The below is a review of the case study that involve the investment in South Africa that involve the Caltex company. The investment was during the time the country was struggling with the issue of apartheid and was trying to fight along with the problems that were brought by racism. The case study took into account the case of the utilitarianism theory and how it was used by the Caltex Company in South Africa amidst outcry of the people who were opposed to its ideas of continuing serving in the nation (Smith, 1977). At this time, Caltex Company, which is based in United State of America, was one of the biggest companies that offered refining of the crude oil in the country.
Therefore, it claimed that as far as it is offering benefits to the people of south Africa that were equivalent to the white who were ruling the country at that time, south African people are not then supposed to pressure to close its business (Pearson Education, 1995). This in itself was utilitarianism in action because the company just looked at the utility that it brought to the country without looking at the harm it caused at the long run. Therefore, this made different leaders to talk against such utterances from the company’s manager. One of the countries leader who was against this was Desmond Tutu who said that by doing this, it was like oiling their chains to make them more comfortable whereas they want to break off their chains and remain free.
Utilitarian benefits versus possible violations of moral rights and of justice
At the height of the apartheid regime, Caltex Company had expanded their refinery operations in South Africa that had offered the government of South Africa a great access to the petroleum products. Furthermore, the economy of South Africa relied mostly on oil where 25% of their energy was used on the energy sector. This made the South Africa law even to make sure that the company offers some percentage for government use. There were high corporate taxes that helped a great annual revenue t o get t the government.
Nevertheless, the company despite many people opposing it operation in the country, it still insisted that it should continue its operation in the country. It should continue operating in the country according to it management and continue offering petroleum products to the government as it claimed that it offered a strategic resource to the racist South African government (Pearson Education, 1995). However, it claimed that helped black South African workers as the company owned black workers toward which the company has special responsibilities to. To show the utilitarian benefits that the company had embraced the company manger in a statement said, “Texaco believes that continuation of Caltex’s operations in South Africa is in the best interests of Caltex’s employees of all races in South Africa.... In management’s opinion, if Caltex were to withdraw from South Africa in an attempt to achieve political changes in that country, as the proposal directs, … such withdrawal would endanger prospects for the future of all Caltex employees in South Africa regardless of race.”
According to my view such utilitarian benefits were not important that the violations of moral rights and of justice that the people of South Africa succumbed. The effect that this could bring were evident and that the reason why the manger continued and said that he is most of the hardship that will result from the dislocation of the company will fall mostly in the white people. Naturally, that was the black people argument that was maimed, killed their families displaced and other people detained including their leader Nelson Mandela. Therefore, through dislocating this industry, the white people will not have enough resources to continue with their discrimination and the period of apartheid will cease. According to Tutu, he argued that the company should fist stop its operation and regain it after freedom from racism was offered.
Therefore, no matter how many utilitarian benefits were enclosed therein the company operation in the country according to my view, it cannot be equivalent to the benefits that can be brought by the freedom and the justice that is done to the people. The reason being, the company will always operate in an unsafe environment that will always be prone to the acts of boycotts and strikes. Secondly, workers especially the black, will never be contented in the work whether employed by the company and will see the company as a collaborator of the white people (Beckwith, 1980). Third and most importantly, the company will always offer important resources to the government that might affect the duration that South African black people to get their freedom.
My opinion as a stockholder in Texaco or Standard Oil over the move of the company
If I were a Texaco company shareholder, I would vote for the company to implement the Tutu’s principles. The reason being that Tutu principles were logical to both the company and call for the justice and the well being of the South African people. His call to the multinational world to exert pressure economic pressure to South Africa’s government until the apartheid was over was an ideal idea. Despite of the number of the benefits that the company brought to the country black people, freedom to the people was paramount (Pearson Education, 1995). As a shareholder of the Caltex Company, it would be unwise to leave completely the country without any provision for return. Nevertheless, it would also be very selfish to operate in an environment whose ground is unstable and capable of erupting any time. With constant insecurity in the country, the business will not at any time no matter the utilitarian benefits that it offers to the people be secure. Political instability in a country cannot be predicted the direction that it would take any time and working in such environment is working under uncalculated risk that may one-day end up causing a lot of loss to the company.
Manager’s responses of Texaco
It would be very fair for the company manger to listen to the people’s resentment. Through this, he would have been able to offer a more better, uniting as well as long-term business oriented resolution. First, he should not confer with an idea of terminating the business in the country. This is because; the bottom-line of the business is profit (Smith, 1977). Nevertheless, that cannot be the only thing that a good business can withhold in any business environments. It would also ensure that the people who form a very vital resource in the company are towards the idea of the company operating in the region.
Secondly, as far, the company is operating in a certain country; it had to concur with the rules and the law of the land. Therefore, it would be a great joke for the company to fail to sell their products to the government. This would lead to the company either being closed or suffer great setback through following such idea. Therefore, as far as the company would have opted to operate in the country, it was liable to follow the law of the land. That means, it would continue selling to the government as the law requires. Therefore, the manager was supposed to let the people realize that.
Finally, the only option that was left that the manager would confer with is the idea of the Tutu’s principles. This would strike the balance of the principle of justice that would lead to the people’s right to freedom and it would uphold moral values of the company towards upholding justice and respect the right of the people (Beckwith, 1980). It would also concur with the meaning of the utilitarian standards of morality that says something is right to the extent that it diminishes social cost and increase social benefits of which freedom to me was one of the paramount social benefits than even economic benefit at that time.
The company management has many responsibilities beyond ensuring high return to the shareholders. First, the management of the company is required to analyze, report and offer recommendations to the company to offer direction on the tussles that were there during the time of apartheid to ensure a strategy that would unite the company and the people in the country is put in place.
The management should ensure that the visions, goals and objectives of the company are achieved through ensuring that the ethics of the company that concur with social morals are taken in position. The future of the company lays in doing the right thing the right way. This is management responsibility to ensure that. Otherwise, if the management does not support the moral values in the society, it might adversely affect their business when these forces come later into existence(Beckwith, 1980). Therefore, they should ensure that racisms in the country, which had been a cause of disagreement, are suppressed.
Finally the company should not only look at the rate of return that it was getting in its investment to decide the amount of investment that it was supposed to put in that time. This is because it was operating in an unstable ground that was prone to fall any side anytime. Operating in a place where security was not guaranteed, the rate of return at this time does not ideally reflect the capability of the company investment for a longer period.
The investment of any kind should have short and long time goals. If the company has objective of working for a long time and ensuring that it operate at a profit, it cannot compromise the effect of political issue in any company. A good example is Daewoo Company in South Korea that was supported by the government leading to misappropriation of its resources. This made the company to collapse with more than four times dept than its overall net worth. The reason being it operated in uncompetitive environment.