The difference in Entine and Jennings' eight questions and traditional measures of social responsibility...

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

The differences between the eight questions and traditional measures needs to be examined first by determining what it appears that each of the eight questions' purposes is.

1. Does the company comply with the law? This keeps the company legally protected.
2. Does the company have a sense of propriety? This assures that the company is aware of right and wrong.
3. How honestly do product claims match with reality? This measures the product.
4. How forthcoming is the company with information? This measures the company desire to be communicative.
5. How does the company treat its employees? This measures the human means of production.
6. How does the company handle third-party ethics issues? This measures the company recognition of third-party stakeholders.
7. How charitable is the company? Measures company willingness to aid third party stakeholders. Provides a basis to discuss the company's agenda of return on investment from charity.
8. How does the company react when faced with negative disclosures? Provides a measure of fortitude under stress.

 

        Four evolutions of schools of thought historically extend from philosophical debate over business roles in society based upon:  

1) Whose interest should a corporation serve?

2)To whom should a corporation be responsive to n order to best serve that interest? 

The answers are  shareholders only, or  the larger society, or a mix of the two.  Here are the four schools found in Jennings (2012) textbook:

Inherence

     The manager answers to the shareholder and only to the shareholder and only becomes involved in social or political issues if it benefits the shareholder (Jennings, 2012).

Here it is important that the shareholder is protected from legal action, while profit is produced. Some legal protections these days require truth in advertising more than in past history meaning question 3 and 1 are upheld with inherence.  The remaining questions 2 through 8 are of no concern to immediate profit, but some may argue that each can lead to a negative image of the company and a resultant loss of sales depending on social responses.

Enlightened Self-Interest

        Business value is enhanced if business is responsive to the needs of society  (Jennings, 2012).

If society has a need and a business responds to provide that need, then all eight questions will lend to satisfying a companys ethics.

The Invisible Hand

        Business serves the larger society and does this best when it serves the shareholders only....government sets the standards...movement from this towards social issues or political issues, is only when society lacks sufficient information to  make a decision (Jennings, 2012).

Recently, during the social articulation of same sex partners' issues in the United States, many states have yet to approve of same sex marriages, which impacts company benefits. Some companies have stepped out when governments had not yet done so, and made decisions to support and recognize same sex partnerships/marriages.  This eliminated costly legal entanglements that could be brought on by the legal question keeping shareholders out of the same sex marriage litigation issue.  This seems to fall in line with a philosophy that will deal with the eight questions when needed or anticipated.  Although not a socially responsive method, if the social issue is related to the shareholder, and government cannot make a decision, then this could actually be a responsible and ethical method to conduct business by addressing the eight questions.

Social Responsibility

        Business serves society (Jennings, 2012).

This mode of thinking might seem to disregard the first question of compliance with the law. As with Sarbannes Oxley, it has been noted that the need for a rigorous approach to social responsibility is needed to keep the business alive so that it is possible to serve society. In recent times, political activism by businesses that refuse to make wedding cakes for same sex couples could result in the closing of a business and the revenue that the business would generate for it's stakeholders. This form of political activism may fulfill all of the roles of each of the eight questions, but, what difference does it make when the business is closed?