Entine and Jennings’ Eight Questions Vs. Traditional Measures of Social Responsibility

In traditional measures of social responsibility “businesses profit by being responsive to society and its needs” (Jennings, 2012, p. 112) whereas Entine and Jennings views creates a ‘soul’ perspective of the organization.  By ‘soul’ perspective Entine and Jennings basically have the idea that an organization should only participate in the bare minimum in order to comply with the law, stay honest and forthcoming, treat their employees well, and its charities.  Traditional ways of social responsibility pretty much focus on one groups benefits and generally for the purpose of creating the most profits for the owner or shareholders.  Entine and Jennings focuses on the whole society and organization as one entity and in order to complete the cycle each portion that makes up the society and organization must equally benefit in order to succeed.  Entine and Jennings states the need for an organization to be honest and forthcoming with information that is of importance to the employees and society, whereas some traditional measures would only allow information to be released if it was forced to do so in order to keep a company shareholders pockets more heavily lined.  Traditional measures generally used a balanced scorecard that measured its social responsibility by four perspectives;

• Financial perspective – how does the firm look to shareholders?

• Customer perspective – how do customers perceive the firm?

• Internal business perspective – what must the firm excel at?

• Innovation and learning perspective – can the firm change and improve to make its vision come true? (Aras & Crowther, 2010, p. 93)

By Entine and Jennings standards these four perspectives do not meet the qualifications of ‘social’ respnsibilities, and even Aras and Crowther state that “the balanced scorecard fails to incorporate environmental and social aspects of an organisation”, however they mention that “Figge et al. (2002) suggest that their concern with the balanced scorecard is that the logic of all the four perspectives are ‘almost exclusively in the economic sphere’ (p. 274)”. (Aras & Crowther, 2010, p. 95)  Entinte and Jennings has a more rounded view of how to determine an organizations social responsibility by defining its ‘soul’.  These eight questions that make up the characteristics of an organizations soul per Entine and Jennings;

Questions to ask:

• Does the company comply with the law?

• Does the company have a sense of propriety?

• How honestly do product claims match with reality?

• How forthcoming is the company with information?

• How does the company treat its employees?

• How does the company handle third-party ethics issues?

• How charitable is the company?

• How does the company react when faced with negative disclosures?

Found on page 104 of:

Jennings, M. (2012). Business ethics: Case studies and selected readings. Australia: South-Western, Cengage Learning.

Entine and Jennings’ Views in Contrast with Friedman and Freeman

After reading the articles by Milton Friedman, R. Edward Freeman, Jon Entine and Marianne M. Jennings I have come to the conclusion that all deem it favorable for organizations to “devote resources to providing amenities”(pg 94) for the community in which the organization resides.  Freeman’s views are characteristic to the old saying ‘pat my back and I’ll pat your back’ meaning that an organization must contribute to the overall well-being of a community for the community to support the organization.  “The local community grants the firm the right to build facilities and, in turn, benefits from the tax base and economic and social contribution of the firm.” (Jennings, 2012, p. 100)  Friedman only advocates social responsibility if it “(a) makes it difficult to recruit and retain employees; or (b) offers the prospect of adverse publicity or litigation that diminishes its ability to compete” (Jennings, 2012, p. 102-103). Entine and Jennings mention that “business and business ethics are much more complex than the breeziness of social responsibility” (Jennings, 2012, p. 102), so Entine and Jennings are on the same page with Friedman that the social responsibilities need to be monitored closely.  It appears that Entine and Jennings feel that businesses can get too carried away with helping the community to the point where the organization will suffer because they have been blinded to the health of the organization by ‘beefing up’ the communities health.  If an organization is not careful they will give away all of their profitable resources and this will in turn hurt the employees of the organization which will also contribute to the downfall in the health of the community.  Organizations and communities need each other in order to maintain a healthy presence.  Organizations have the free will to the extent it will help the community and while helping the community will help their organization helping the community too much will harm both the community and the organization.  Entine and Jennings are correct when they say that social responsibility is a very complex portion of an organizations survival, it has to be approached with statistics and careful planning in order to create benefits for the organization and community alike.

References

Jennings, M. (2012). Business ethics: Case studies and selected readings. Australia: South-Western, Cengage Learning.