Strategic Management: Formulation and Implementation

The Social Responsibility Audit

Keith Davis and Robert Blomstorm define the social audit in this manner:

A social audit is a systematic study and evaluation of an organization's social performance, as distinguished from its economic performance. It is concerned with possible influences on the social quality of life instead of the economic quality of life. The social audit leads to social performance.

They have listed several positive purposes and benefits to be obtained from a social audit:

  1. It gives management the information it needs to evaluate the affectiveness of programs related to affirmative action, ecology, community development, and the like.
  2. Since managers tend to direct attention to those activities for which reports and evaluations are required, the existence of a social audit tends to promote active concern for meeting social performance goals.
  3. It provides information that enables management to compare the relative effectiveness of different social programs.
  4. It enables management to provide information to external groups that make demands on the firm for social performance.

Howard Bowen proposed the social audit of company be conducted every five years by a high level independent group of disinterested auditors. The auditor's report would evaluate the company and make recommendations.

To help evaluate how well as company is doing in the areas of social responsibility, Table 4-2 has been developed as preliminary guide. Based on the results of this basic evaluation, the company can see what and where improvements can be implemented.