COST AND BENEFITS:Basis of social audit, Objectives of social audit

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Business Ethics MGT610

LESSON 30

COST AND BENEFITS

The problems involved in getting accurate measurements of the benefits and costs of pollution

control are also illustrated by the difficulties businesses have encountered in trying to construct

a social audit (a report of the social costs and social benefits of the firm's activities). This can

be difficult, however. How do we measure the costs and benefits of pollution control when they

involve damages to human life or health? Measurement itself is also difficult when the effects

of pollution are uncertain and therefore hard to predict. In fact, getting accurate pollution

measurements is sometimes nearly impossible, and the problem only is multiplied when there

are a number of polluters in a single area. Measuring benefits is likewise difficult, which poses

significant technical problems for utilitarian approaches to pollution.

Even where measurement is not a problem, another problem remains for the utilitarian

approach. Is it morally permissible to impose costs on unwilling or unknowing citizens? Can

some unilaterally impose costs on others without their consent? Even getting consent is tricky,

because many pollution problems involve information and risks that are extremely technical

and difficult to understand. It is perhaps impossible in principle to get informed consent from a

segment of the public on some complicated issues.

Because of these problems, some contend that utilitarianism cannot lead our pollution control

policy. Perhaps absolute bans on pollution are more adequate. Some writers even suggest that

when risk cannot be reliably estimated, it is best to steer clear of such projects. Others maintain

that we should identify those who will bear the risks and take steps to protect them.

It holds that until those patterns of hierarchy and domination are changed, we will be unable to

deal with environmental crises. In a system of hierarchy, one group holds power over another

and members of the superior group are able to dominate those of the inferior group and get

them to serve their Many thinkers have argued that the environmental crises we face are rooted

in the social systems of hierarchy and domination that characterize our society. This view, now

referred to as social ecology, ends.

Until these systems (such as racism, sexism, and social classes) are changed, we will be unable

to deal adequately with the environment. Eco-feminists, a related group of thinkers, see the key

form of hierarchy connected to the destruction of the environment as the domination of women

by men. They believe that there are important connections between the domination of women

and the domination of naturepatterns of thinking, which justify and perpetuate the

subordination. This logic of domination sets up dualisms (artificial and natural, male and

female) where one of the pair is seen as stronger and more important. To solve our ecological

problems, we must first change these destructive modes of thinking.

According to the ethics of caring, the destruction of nature that has accompanied male

domination must be replaced with caring for and nurturing our relationships with nature and

other living things. Nature must be seen as an "other" that must be cared for, not tamed or

dominated. Thought-provoking as these approaches are, they are still too new and undeveloped

to give us specific direction.

Business Ethics MGT610

Basis of social audit

Social audit as a term was used as far back as the 1950s. There has been a flurry of activity and

interest in the last seven to eight years in India and neighboring countries. Voluntary

development organizations are also actively concerned.

Social audit is based on the principle that democratic local governance should be carried out, as

far as possible, with the consent and understanding of all concerned. It is thus a process and not

an event.

What is a social audit?

A social audit is a way of measuring, understanding, reporting and ultimately improving an

organization's social and ethical performance. A social audit helps to narrow gaps between

vision/goal and reality, between efficiency and effectiveness. It is a technique to understand,

measure, verify, report on and to improve the social performance of the organization.

Social auditing creates an impact upon governance. It values the voice of stakeholders,

including marginalized/poor groups whose voices are rarely heard. Social auditing is taken up

for the purpose of enhancing local governance, particularly for strengthening accountability and

transparency in local bodies.

The key difference between development and social audit is that a social audit focuses on the

neglected issue of social impacts, while a development audit has a broader focus including

environment and economic issues, such as the efficiency of a project or program.

Objectives of social audit

1. Assessing the physical and financial gaps between needs and resources available for

local development.

2. Creating awareness among beneficiaries and providers of local social and productive

services.

3. Increasing efficacy and effectiveness of local development programs.

4. Scrutiny of various policy decisions, keeping in view stakeholder interests and

priorities, particularly of rural poor.

5. Estimation of the opportunity cost for stakeholders of not getting timely access to public

services.

Advantages of social audit

(a)

Trains the community on participatory local planning.

(b)

Encourages local democracy.

(c)

Encourages community participation.

(d)

Benefits disadvantaged groups.

(e)

Promotes collective decision making and sharing responsibilities.

(f)

Develops human resources and social capital

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