Social Audit & Ethics

Social Audit

A social audit is a systematic study and evaluation of the organization's social performance as distinguished from its economic performance.

Benefits of Social Audits

1)   Supplies data

2)   Develops a sense of social awareness

3)   Cost of social programmers

4)   Necessary information to externals groups

Limitations of Social Audits

1)   Difficult to measure

2)   Classification under “good” or “bad” is not universally accepted

3)   Most of them occur outside the organization

Ethics

The credibility of a business depends on its high business ethics and integrity

How does a manager decide what is ethical or unethical?

1)   Government legislation

2)   Business codes

3)   Pressure groups

4)   Personal values of the manager

Ethics and Corruption in International Business

On an international scale, it is difficult to clearly define what constitutes corrupt business practices.

Although there exist more than 40 codes of conduct worldwide but the observance of these codes being voluntary and not legally enforceable, MNEs differ in their approach.

Studies have shown that developing and transitional economies are more prone to corruption partly because of the inadequate legal framework, weak enforcement and lack of open and independent media.