MGT353 - Chapter 07

Help businesses know what is happening within their

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Unformatted text preview: eholders think about and want from the business 3. Tell stakeholders what the business has achieved 4. Strengthen the loyalty and commitment of stakeholders 5. Enhance the organization’s decision making 6. Improve the business’s overall performance 7-15 Figure 7.2 Global Social and Environmental Audit Standards 7-16 The Auditing Process Companies have several choices in carrying out an audit Internal audit: company hires and trains its own staff of auditors whose job is to inspect factories—either its own or those operated by contractors—to determine whether or not they are in compliance External or third-party audit: company hires another organization to carry out the audit and report back to the company Crowd-sourcing audit: company gathers information directly from workers using their mobile phones 7-17 Social and Environmental Reporting When a company decides to publicize information collected in a social audit, this is called corporate social reporting When companies clearly and openly report their performance—financial, social, and environmental—to their various stakeholders, they are acting with transparency The term transparency refers to a quality of complete clarity; a clear glass window, for example, is said to be transparent 7-18 Figure 7.3 Trends in Corporate Social Reporting 7-19 Triple Bottom Line Bottom line refers to the figure at the end of a company’s financial statement that summarizes its earnings, after expenses Occurs when companies report to stakeholders not just their financial results—as in the traditional annual report to shareholders—but also their environmental and social impacts Firms in Europe have more quickly accepted triple bottom line than have those in the United States 7-20 Assignments Read Chapter 8 Read Chapter 9 You will Receive a Paper Assignment on Thursday 7-21...
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