Would the Model Mean that Fannie Mae Could be Labeled an "honest" company?

No, the model would mean that Fannie Mae could not be labeled as an “honest” company because of the deceitful actions the company has taken throughout the years.

According to Islam, Seitz, Millar, Fisher and Gilsinan (2013), “Fannie Mae and Freddie Mac were created by the federal government of the USA for the purpose of increasing home ownership by increasing the supply of mortgage loans” (pp. 150). These two companies “were created to provide a second market for mortgage loans so that original lenders could free up their money for new loans” (Islam, Seitz, Millar, Fisher & Gilsinan, 2013, pp. 150).

Fannie Mae was created by the Roosevelt administration in 1938 and was a government agency that was run by the federal government. “The goal of the government in creating Fannie Mae was to make more funds available for lower income and less credit worthy families” (Islam, Seitz, Millar, Fisher & Gilsinan, 2013, pp. 151). When looking at the government’s goals when Fannie Mae was created, shows that the organization was “successful for a number of years in this regard” (Islam, Seitz, Millar, Fisher & Gilsinan, 2013, pp. 151).

Freddie Mac was then created when the government created the Federal Home Loan Mortgage Corporation. Which basically provided the “same services as Fannie Mae, thereby providing competition in the marketplace for the purchase of home mortgages” (Islam, Seitz, Millar, Fisher & Gilsinan, 2013, pp. 151). In 1989, Freddie Mac and Fannie Mae became “a private company with publicly traded stock” (Islam, Seitz, Millar, Fisher & Gilsinan, 2013, pp. 151). This allowed the two companies to become private companies.

Looking at the model of corporate social responsibility, Fannie Mae could not be labeled as an “honest” company. When looking at Fannie Mae superficially, one would believe Fannie Mae is a good company that practices being socially responsible. However, when taking a deeper look, one realizes that throughout Fannie Mae’s history that company has done nothing but show that the company is only interested in profit and out for the company’s own needs.

By using Jennings’ eight questions model Fannie Mae’s true character of its soul is revealed. After using Jennings’ eight questions model, one realizes Fannie Mae simply does not have the characteristics to be an honest company.

References:

Islam, Muhammad, Seitz, N., Millar, J., Fisher, J., & Gilsinan, J. (2013). Fannie Mae and Freddie Mac: A case study in the politics of financial reform. Journal of Financial Crime. 20(2), pp. 148-162.

Jennings, M. (2012). Business ethics: Case studies and selected readings. 7th ed. Mason, OH South-Western Cengage Learning.

What is the Difference Between Entine and Jennings' Eight Questions and Traditional Measures of Social Responsibility?s

According to Jennings (2012), “there are eight questions that should be answered about a company to determine the character of its soul” (pp. 104). Jennings reminds one by stating, “no company is ethically perfect,” furthermore, no individual is without his or her faults. (Jennings, 2012, pp. 104). However, a company’s soul can be determined by “conducting the examination to look beyond ever-changing political issues” (Jennings, 2012, pp. 104). Jennings believed these eight simple questions will help a person have an objective outlook at a company.

The biggest difference one notices by examining Jennings' eight questions model and also looking at traditional measures of social responsibility is the general outlook. A traditional measure allow a company to look at an individual person within the company and how his or her actions affect the company, but by looking at Jennings’ eight questions, allows a company to take a deeper look at the company as a whole. The eight question model looks at a company's own business practices and, if necessary, overhaul the organization’s business strategies to create an organization that is proactively more socially responsible. Jennings (2012) uses the example that “honesty in business dealings is a universal measure of a company’s soul” (pp. 104).  For a company to utilize Jennings’ eight questions will allow a company to take a closer “examination of ethics” within the company (Jennings, 2012, pp. 104).

Using traditional methods of measuring social responsibility or using Jennings' eight-question model does not matter because each method just gives a different perspective. Each model allows a person to see a different angle. 

References:

Jennings, M. (2012). Business ethics: Case studies and selected readings. 7th ed. Mason, OH South-Western Cengage Learning.

Chernev, A. & Blair, S. (2015). Doing well by doing good: The benevolent halo of corporate social responsibility. Journal of Consumer Research. 41(6), pp. 1412-1425.

Papasolomou, I., Kountouros, H. & Kitchen, P. J. (2012). Developing a framework for successful symbiosis of corporate social responsibility, internal marketing and labour law in a European context. The Marketing Review. 12(2), pp. 109-123. 

Contrast the Entine and Jennings' Views with Those of Friedman and Freeman

Entine and Jennings’ views on Corporate Social Responsibility (CSR) are drastically different than Friedman and Freeman’s views on CSR. Entine and Jennings viewed Corporate Social Responsibility in terms of marketing and branding of their product. Companies jump on the consumer’s urge to help protect and preserve the environment and use great marketing tactics to not only advertise the company’s product but also to promote the company’s social responsibility efforts. The company accomplishes this by having the company and its products “are associated with the labels ‘green’ and ‘socially responsible’” (Jennings, 2012, pp. 102). This gives the consumer the impression that these companies participate in campaigns to show and improve their image to the community. However, all that being said, it is important to remember that no company is without its flaws. Entine and Jennings continue by stating it is important to remember that just because a company has taken a stand on a socially responsible issue then it does not mean the consumer, employee or even the shareholder should just naturally assume and believe the company with out looking into the matter further.

Friedman however created a theory called the shareholder theory, which states that a business investing in social responsibility will increase its overall profits.  Friedman explains (2012) “only people can have responsibilities,” not companies (pp. 91). Friedman goes on to say a company can be a version of a fake person and in that sense it can have fake responsibilities but that is all. Friedman continues by stating those that are actually responsible “are businessmen, which means individual proprietors or corporate executives” (Jennings, 2012, pp. 91).  Friedman believed companies are not being socially conscience on purpose but are actually just trying to make money for the shareholders. The point of a company being socially responsible is to use all of its resources to participate in any activity that will continue to increase the company’s profits as long as the company is still abiding by the standards set by society, the law and ethical standards.

While Friedman believed in the model that the company focused on profit that would be spread throughout the shareholders. Freeman’s model focused on the company working to meet the needs of the stakeholders, which in turn, will make a profit. However, both models believed the stakeholder should be the ones who are socially responsible instead of expecting the company as a whole. Freeman felt the managers and stakeholders should have a relationship that will allow the stakeholder to have rights and privileges that, while will need to be okayed by the manager, will allow the stakeholder to feel like he or she has an important role within the company. Freeman felt that every employee, stakeholder, supplier, executive plays an integral role within the company and that each person depends upon each other to continue to make the company a success.

References

Jennings, M. (2012). Business ethics: Case studies and selected readings. 7th ed. Mason, OH South-Western Cengage Learning.

Chernev, A. & Blair, S. (2015). Doing well by doing good: The benevolent halo of corporate social responsibility. Journal of Consumer Research. 41(6), pp. 1412-1425.