Corporate Social Responsibility - Would the model mean that Fannie Mae could be labeled an “honest” company? Why or why not?

Would the model mean that Fannie Mae could be labeled an “honest” company?  Why or why not?

   “During the Great Depression, as borrowers defaulted on mortgages and banks found themselves strapped for cash, President Franklin D. Roosevelt and Congress created Fannie Mae in 1938 in order to buy mortgages from lenders, freeing up capital that could go to other borrowers.  Fannie Mae grew so large over the years that in 1968, with the pressures of the Vietnam War straining the national budget, President Lyndon Johnson took Fannie Mae's debt portfolio off the government balance sheet…” (Pickert, 2008).  Fannie Mae is not an honest company, they do not comply with the United States Government rules and regulations, it seems that they decide to do what they want at anytime and no one can tell them what to do.  During an incident with the Securities and Exchange Commission (SEC), they wanted to get Fannie Mae to register their securities as many other organizations had done in the past but there were a few Congress persons that came out of the woodwork to rally around Fannie Mae and the SEC dropped the request for registration (Jennings, 2012, p. 129).

     Fannie Mae on its’ website describes themselves as a legitimate company who are honest and is there for the families that are not able to purchase a home and to all the other individuals that need assistance to keep their homes from being taken away from them due to not being able to pay their mortgage on time.  The company might have been an honest firm at one time but it seems that since the late 1990s until 2008 the company has been risking lots of money on bad investments and not complying with the laws of the United States Government.  It seems that the personnel at the very top of Fannie Mae’s organization should be concerned about the welfare of the firm and would look out for the companies’ best interest.  That was not the case here as for the personnel that have been in charge were more concerned about their next big bonus than what Fannie Mae really stood for, the company is not ethical at all by any means.

References

Jennings, Marianne M. (2012).  Business Ethics, Case Studies and Selected Readings.  Seventh Edition.

Pickert, Kate. (2008, July).  A Brief History of Fannie Mae and Freddie Mac.  Retrieved from Time, Business & Money.  http://www.time.com/time/business/article/0.8599.1822766.00.html

Corporate Social Responsibility - Entine and Jennings' eight questions...

What is the difference between Entine and Jennings’ eight questions and traditional measures of social responsibility?

      As Jon Entine and Marianne Jennings state that in this day in age companies cannot afford not to comply with the laws of the land if they want to stay afloat in business.  If the companies want to continue on selling their products to their loyal customers and any newer customers at that, they need to continue to do great and wonderful strides in not to destroy the environment as many companies have done in the past.  Both Entine and Jennings have described that if the companies are stating that they are helping the environment they are wonderful for the customers that they are serving.  With this is mind, many consumers will purchase items that state no animals were harmed in the process of making their products which they are about to purchase (Jennings, 2012, p. 102).  During the accomplishments of the firm going “green”, everyone is happy to include the owners, shareholders and everyone that is concerned since they are all making lots of money which is always a good thing for the firm.

     Yvon Chouinard and his spouse Malinda stated from the beginning when forming their business of Patagonia in the early part of the 1970s they would run it on their terms and not how other business owners run their companies.  They will not release chemicals into the environment “or chase endless growth. It wouldn't make disposable crap that people didn't really need.  Anything it produced would be of the highest quality, manufactured in the most responsible way.  If an employee's child was sick, the parent would also be where he ought to be: at home.  They would keep Patagonia privately held and say no to anything that compromised their values” (Casey, 2007).

     Entine and Jennings speak of a soul within the company, in reality there is no soul but many individuals that makeup a company in which these individuals run the internal parts of a well oiled machine this is the real soul of the company.  Without the people the company would not exist, survive and function as a live person.  In many ways, the owners of the companies need to understand that they only survive as long as employees work for them honestly and believe that they are really contributing to the environment and society.

                                                                      References

Casey, Susan (2007, May).  Patagonia: Blueprint for green business.  The story of how Patagonia founder Yvon Chouinard took his passion for the outdoors and turned it into an amazing business.  Retrieved from CNN Money, Fortune  http://money.cnn.com/magazines/fortune/fortne_archive/2007/04/02/8403423/
index.htm

Jennings, Marianne M. (2012).  Business Ethics, Case Studies and Selected Readings.  Seventh Edition.

Corporate Social Responsibility - Contrast the Entine & Jennings with those of Friedman & Freeman

Contrast the Entine and Jennings views with those of Friedman and Freeman

     Corporate Social Responsibility is an umbrella rubric for a variety of organizational practices that are intended to serve stakeholders beyond the firm’s owners, including employees, customers, communities, and society at large (Chin, Hambrick and Triviño, 2013, p. 202).  Milton Friedman states he believes that business’s are here to make money and to provide a service and a product to the average person.  He also states that individuals, corporate executives, that run the corporations in which the stockholders are relying on for their best interest to make money, can handle the companies funds but in doing so that person must handle the funds correctly to make proper investment for the firm.  If that individual handles the funds wrongly than the company and stockholders will loss great amount of money.  The whole justification for permitting the corporate executives to be selected by the stockholders is that the executive is an agent serving the interests of his principal (Friedman, 1970).

     Jon Entine and Marianne Jennings states, that corporation need these days to be conservative and protect the environment since this is the best interest for all parties concerned.  Corporations cannot do what have been done in the past to neglect the environment and take what they need to produce a product for the consumers.  Entine and Jennings states that corporate social responsibility is everyone’s business and we all need to worry about it since it deals with everyone on this planet we all need to be considerate with the environment.

     Edward Freeman states that when he was a young lad his father was showing him that he was filing an expense report and how it was easy to cheat.  His father knew it was the wrong thing to do, this is when Freeman knew what he wanted to be when he grew up which obtained his interest was to learn about business in ethics he states that this is a contradiction in terms.  He states that everyone needs to understand ethics and that this is the way to go in business.

     All four scholars mention in one way or another that each of their views are important for everyone and that we all need to work together and make things right for ourselves and the environment.

                                                                          References

Chin, M.K., Hambrick, Donald C. and Triviño, Linda K. (2013, June).  Political Ideologies of CEOs: The Influence of Executives’ Values on Corporate Social Responsibility.  Johnson Cornell University.  Administrative Science Quarterly 58 (2)197-232, doi: 10.1177/0001839213486984

Darden School of Business (2013). University of Virginia.  http://www.darden.virginia.edu/web/Faculty-Research/Directory/Full-time/R-Edward-Freeman/

Friedman, Milton (1970, September).  The Social Responsibility of Business is to Increase its Profits.  The New York Times Magazine.

Jennings, Marianne M. (2012).  Business Ethics, Case Studies and Selected Readings.  Seventh Edition.