Deontological ethics, also known as universalism, is a branch of ethical theories that determines the moral and status of an action not by its consequences, yet rather by principles such as justice, rights or fairness, and is therefore considered to contrast the consequentialist theory (Weiss, 2014) [23]. This dichotomy is likewise the rationale behind the choice of these two theories to enrich the significance of the results by additionally including an important corrective for the quantifying cost-benefit balance of a utilitarian ethic (Van Staveren, 2007) [24].

Kant, being considered one of the fathers of universalism (Marques, 2015) [25], holds the categorical imperative as the fundamental principle and moral law of ethical behaviour (Höffe, 1977) [26]. This concept consists of three formulas, which are elaborated below.

Firstly, the ethics of an action is based on the question whether it follows a maxim whose validity would be acceptable to all individuals, at any time and without exception, from which, at the same time, you would want it to become a general law (The Universal Law of Nature Formula) (Von Ebert, 1976) [27]; Korsgaard, 1985 [28] ). Accordingly, the likelihood of CL becoming a universal law whose disregard would be considered immoral is extremely remote. Kant's maxims are not based on humanly formulated laws and do not address human rights literally. However, concepts such as dignity, freedom, wellbeing and autonomy are central to both (Van Staveren, 2007) [24]. The corresponding violation of the fundamental human rights of children conflicts with the idea of social welfare, since many types of CL cause permanent damage to body and mind, preventing most child workers from reaching the age of 50 (Radfar et al., 2018) [11].

Secondly, all individuals affected should not be treated as mere means to another end, but rather as an end in itself, i.e. they must not be threatened in their freedom and dignity (The Humanity Formula) (Sullivan, 1997) [29]. As a matter of fact, the employment of children is about the instrumental use of cheap labour and not for the end in itself or the establishment of dignity, rather the opposite. Additionally, beating, humiliating and psychological assault of children is opposed to any humanitarian standpoint (Kreikebaum, 2006 [30]; Amnesty International, 2018 [31] ).

Thirdly, Kant continues that each subject, through his own use of reason, must establish maxims of will that have the form of universality but do not interfere with the freedom of others (The Autonomy Formula) (Reath, 1994) [32]. Here, individuals are law-givers instead of followers of the universal law as indicated in the first formula (Reath, 1989) [33]. At this point the question has to be raised from which age on children is able to assess their situation correctly and to distinguish right from wrong. Meaning, from when on, are children able to develop reasons and make decisions autonomously from their parents (Yovel, 1998) [34] ? However, children must be free to decide whether they want to work or not in order to allow ethical vindication. If they are voluntarily willing to work for the benefit of the family, this would be ethically acceptable according to Kant (Kreikebaum, 2006) [30]. Resulting from their age, however, they are dependent on their parents, which limit the child’s autonomy. Accordingly, the lack of alternatives, such as education, and poverty of the family drives parents to send children to work (Pierik, 2007) [9]. Since this taking up of work is not determined by the child itself rather directed by other parties, CL thus, likewise regarding the first two formulas, appears to be utterly immoral viewed from the vantage point of Kant’s three formulas of the categorical imperative.

However, this theory also bears some drawbacks. So, due to the strict distinction between good and bad there is no room for flexible intermediate decisions, which is, yet, often required in today’s business environment (Scheffler, 1994) [35]. For instance, despite the rejection by the categorical imperative, CL offers benefits to some stakeholders (Marques, 2015) [25].

The author endeavours to open up the subject of CL for executives by linking normative stakeholder theory and utilitarianism. Accordingly, classical utilitarianism is a hedonistic concept which assumes that there are measurable amounts of joy and pain. Utilitarianism¹ takes the view that an action is ethically justifiable if the output is greater than the pain for all concerned (Posner, 1979) [36]. Utilitarianism can be assigned to the theories of consequentialism, according to which the moral correctness of an action depends solely on the actual consequences of that action (Sinnott-Armstrong, 2014) [37]. Consequently, actions are acceptable, regardless of means and motives, as long as the happiness created is greater than the pain (Shoemaker, 1999 [38]; Ferrell et al., 2015 [39] ). Also, in a utilitarian analysis all interest groups are regarded equally, i.e. no stakeholder is assigned more or less importance (Weiss, 2014) [23].

