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Society gets upset when the social cost of or for that matter any business exceeds the
social benefit derived from the business. Over the years since the dawn of industrial
revolution and particularly after the 1950s, the activities of the corporations have been
increasingly affecting the society by way of environmental pollution which include air,
water and sound, ozone depletion and overcrowding on account of unplanned
industrialization society expect corporation to limit activities which produce harmful
effects and correct the problem that are a result of their previous actions. Social reaction
to mindless industrial activity gave rise to the concept of corporate social responsibility.
Over the years, it has become obvious that the desire to make a fortune must be executed
within the laws of the society. During the 1960s, social activists and environmental
groups campaigned for a broader notion of corporate social responsibility. The clash
between the economic operation of businesses and the changing social values brought
questions of social responsibility to the fore-front. The economic performance of business
and the social aspects of business behavior were found to be divergent. In order to
enforce corporate social responsibility, in the United State government bodies such as the
Protection Agency, the Equal Employment Opportunity Commission, the Occupational
Safety and Health Administration, and the Consumer Product Safety Commission were
set-up. These bodies saw to it that national public policy recognized the environment,
employees, and consumer to be significant and legitimate stakeholders of business.
Corporate should help solve some of the social problem because businesses are
influenced by the society through government policy and business thrive or starve along
with the society.
SOCIAL AUDIT :–
A social audit identifies social issues in which a corporation should be
involved, examine what an organization is actually doing with regard to social
issues and determine the performance of the organization in the realisation of
social work. Social audit is a statutory requirement in European countries like
Germany, France, Spain & Norway. However, it is voluntary in the United States.
The measurement of social performance of corporation was first attempted by
Theodore Kreps. However, Clark Abt used the term ‘social audit’ for the first
time in his work ‘Audit for Management’. Any project or programme
implemented for generating social benefits can be subjected to social audit. The
following social are the benefits of social audit:-