The Fannie Mae Mask of Social Responsibility

 

When you look at the eight questions presented by Entine and Jennings and then look at the business operations of Fannie Mae, the simple question of “Is Fannie Mae a good company?” is just that, simple. Simply putting, Fannie Mae, although good intentioned with attempting to make housing and “the American dream” affordable, created much more of a catastrophe then the good it was trying to provide. Entine and Jennings (2012) coined the term “rain forest chic” as a label for certain types of companies, and Fannie Mae fits the bill to a tee. Created and applauded for making affordable housing more available to those in need, Fannie Mae actually expanded that problem it was created to solve. Management was strictly motivated by profit and increasing their bonuses and instilled that in their employees as if it were the company’s original mission. Using the Entine and Jennings test two questions stand out the most to me below, which are in bold:

    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?

How honestly do product claims match with reality? As the issues with Fannie Mae are a bit older now, the truth of the Fannie Mae disaster has since been unveiled. By simply reading newspaper articles, you will quickly learn that Fannie Mae was not accurately depicting their accounts. The purpose of this was to make a profit and achieve inventive goals.

Secondly, how does a company treat its employees?

Fannie Mae was well-known in the end for being an over-demanding work horse, requiring their employees to work long hours and push through as much as they could for only the management to benefit from the hard work. They furthermore did not think of the rest of the country during their monetary-driven reign and what it would do once all the chips fell.

It is companies like Fannie Mae that make it difficult for other companies to be trusted or to be looked at for anything other than a power and money-driven business.