Why Corporate Inclusion Policies Are Moral Decisions, Not Just Business Strategies

Corporate inclusion policies as moral decisions are driven by ethical obligations rather than just business strategy, according to recent research in the Journal of Public Policy & Marketing. Using the frameworks of deontology, virtue ethics, and utilitarianism, scholars argue that businesses act as moral agents with a duty to respect human dignity and social welfare, regardless of political or economic shifts.

The landscape of Diversity, Equity, and Inclusion (DEI) is currently undergoing a significant shift. After years of intense corporate competition to demonstrate commitment to diversity through hiring practices and inclusive advertising, many organizations are now retreating. This reversal stems from a combination of federal investigations, potential loss of government contracts, and legal challenges targeting diversity-conscious hiring. As companies rename initiatives or scale back programs to avoid political scrutiny, a fundamental question emerges regarding whether inclusion is a strategic variable or a permanent ethical requirement.

Why are companies retreating from DEI initiatives?

Recent corporate trends show a sharp move away from the proactive diversity commitments seen over the last decade. Many executives have transitioned from viewing inclusion as a competitive advantage to viewing it as a potential liability. This retreat is often framed through an economic lens: the argument that a corporation’s primary obligation is to maximize shareholder profit, making any program that does not show a direct, immediate boost to the bottom line a distraction.

However, researchers suggest that treating inclusion as a purely strategic bet—one that can be withdrawn when political winds shift—ignores the social role of the corporation. Because business decisions affect the lives of employees, consumers, and communities, companies function as moral actors within society. When inclusion is treated only as a marketing tactic, it becomes fragile and subject to the pressures of political and financial volatility.

How does deontology establish an ethical duty to include?

One way to frame the obligation of inclusion is through deontological ethics, a tradition associated with the 18th-century philosopher Immanuel Kant. Deontology focuses on duty and the inherent rightness or wrongness of an action, independent of its consequences. In a corporate context, this means companies have a fundamental duty to respect the dignity of every individual they interact with.

Kant proposed the “categorical imperative,” which suggests that individuals should act only according to rules they would want to see become universal laws. If applied to the marketplace, this would mean a company should follow rules that remain just even if every other company followed them. For example, if a retailer decided to only stock clothing in a narrow range of sizes, or if a bank denied loans based on race, these would be considered moral failures under deontology because such rules could not be applied universally without creating an unjust society.

This framework argues that inclusion is not a choice based on cost, but a requirement of respect. While implementing inclusive features—such as making a mobile app accessible to blind users—may present technical or financial challenges, the commitment to consider all people is a universal duty that exists regardless of the expense.

What is the relationship between inclusion and corporate character?

A second philosophical approach, virtue ethics, shifts the focus from specific rules to the character of the organization itself. Rooted in the teachings of Aristotle, virtue ethics asks what kind of entity a company wants to be. It emphasizes virtues such as fairness, courage, and wisdom.

The distinction between “performance” and “character” is central to this argument. When a company practices inclusion only when it is socially or economically convenient, it is engaging in performance rather than demonstrating true organizational character. This was evident in the backlash faced by Target after the retailer scaled back its Pride collection and diversity commitments in response to public criticism. Critics argued that if inclusion disappears the moment it becomes costly, it was never a core value, but merely a marketing strategy.

For instance, a MoveOn PAC-commissioned billboard truck was used to protest Target’s decision regarding its Pride merchandise outside its Minneapolis headquarters on June 28, 2024. Such incidents highlight how perceived shifts in corporate character can lead to consumer boycotts and long-term reputational damage. Companies that embed inclusion into their organizational character tend to build more sustained customer loyalty and are better equipped to navigate political controversy.

How does utilitarianism justify inclusive practices?

The third framework, utilitarianism, focuses on outcomes and the pursuit of the greatest overall well-being for the greatest number of people. Developed by John Stuart Mill, this school of thought is often the most familiar to corporate boards because it deals with aggregate benefits and resource allocation.

While some argue that focusing on minority groups might detract from the majority, utilitarian logic suggests that inclusion often produces significant “spillover benefits” for the general population. This occurs because the benefits of inclusive design often extend far beyond the original target group:

• Digital Accessibility: Netflix’s implementation of closed captions was primarily an accessibility measure for deaf and hard-of-hearing viewers, yet a significant portion of the hearing population now uses captions in noisy environments or when learning new languages.
• Urban Design: “Curb cuts”—the small ramps at street intersections originally designed for wheelchair users—provide essential utility to cyclists, delivery workers, and parents using strollers.
• Media Innovation: Audiobooks, originally developed to assist blind individuals, have grown into a global industry valued at approximately $9 billion, driven largely by sighted listeners.

From a utilitarian perspective, addressing underserved needs is not an act of charity but an efficient allocation of effort that creates new value. Because of the law of diminishing returns, the greatest gains in social and economic welfare often come from bringing previously excluded groups into the fold for the first time.

How can different stakeholders apply these frameworks?

Understanding these three frameworks allows different corporate departments to communicate the importance of inclusion to their specific audiences:

• Legal and Compliance Teams: Can utilize the language of deontology to emphasize rights, duties, and the necessity of adhering to universal standards of fairness.
• Employees and Consumers: Often respond to the virtue ethics model, which focuses on the integrity and character of the brand they support or work for.
• Investors and Policymakers: Typically engage with utilitarian logic, looking for the aggregate social benefit and the long-term economic value created by inclusive practices.

By recognizing that inclusion is a moral choice rather than just a policy management task, businesses can move past the reactive cycle of responding to political pressure and instead build more resilient, ethical organizations.

Key Takeaways for Corporate Leaders:

• Inclusion as Duty: Deontological ethics suggests that respecting individual dignity is a non-negotiable obligation.
• Inclusion as Character: Virtue ethics warns that inconsistent DEI efforts are seen as mere performance rather than true organizational values.
• Inclusion as Welfare: Utilitarianism highlights how inclusive innovations create broad societal benefits and new market opportunities.

The ongoing monitoring of corporate social responsibility (CSR) filings and upcoming regulatory discussions will likely determine how these ethical frameworks are integrated into future business models. We invite you to share your thoughts on how your organization approaches these moral dimensions in the comments below.