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Unit 1.3 - Social Auditing

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tara chahine

on 3 October 2013

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Transcript of Unit 1.3 - Social Auditing

Unit 1.3 - Social Auditing
Social Auditing
Whats a Social Audit ?

A Social Audit is an independent assessment of hows a firms actions affect society.
A Social Audit looks at factors such as a company's record of charitable giving, volunteer activity, energy use, transparency, work environment and worker pay and benefits to evaluate what kind of social and environmental impact a company is having in the locations where it operates.
Social audits are optional--companies can choose whether to perform them and whether to release the results publicly or only use them internally.

Social Auditing
-The Audit is likely to include a review of a firms:
Environmental Impact - such as pollution and waste levels
Staff Management - such as workforce health and safety
Contributions to Society - such as involvement in local community projects
Environmental Impact
- Apple is a perfect example of environmental impact. Apple-led factory conducted a total of 393 audits, including 55 specialized environmental audits.
- For people who have apple products they dont use anymore, they can take these products to an apple store and they will reuse the parts of your product that can still fully function.
- Apple reduced iphone packaging by 28 percent from 2007, they also ship 60 percent more boxes in each airline to reduce the amount of airplanes used to ship products to their units.
- Apple works with environmentally conscious materials including recycled plastics, recycles paper, biopolymers and vegetable based ink.
- in 2012 apple global recycling exceeded their 70 percent goal.
- The main reason why most business employ in Corporate Social Responsibility(CSR) is to enhance their corporate image and reputation.

-Social Auditing is a way to ensure that socially responsible objectives are being applied.
Example of Social Audit
Walmart Audits
Factory prequalification is required for factories of suppliers managed by Walmart Global Sourcing or Direct Sourcing Group where Walmart is the importer of record. To be approved, a factory must receive one of Walmart’s two highest assessment ratings. Subcontracting factories must also be audited if they produce part or a component of a product, containing a Walmart private label or proprietary brand logo, including, but not limited to, a major component of a finished product that could be sold independently
Contributions to Society
- kroger, the largest grocery store chain in america, was the only corporation to give more than 10% of its previous years profits in charity 2010. Giving 64 million dollars to charity.

-in 2010, goldman sachs was one of the only two corporations to give more than 300 million to charitable causes,

- in 2010 wal mart gave 319 million dollars to combat hunger, and also promoting charitable donation through its "12 days of giving" campaign.
Staff Management

Ikea employes “management goes with an open door policy and make themselves available to listen to co-workers’ concerns and requests, almost all the time. work and life balance is understood and repected here.” – IKEA cales co-worker (Covina, CA)

Apple employes “ really great products to work on, exciting opportunities and smart interesting people to work with.” , “the work you do changes the worl. love it or hate it, people know about your work. that’s more than most can dream for” – Apple employer ( Cuperino, CA)

In-N-Out burger “ in n out takes pride in the employees and product. they provide a great first job as well as room for growth. They hold monthly meetings and show case outstanding employees” In n our burger employee (san deigo, CA)

Policies that Deal with its impacts on Society
Example: To devise Corporate Social Responsibility Policies

using renewable and sustainable resources
using reputable and socially responsible suppliers
systems that cater for the well-being of employees
establishment of an ethical code conduct, e.g. integrity of marketing practices
methods to monitor management and employee commitment to CSR policies
Social Auditing
Environmental Audit: Is an independent review of a firms activities the examines only the impact on the environment
Many firms use social audits as a way to reassure their stakeholders that they are doing the 'right thing'
firms employ an independent agency to evaluate the extent which a business has followed policies and the impact it has made on society
The Auditors will provide firms with:
written feedback (disadvantages and advantages ) on the effectiveness of the firm in meeting the Corporate Social Responsibility
Identify areas that are in need of attention
Make Several Recommendations
Potential limitations of using Social Audits
1- The business must have sufficient financial and other resources to satisfy any recommendations made in the audit. This will allow any organizations to resolve any problems

2- The information of the audit may not be positive and this can publicize the weakness of a a business. this will corrupt the image and reputation a business has grown over years.
Question 1.3.5 Case Study
MySpace is a highly popular internet-based social network for sharing photos, blogs and digital media. users can leave messages for anyone and everyone to see. Despite being founded only in 2003, it has grown to become one of the most visited websites in cyberspace.
Despite its popularity MySpace has been condemned for its lack of social responsibility. Critics have claimed that MySpace is a forum for sending spam (unsolicited and time wasting messages). Security and privacy matters are also an issue. For example, celebrity Paris Hilton had her personal email posted on MySpace and was inundated with messages from fans. In April 2007, gatecrashers wrecked a house in Country Durham, UK after having seen an invitation to a party held there. Child safety and legal obligations (such as copyright laws) have also caused problems for MySpace
Question 1.3.5 Case Study
a) Define Social Auditing in the Context of MySpace and outline the details that might appear in a social audit.
b) To what extent should firms such as MySpace pay attention to their social responsibilities?
Question 1.3.5 Case Study
b) MySpace paying attention to their social responsibilities include:

• An improved corporate image/reputation, especially as there is an increase in the awareness and expectations of social responsible behavior of internet-based firms
• Helps motivates employees by raising their self esteem because they are working for a socially responsible organization; this can lead to increased productivity and lower labor turnover
• May help to attract high-calibre and highly motivated staff
May help to attract investment for growth and expansion
• Aids decision making at MySpace which operates in a highly competitive and fast-changing business environment

Case Study Answers
a) Social auditing is the process of using conducting an independent assessment of how a firms activities affect employees, the environment and society in general. The social audits are than used by firms to keep the policies in place, so it would deal with the impacts it has towards society in general
Examples: legal obligations (such as copyright law) that have caused problems for MySpace

Details that might appear in a Social Audit
Ethical Marketing e.g. filtering of advertisement spam
Devotion to legal restrictions on business activity e.g. copy rights
Treatment of Employees
Involvement in donations (charitable)
Community involvement
Degree of commitment to recycling waste
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