The field of business is one of the areas in society wherein people involve in it have to make important decisions almost everyday in their jobs. Most of the time, decisions have to be made immediately especially with the competitive nature of the business industry. In relation to this, since most companies is a source of employment to thousands and sometimes even millions of people, the decisions made by the administration of organizations affects numerous people. Moreover, the influence of companies especially of multinational corporations has tremendous impact in the society that could actually inflict change upon them.
This situation is greatly applicable in the case of the South African Investment. Texaco and Standard Oil, presently known as Chevron are the two major stockholders in the Caltex Petroleum Company. Each company owns 50 percent of the total stocks of Caltex. The company has dealings with the South African Government as the country is the primary source of oil that allows them to produce various petroleum products. In the same manner, South Africa also largely benefits from foreign investors because they contribute a huge portion to the country’s income.
Caltex is the largest American company that invested in the country. Being the case, the company has a vital position in the economic robustness in the company and their decisions and actions would greatly affect the situation of the country. In line with this, advocate groups wants to use this strategic position of the company in order to further their cause of eradicating or at the very least addressing the issue of apartheid in South Africa. Apartheid allows the white minority of the country to dominate the majority of the citizens, which are mostly blacks.
In this situation, the whites hold the advantageous position with the resources and power at their side, which leaves the blacks as second class citizens that have to suffer unfair and unjust treatments (“A South African Investment”). In 1977, the administration decided to expand the operation of Caltex in South Africa. They planned on building a plant that would further enhance the production of the company. However, this was met by protests coming from some members of the board that belong to the Interfaith Center on Corporate Responsibility.
This group greatly advocates anti-apartheid causes and one way in order to reach this objective is by convincing the Texaco and Standard Oil to pull out its investment in South Africa. Based upon my judgment, the utilitarian benefits of the expansion of Caltex is more important during that time as compared to the possible violation of moral rights. Utilitarianism focuses on the outcomes of an action. A decision or action is perceived to be ethically justifiable when it gave greater amount of benefit for the most people concerned (National Endowment for Financial Education, 2006).
In the case of the Caltex plant expansion I deem that this would have more benefits rather than costs. First of all, the establishment of foreign companies in South Africa also helped improve the situation of the black population. This is observable in the improvement of the real earnings of black industrial workers that also aid in the lessening the gap between the white and black incomes. The expansion of Caltex would actually further enhance these benefits for the black people.
Furthermore, if Caltex would removed its investment from the country it would hardly effect the black majority since all the benefits they from the foreign company would be lost. On the other hand, there is still a possible violation of moral rights as well as injustices against the blacks. This could be proven by the fact that even though adhere to the Sullivan code that would further improve the situation of blacks and uphold their rights it is still not binding since it still have to work within the South African law.
The government of South Africa implements laws that have separate facilities for whites and blacks as well as the unequal pay among their citizens. Even though there are possible violations of human rights against the blacks from the expansion of Caltex, not pursuing the plan would even make life difficult for the blacks because even their source of livelihood coming from this company would no longer exist. Not only would they cease to have equal political rights but they will no longer have the means to sustain their everyday needs that is also essential for them to live.
If I were in the position of one of the stockholders of either Texaco or Chevron, I will have different positions on the three resolutions that were presented. My decision would be guided by the maximum amount of benefit that my stocks and the company would gain from the decisions. Moreover, I would also think of the welfare of the majority of the stakeholders involved. On the first resolution, I would vote against the proposal of terminating Caltex operations on South Africa.
I deem that ceasing operations in the country would bring detrimental effects to the company because the oil obtain from the country has an important role in the robustness of the company. In relation to this, it would also affect numerous people who would lose their jobs, which includes the black workers in South Africa. Moreover, such action would not make any substantial change in the issue of apartheid since there are still other foreign investors in the country and the government has other means to survive even if Caltex terminate its operation.
I would also vote against the second resolution that requires Caltex not to sell its oil products to the police and military of South Africa. Based upon the South African law, refusing to cater petroleum products to the armed forces of the country is a clear violation of the law. As such, violating this rule would clearly put Caltex in a disadvantageous position that could threaten the operation of the company in the country as well in other nations. It could also be the cause for the unemployment of large numbers of its workers.
Another reason is that doing so might only put the blacks’ citizens in a bad situation because the government might further exploit the blacks especially during such time of crisis for the country. Contrary to my previous positions, I would vote in favor of the third resolution that would ask the South African government to implement the Tutu principles. Caltex has established its important role in South Africa especially during the time when OPEC established an oil embargo in the country.
As such, Caltex has the capability impose demands upon the South African government and they could do so by asking the implementation of the Tutu principle. This is a good way to improve the situation of the blacks in a sound and legal manner. There is a huge possibility that the South African government would grant it especially if they would analyze the situation that they are in. South Africa has a lot to lose if they would have conflict with Caltex while they are facing a challenging situation.
By approving this resolution, many stakeholders would benefit from it, not only the blacks but also the company since they would have better relationship with those who advocate anti-apartheid issues and this could also boost their image of addressing societal issues. The managers of Texaco and Chevron should respond to these resolutions in a manner by which they would take into account the maximum benefit that all stakeholders could achieve from the decision. Being the case, they should also vote against the two resolutions and approved of the last.
The managers should respond in such way because doing so would be beneficial to the majority of the people involve and this would also address the social issue of apartheid. Lastly, the management has a responsibility in making sure that the whole operation of its business is running smoothly. Their concerns should not solely be based upon the high income returns because they would not achieve such if they do not address the problems that are affecting their business.
In line with this, they should not only look at the law and the rate of returns in deciding where to put their investments. They should also give due importance to the social and political situations of the country or a certain place that they would invest in. This is due to the fact that these factors play an important role in the overall success of a business. The important role that most companies have, not only in the business field but also in the society should be use properly so that they could also be agents of positive change in the world.
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