MNEs have certain responsibilities towards those who may be affected by its activities (Freeman, 1984) [40], such as employees, shareholders and customers (Chen and Roberts, 2010 [41], Siegfried 2015a [42] ). Satisfying stakeholder needs goes beyond mere profit maximisation and requires understanding stakeholder demands. As CL is a morally controversial issue, the normative stakeholder approach of Donaldson and Preston (1995) [43] will be applied in the following, as the relationship between the company and its stakeholders is based on moral and normative obligations. Ergo, business decisions should be predicated on ethical considerations, as such behaviour is not only appropriate but also desired by stakeholders (Ibid.).

Hereinafter, six stakeholders mostly affected by CL are examined in a “cost-benefit” calculus (Greene et al., 2008) [44], as already alluded in Table 2 ex ante, to reach clarity about the moral status of CL.

According to Manda et al. (2003) [45], work can contribute to children’s development and parents’ pride in seeing children following their footsteps and by taking part in a broader socialisation processes (Potter and Lupilya, 2016) [46]. Additionally, CL often times seems to be the best alternative under given circumstances. Yet in their work, these children are often exposed to physical or verbal violence (Harari et al., 1997) [47], hazardous substances (chemicals and pesticides) (Wilk, 1993) [48], and deprivation of freedom, frequently causing permanent health damage or even death (Morris, 2010) [49].

Notwithstanding, CL provides impoverished families a vital source of income (Shumetie and Mamo, 2019) [50]. Simultaneously, since the work occupies the entire time, children often are unable to receive basic education (Quattri and Watkins, 2019) [51]. A deficit, that leads to high opportunity costs accounting to an 11% loss of income per missed school year (UNICEF, 2004) [52], which will deprive the family of higher long-term earnings. Beyond that, as being aware of the terrible working conditions their children are exposed to, parents are most likely plagued by accusations and pity (Pierik, 2007) [9].

Furthermore, shareholders are benefitting from CL in form of higher ROI since production is carried out at low wage costs, the expenditure is thus lower which in turn results in a higher yield (Manda et al., 2003 [45]; Sprinkle and Maines, 2010 [53] ). Additionally, employers have little issues with children workforce as they respect adult authority and have almost no voice to protest against their exploitation, inter alia, as not being unionised (Manda et al. 2003 [45], Siegfried 2015b [54] ). However, CL might have a negative impact on a company's image, which is likely to cause the opposite situation. In accordance, many studies show that being responsible, e.g. by avoiding CL in the VC, reputation can be increased and may thereby additionally attract CSR conscious shareholders (Cheng et al., 2014 [55]; Hart and Zingales, 2017 [56] ), leading to long-term profitability as well as competitive edge (Vogel, 2005 [57]; Carroll and Shabana, 2010 [58] ). In either case, to capitalise on CSR, initiatives must be specifically aligned with the desires of shareholders and stakeholders (McWilliams and Siegel, 2001) [59].

Moreover, CL enables customers all over the world to buy low-price products

(Weiss, 2014) [23]. Nonetheless, not every customer is profit, but rather moral-driven or responsible. To this end, revelations about products produced by children often lead to boycotts of these (Ballet et al., 2014) [60].

Beyond that, the reputation of a low-wage country has the potential to attract much foreign investment, which can bring governments higher tax revenues (Donaubauer and Dreger, 2018) [61]. Yet, the ground for this condition may also have the opposite effect. Lastly, many developing economies or governments are unable to compensate for the lack of cheap CL, as the wages for adult workers are considerably higher. This might also increase the unemployment rate among adults, as more importance is attached to children (Abe and Ogawa, 2017 [62]; Chakraborty and Chakraborty, 2018 [63] ).

Since the action scope of managers is constrained by bounded moral rationality like laws and contracts, the ability to pursue the maxim of the greatest benefit is considerably reduced, which renders the application benefit of this theory in a business context rather detrimental (Donaldson and Dunfee, 1995 [64], Siegfried 2011 [65] ).