Case Study 4 A South African Investment

Case Study #4: A South African Investment

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Case Study #4: A South African Investment

Question 1

Depending on how one may look at it, it might be factual that the feasible utilitarian benefits of the 1977 construction of the Caltex plant in South Africa may have been more essential than amending the immoral features of Apartheid. However, that does not imply that Apartheid in any form or structure is right, justified or tolerable. However, there is legitimacy to the actuality that the employment opportunities granted in the plant might have been among the most appropriate means accessible for the minorities as well as the blacks in South Africa obtain means of income. While comprehensive civil rights as well as freedom are critically imperative to all people in order that they can realize their full potential and assert their appropriate place in humanity, there are other, supplementary fundamental needs that ought to be satisfied prior to a person worries about spiritual, intellectual and related individual freedoms and rights. It may not be reasonable to offer an individual full government, social, as well as legal rights if they are deprived any reasonable sources of livelihood.

Caltex had the power to influence political policies on the South African government in order that the government may revive its laws. This has happened in other parts of the world, whereby conglomerates influence government policies in order to create a conducive environment for business. Foreign financial investments mean a great deal in any country since it revitalizes the social-economic status of the population and the national economy as well. It is an ignominy that Caltex had no problem investing in a country whose laws were exceedingly abhorrent to humanity. On the other hand, it is factual that in that era the living standards of the South African minorities as well as the Blacks were in a deplorable state. They vast majority of these populations lived in pitiable homes, had poor access to high quality educational programs, were deprived of the right to practice certain jobs or careers, and were granted wages that were exceedingly less than that of the white population in South Africa.

For numerous South African Blacks at the time, for whom so several outside the nation had the courage to confront the repressive regime may have chosen to take up jobs at the Caltex plant which granted them better living wages and better workplace environment than in the civil service. It is justifiable to imply that absolute freedom may not have been the priority for all Black South Africans who needed better living standards. Therefore the Caltex plant may have been the kind of investments that were actually required in the country at the time. The only provision Caltex ought to have added would have been the maintenance of reasonable wages and reasonable housing for its black and colored human resources.

Question 2.

As a stockholder in Standard Oil or Texaco, it would have been appropriate to vote in agreement with the three stockholder declarations. While it is factual that under the utilitarian philosophies it might not of necessity have been the most appropriate option for Caltex, Standard Oil or Texaco to desist from investing in South Africa, as a stockholder, it would have been appropriate to vote according to individual conscience. Any type of financial recompense, such as facilitating the generation of national income from the mining of natural resources or construction of national industries such as in petroleum, appears as unconscionable in regard to the fundamental premise on which the South African government operated and survived.

The first resolution demanded that Caltex terminates all its operations in South Africa unless and until the government ceased to enforce its Apartheid laws. It would have been suitable to vote in favor of that resolution. The failure to take a position and speak out against apartheid would have implied as consent and participation in its continuation. Failing to oppose a regime so wrong, in effect, it would mean that one supports repression as exhibited by the South African regime of the time.

The second resolution explicitly required Caltex to desist from trading its operations to the military. It would have been appropriate to vote in support of this resolution. The corporation, operated within its right to decline putting up for a vote in several areas since it asked the company to infringe on the laws of the country in which it functioned. It is factual that by trading its operations to the military the corporation failed to act or speak out in opposition to Apartheid. In sanctioning trading to the government and the military the corporation in effect became an accomplice in Apartheid by providing the Apartheid regime with an essential commodity.

It would as well have been appropriate to vote in support of the final resolution that required sustaining the Tutu principles. Desmond Tutu requested the company to assume an active role in operating toward the eradication of Apartheid as well as the establishment of fundamental rights to the blacks in South Africa. If Caltex, Standard Oil, and Texaco had no problem in sustaining the Apartheid government by trading its resources to sustain the military forces, it ought to have had no problem in supporting the divergent opinions of the majority populace of South Africa. In the two ways it impedes in the politics of South Africa at the time, although by supporting Tutu’s principles it would have acted in the way that the majority of the populace desired.

Question 3.

It may not be the prerogative of corporations to take on legislative policies or viewpoints in foreign nations that they operate in. However, corporation and its senior management bear the right to formulate decisions which, in their opinion, may bring competitive advantage and profitability to the business. It may not be the responsibility of a corporation to establish how a foreign government should operate. Corporations’ principal ethical obligation is to its shareholders as well as their investments. If a corporation’s management considers that a resolution, which is lawful, will realize prosperity to its shareholders then, except advised otherwise by its shareholders, the corporation ought to pursue its resolution. All three resolutions endeavored to substitute the ethics, values, as well as beliefs of a diminutive number of stockholders on the managers. These managers could have had to consent to the proposals made, although they were not obliged to sustain them. Providing that management did not take action to unethically thwart or defeat the resolutions from being proposed to the stockholders, the management acted appropriately in regard.

Question 4.

At the very fundamental plane, corporate management hold no greater liability than to guarantee the business’s financial success and prosperity. Corporate management is not recruited to perform as the conscience of a company. On the contrary, it is recruited to be the company’s investment, operational, as well as management leadership. Corporations are not in normal circumstances in business to operate for the general good of the public. It would be prudent if all people would assume responsibility for the mutual good, but that responsibility cannot be obligatory on individuals.

It is the prerogative of the shareholders as the bona fide owners of a corporation to elect board members, and it is consequently up to the board members to manage the corporation. If sufficient stockholders feel that the management ought to assume a social or political stand on given issue, then they hold the power, by means of their vote, to advise the management to act as required. However, devoid of that indication, it is neither feasible nor acceptable for the managers to take action based on their personal conscience if that act would be counter productive in regard to the interests of the company.

Business managers ought to restrict their actions to the decisions that relate to investment principles and the law. Only in the event that two potential options are equal in regard to the law and returns on investment, should a manager reflect on ethical concerns.