Social Irresponsibility in Management

Primary interest lay in the extent to which decision-making was influenced. The results, summarized
in Table 6, indicate that the attempts to change the role orientation did have an effect upon decision-
making. Decisions under the stakeholder version were less irresponsible: 76% of the decisions in the
stockholder version were classed as highly irresponsible, compared with 22% of the stakeholder
decisions (taking the last two columns together). None of the stockholder decisions were free of
irresponsibility vs. 21% of the stakeholder decisions. These results were statistically significant at the
0.05 level (calculated level of significance was less than 0.001 using the test).

Although the democratic board was more effective than was a prior agreement by the board to
represent all interest groups, the difference was not statistically significant.

The stakeholder version changed the role and the method of accounting. An analysis was conducted
to assess the relative contribution of each aspect. The hypotheses in this report suggested an interaction:
social accounting should be of greater value where it is part of the legitimate framework. Also, the
stakeholder role becomes stronger when the accounting system is designed along the same framework.
Still, some effect was expected if either of these components was used by itself.

The impact of social accounting was tested by varying the information in the control condition
(where no statement was made on roles.) Financial accounting was used for 30 groups and 24 groups
received social accounting. The results were surprising: instead of a reduction in irresponsibility, there
was a tendency (not significant) for irresponsibility to be greater with social accounting.

Neither a reorientation of the role nor social accounting, by themselves, proved effective. It was
only when used to reinforce one another that significant reductions in irresponsibility were obtained.
These results are relevant to those advocates of social accounting who are concerned with changing the
method of accounting alone.

The results would seem to be subject to serious biases because different versions were run during
each administration of the role-playing case and the biases would be expected to be constant across the
different versions.

Table 6: Decisions in Panalba Case: Stockholder and Stakeholder Conditions

Role: Percentage of Groups Selecting Each Decision

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