Organizations should utilize utilitarianism in the increasingly changing world while implementing corporate social responsibility (Carmelli et al., 2023). This will help to create benefits and happiness for themselves and their society. This paper will introduce CSR, discuss utilitarian ethics, provide arguments that favour CSR, and provide arguments that do not favour CSR.
CSR Defined
Businesses regulate themselves using corporate social responsibility (Fernando, 2023). The author further claims that corporate social responsibility helps an organization become socially accountable to itself, its stakeholders, and the general public. Organizations that practice CSR are conscious of their impact on all aspects of society, including social, environmental, and economic (Carmelli et al., 2023). An organization that engages in CSR operates in ways that enhance society and their environment and do not contribute to them negatively. Further, corporate social responsibility benefits society and boosts the organization’s brand. Companies with CSR have experienced significant growth, setting aside resources to give back to society. This means it is only suitable for developed organizations because they have many resources. If an organization is visible to the public, it becomes successful and therefore needs to set required ethical behaviour standards.
Utilitarian Ethics
Utilitarianism is an ethical perspective introduced by renowned thinkers Jeremy Bentham and John Stuart Mill. The ethical perspective focuses on maximizing overall happiness within society. Utilitarian ethics does not emphasize the rules, but it emphasizes the results. While it does not focus on rule-based approaches, utilitarianism judges actions based on their consequences (Mohammed, 2023). One would describe something as good if it brings happiness to society. The perspective only favours the actions that generate the greatest good for many people.
Furthermore, utilitarianism seeks to answer the question, which action brings the most happiness and least suffering to the people affected? The first thinker, Bentham, envisioned this as a sum of individual utilities, and the second thinker considered the quality and the distribution of happiness while also considering its quantity. The key ideas in the ethical perspective include The consequences of the rules because morality results from the outcomes and not the pre-defined rules. The greatest good for the most significant number. The actions should benefit a larger number of people. Finally, utilitarianism holds that the individuals’ happiness holds equal weight despite the personal connection (Rosen, 2024). Utilitarianism can be applied in business in the following ways: To ensure customer satisfaction and fair business practices. To ensure responsible marketing and ensure employee welfare. To enhance ethical sourcing and ensure social and environmental responsibility. This will ensure the organization’s impact promotes long-term well-being for all its stakeholders.
However, challenges and complexities exist while implementing utilitarianism. First, quantifying and comparing individual happiness may become biased. Second, balancing the majority benefit and the potential harm to the minorities may divert from ethical principles. Third, choosing between immediate benefits and long-term consequences needs careful analysis and critical foresight. Fourth, comparing diverse values such as economic prosperity and environmental protection may become challenging.
Arguments in Favor of CSR
According to Carmelli et al. (2023), utilitarianism aligns well with Corporate Social Responsibility initiatives because it maximizes omaximizingpiness to create a positive social and environmental impact. Some of the benefits of societal well-being include improving living standards. If organizations educate, healthcare, and infrastructure develop in communities, they will use CSR to foster individual opportunity by reducing poverty and making society happy. Environmental sustainability is also achieved. Initiatives focusing on clean energy, resource conservation, and reducing pollution address existential threats (Batra, 2023). This creates a healthier environment for future generations. Investing in local initiatives and supporting social causes creates more vital communities. This promotes diversity and inclusion, crucial to creating social cohesion, trust, and a sense of belonging (Turnbill, 2023). This creates happier communities. Finally, it empowers individuals due to fair labour practices and employee well-being initiatives. The organization offers programs contributing to personal growth and dignity, increasing individual happiness.
