MHRM 6701 Week 4 Shared Value Position Paper Example

Not Charity With the Owners' Money: A Position Paper Arguing That Allerton's Reentry Hiring Partnership Is a Business Decision First, Read Through Shared Value, and Conceding Where Friedman's Objection Lands

Student Name

Walden University

MHRM 6701: Strategic Positioning and Social Change

Instructor Name

Month Day, Year

Not Charity With the Owners' Money: A Position Paper Arguing That Allerton's Reentry Hiring Partnership Is a Business Decision First, Read Through Shared Value, and Conceding Where Friedman's Objection Lands

The Objection

A classmate stated the objection to Allerton's proposed partnership with the county reentry office more bluntly than anyone at the company has: a laundry that hires through a reentry office is running charity with the owners' money. The objection draws on Friedman (1970), who argued that a business has one social responsibility, to make money for its owners while obeying the law and ordinary ethical custom, and that executives who spend company money on social goals are spending someone else's money without their consent. This paper argues that the partnership is a business decision first, and that Friedman's objection is right about one thing the proposal must take seriously.

The Business Case

Allerton Linen Services, a family-owned company in this course's composite case, commits to having clean linen back on hospital units before the morning shift begins. That promise depends on an overnight crew at the Cheektowaga plant where about a third of workers come from a staffing agency and direct-hire turnover runs near 70 percent a year. Each agency worker carries a markup of roughly $6 an hour over a direct hire's wage. Replacing a direct hire who leaves costs recruiting, a week of training and weeks of slower work. A partnership that supplies motivated candidates for overnight jobs, with a job coach for the first 90 days, addresses that problem directly.

The question is whether referred candidates will stay and perform. The best large-scale evidence comes from an unusual setting. Lundquist et al. (2018) studied more than a million enlistees in the U.S. military, some admitted with felony records under waivers, and reported that enlistees with felony histories left for poor performance no more often than their peers and tended to be promoted sooner. A laundry is not the army, but the finding undercuts the assumption that a record predicts poor work. Uggen (2000) found that employment reduced reoffending among participants aged 27 and older in a national work experiment, which suggests that older referred candidates, who may value steady work most, are also the likeliest to keep it.

Shared Value as the Frame

Porter and Kramer (2011) argued that a firm can earn profit by tackling a social problem that also holds back its own productivity. They distinguished this shared value from philanthropy, which spends profits on causes unrelated to the business. The reentry partnership fits the first category, not the second. The plant needs stable overnight workers; the county has residents who need steady jobs and struggle to get interviews. The same hire solves both problems. If the partnership did not reduce agency use or turnover, it would not be shared value, and the business case for it would fail.

Where Friedman's Objection Lands

Friedman's objection is right in one respect. If the partnership is defended only by its social benefits, it is a decision about the owners' money that the owners should make, not the HR department. The proposal must therefore stand or fall on business measures: retention of referred hires, agency hours replaced and on-time delivery. If, after a fair trial, referred hires leave as quickly as other overnight hires and the plant saves nothing, the program should end or be presented to the owners frankly as philanthropy, for them to choose.

Friedman is also right that executives can use social language to avoid accountability, and that a company can drift into causes its owners never chose. A program described as doing good can survive long after it stops working, because cutting it looks heartless. The way to prevent that is to set the business measures before the program starts and to report them to the owners every quarter.

Where the Objection Does Not Land

The objection assumes that hiring a referred candidate means giving up a better one. At Cheektowaga, the alternative to a referred candidate is usually not a stronger applicant but an agency worker who costs more and may not return next week. Hiring from a source the competition ignores is ordinary business sense; firms recruit from overlooked pools whenever labor is tight, and overnight plant labor in western New York has been tight for years.

Position

The partnership should go ahead as a business decision, with its success judged by retention, agency hours and delivery performance. Its social benefits are real and worth reporting, but they are not its justification. If the business measures fail, the owners should decide, knowingly, whether to continue it as philanthropy.

References

Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. The New York Times Magazine, 32-33, 122-124.

Lundquist, J. H., Pager, D., & Strader, E. (2018). Does a criminal past predict worker performance? Evidence from one of America's largest employers. Social Forces, 96(3), 1039-1068. https://doi.org/10.1093/sf/sox092

Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62-77.

Uggen, C. (2000). Work as a turning point in the life course of criminals: A duration model of age, employment, and recidivism. American Sociological Review, 65(4), 529-546. https://doi.org/10.2307/2657381