Abstract

Most companies engage in some form of corporate social responsibility, yet very few would support legislation to make such activities mandatory. On the other hand, social activists and environment protectors strongly advocate for such policies. However, the final decision rests in the hands of the government. Therefore, this paper analyses two different ethical frameworks: utilitarian and deontological, to evaluate if it is ethical for governments to obligate companies to follow their policies on corporate social responsibility. For the utilitarian theory, the paper discusses the consequences of mandatory corporate social responsibility (with direct examples from India), including the reduction of greenwashing and the increase in the prosperity of social entrepreneurship and the overall welfare of a nation. In contrast, the contradicting obligations of a government, such as protecting the freedom of choice and ensuring the well-being of its citizens, are the basis of the deontological discussion. Ultimately, the ethicality of making corporate social responsibility mandatory depends on the moral priorities of the government. Still, it is essential to note that these policies’ specifics can be adapted to promote both self-regulation and the common good.

Highlights

  • For many years, philosophers have argued that businesses will maximise their benefits when pursuing the single bottom line approach of profitability (Altman & Berman, 2011)

  • In 2013, India became the first country to introduce a mandatory corporate social responsibility (CSR) policy under the Companies Act (Government of India, 2013). The nature of this decision has been criticised by many; this paper explores the utilitarian and deontological frameworks to argue that it is ethical for a government to mandate CSR policies and regulations for its businesses

  • This paper evaluates the ethicality of governments making corporate social responsibility mandatory through the utilitarian and deontological frameworks

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Summary

Introduction

Philosophers have argued that businesses will maximise their benefits when pursuing the single bottom line approach of profitability (Altman & Berman, 2011). In the mid-1990s, John Elkington coined the term Triple Bottom Line (TBL) to introduce a new “accounting framework that incorporates three dimensions of [a business’s] performance: social, environmental and financial.”. This sustainable form of measuring corporate success is commonly referred to as the 3Ps: people, planet, and profit (Slaper & Hall, n.d.). As a result of the TBL, businesses, non-government organisations (NGOs), and governments have initiated different programs/policies to ensure their long-term goals are sustainable (and in some cases, profitable)

Corporate Social Responsibility
Research Methodology
Jain DOI
Utilitarianism
Deontology
Conclusion
Findings
Limitations
Full Text
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