of many goods and services also causes the need for government protection to increase as technological advances in particular, have increased the gap between the knowledge of consumers and producers about products. Therefore consumers will be unable to truly assess the quality of the product, which could cause the producer to manipulate them.
The environment which businesses operate within is also becoming increasingly competitive and is believed that this degree of competition encourages business to take advantage of customers e.g. by reductions in the level of services or in the level of goods offered.
The disposable income of many consumers has increased greatly over the last four to five decades. This means that the average consumer purchases far greater quantities of good and services than would have been the case in the past. Therefore more protection may need to be offered to consumers as a result.
Scientific advances have created a variety of materials that were not previously available. E.g. genetically modified products have developed as a consequence of scientific advances in the production of foods. Consumers may need to be protected against any possible harmful effects of such scientific discoveries.
One example of how consumers are safeguarded through legislation is through the weights and measures act. These are designed to prevent the sale of underweight or under volume products. E.g. they make it an offence to use false or unfair weighing equipment or to give short measures. All prepacked goods must have information about the net quantity of their contents. The acts also give inspectors the power to test weighing and measuring equipment.
Another is the trade descriptions act which prohibits false or misleading descriptions of goods or services. For example a pair f shoes which are made of leather cannot be made of plastic.
The consumer safety act was also passed in order to prevent the sale of goods which might be harmful to consumers. It concentrates, in particular, upon safety matters relating to childrenâ€™s toys and electrical goods.
The effect that consumer protection has had on businesses is that it has increases in costs. This is because improving the safety of a good can increase the cost. E.g. an electrical firm producing lamps may find that its product contravened legislation.
Therefore the firm would have to change or improve the components or redesign the lamp itself. This would increase the firms cost.
Firms have also needed to improve their quality control procedures as a result of legislation. E.g. firms involved in bagging or packaging goods must ensure that the correct quantities are weighed out. Failure to do so could result in prosecution. In addition, businesses must be careful not to sell substandard or damaged products.
Many businesses now have a customer service or customer complaints department to deal with customers. These allow firms to deal with problems quickly and efficiently, dealing with problems before the customer turns to the legal systems.
As a business attempts to ensure that customers are treated fairly by a business may place pressure on it to become more market orientated. The firm would attempt to ensure that it is actually meeting the needs of those people it is attempting to serve. Such as change, for example, may lead to greater use of market research.
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