All of the factors mentioned above are connected with the economic performance of
the organisation. A popular view which is gaining a degree of acceptance in the business
world is that (as well as the traditional measures of economic performance) the organisation
should be concerned with much wider issues of social performance. Stakeholder
theory, as mentioned previously, implies that there are many groups with very diverse
interests in the activities of the organisation.8 The actions of the organisation might
impact upon the environment in terms of pollution or the local community in terms of
employment opportunities or quality of life. So firms contribute to social welfare as well
as economic welfare and a measure of social performance would encapture this. This
might be done through a social audit which would look at the costs and benefits of an
organisation’s activities to society as a whole. The social audit would include many factors
like the impact on the environment and the local community as well as measures
such as profitability and productivity (see, for example, Chapter 14).