In addition, let us discuss the benefits for the companies. To begin with, it enhances brand reputation. According to Bhaskar et al. (2023), consumers favour companies with strong corporate social responsibility practices. This increases brand loyalty and reduces the risk of reputational damage. It attracts and retains talent. Strong CSR plays a significant role in creating a positive company culture. As a result, it attracts and retains top talent who value social responsibility. It increases innovation and collaboration because it requires partnerships to develop innovative solutions to address social and environmental challenges. As a result, it fosters teamwork and generates new ideas that benefit the society and the company. It reduces operational costs. Sustainable practices that reduce waste and energy efficiency lower operation costs, improving profitability and financial sustainability. Finally, it improves risk management. According to BOZMA & KARCIOĞLU (2023), proactive CSR mitigates legal, regulatory and environmental risks, which enhances long-term stability and investor confidence. Overall, embracing CSR creates a way to enhance collective prosperity and happiness in society and the company.
Arguments Against CSR
According to Open AI (2024), from a practical standpoint, Corporate Social Responsibility (CSR) initiatives can face criticism when they cause short-term business losses or disproportionately benefit certain groups at the expense of others. Regarding short-term losses, critics argue that the utilitarian principle, which seeks to maximize happiness or well-being, is compromised when businesses suffer financial strain or reduced competitiveness due to diverting resources towards CSR activities. This criticism suggests that the sacrifices made by businesses in the short term may not be justified if they outweigh the uncertain or insufficiently impactful long-term benefits for society. Moreover, the losses incurred are substantial enough to threaten the viability of the business. In that case, it raises questions about the wisdom of pursuing CSR initiatives potentially undermining the business’s ability to contribute to societal welfare in the long run.
Open AI further posits that when CSR efforts disproportionately benefit certain groups over others, concerns arise regarding the principle of impartiality central to utilitarianism. Critics argue that if CSR initiatives primarily serve the interests of specific stakeholders, such as affluent communities, shareholders, or employees, while neglecting the needs of marginalized consumers or the environment, it results in an unequal utility distribution. This unequal distribution undermines the practical goal of maximizing happiness or well-being, as it fails to consider the well-being of all affected parties equally. For instance, if a company’s CSR initiatives focus solely on enhancing amenities in affluent neighbourhoods where its executives reside while ignoring the pressing needs of disadvantaged communities, it perpetuates societal inequalities rather than promoting the greatest good for the most significant number.
Conclusion
Utilitarianism and CSR go hand in hand because they both significantly benefit society and the company. While there are criticisms when an organization’s CSR causes short-term losses and certain groups at the expense of others, the organization balances between all of them.
References
Batra, G. (2023). Renewable energy economics: achieving harmony between environmental protection and economic goals. Social Science Chronicle, 2(2), 1-32.
Bhaskar, R., Li, P., Bansal, S., & Kumar, S. (2023). A new insight on CEO characteristics and corporate social responsibility (CSR): A meta-analytical review. International Review of Financial Analysis, 89, 102815. https://doi.org/10.1016/j.irfa.2023.102815.
BOZMA, K., & KARCIOĞLU, F. (2023). The Relationships Between Corporate Social Responsibility and Talent Management: An Analysis Through Human Resources Management. Trends in Business and Economics, 37(2), 81-90.
Carmeli, A., Dothan, A., & Boojihawon, D. K. (2023). Engagement in sustainability behaviours in normative social and utilitarian economic-driven organizations of Applied Behavioral Science, 59(1), 155-176.
Fernando, J. (2023, July 18). Corporate Social Responsibility (CSR) Explained With Examples. Retrieved from https://www.investopedia.com/terms/c/corp-social-responsibility.asp
Mohammed, A. (2023). Utilitarianism: Making Ethical Decisions in Retail. LinkedIn. Retrieved from https://www.linkedin.com/pulse/utilitarianism-making-ethical-decision-retail-abdulkarim-mohammed
OpenAI. (2024). ChatGPT. Language Model.
Rosen, F. (2024). The origin of liberal utilitarianism: Jeremy Bentham and liberty 1. In Victorian Liberalism (pp. 58-70). Routledge.
Turnbull, J. (2023). The discursive construction of Diversity & Inclusion in corporate websites. In Diversity and Inclusion across languages. Insights into communicative challenges from theory and practice (pp. 149-168). Frank&Timme.
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