Importance of Utilitarian Benefits over Moral Justice
In my own judgment, the possible utilitarian benefits of building the Caltex plant were not more important than the violations of moral law and justice. Building the Caltex in deed seemed to present more benefits for the discriminated groups in the country. Caltex insisted that its expansion in South Africa actually benefitted the economic conditions of blacks because it followed the Sullivan Principles of 1977 (Ashford University). These principles were a set of six guidelines which served as a policy which the companies would follow to promote equal treatment between their black, colored, and white employees. In addition, statistics indicated that foreign companies had improved the economic circumstances of black workers and that they would be adversely affected if these companies withdrew from South Africa (Ashford University, n.d.).
However, I concur with a church leader who described the Sullivan’s Principles as an attempt to polish his chains to make them more bearable, whereas his real desire was to get rid of the chains (Ashford University, n.d.). In Caltex continuing to expand in South Africa, it inevitably supported a government whose moral ethics was fundamentally flawed. The South African government at that time had no interest in allowing blacks their basic rights in their own land, and treated them as third rate citizens. While providing the blacks with employment as a result of the presence of Caltex in South Africa was noble and important, I would compare Caltex’s presence to a short term fix to a problem. The presence of Caltex in the country would only support a government whose aim it was to oppress the black man, a fundamental moral flaw. I would have urged Caltex and other foreign companies to withdraw their operations from the country, thus crippling the government and forcing it into reviewing its policies on blacks and colored people. Indeed, blacks would initially feel the effect of reduced economic ability, but like childbirth pangs, this would quickly give way to joy, relief, and liberty.
My Vote as a Stockholder
As a stockholder in Texaco, I would vote that Caltex terminates its operations in South Africa. This is because I believe that in Caltex continuing its operations in the country; it is inherently supporting the government in its crusade to dehumanize the black natives of the country. This is because Caltex will pay taxes to the government, and in addition, the compulsory sale of a given percentage of oil to the government (Ashford University, n.d.). On the resolution proposing that Caltex refuse to sell its products to the government, I would vote that Caltex refrain from selling to the police, or the military. I would rationalize that if shutting down operations was not an option, then at least Caltex would not support the government by not selling it its wares. However, this can be argued as irrational because Caltex would be operating on South African soil and subject to South African laws. Therefore, whilst I would vote against supplying the military with oil, I would know that implementing it would be difficult. I would vote in favor of the third resolution which proposed that Caltex implement the Tutu principles. This is because these principles would encourage foreign companies to take responsibility in ensuring the development of their black workers. The Tutu principles were a form of threat to the South African government where the stay of foreign companies would be dependent on their ability to get involved in their welfare by: allowing the Black workers to form labour unions; live with their families; get educated; and introduce fair labor practices.
Responses by Management of Texaco and SolCal
The managers of Texaco and SolCal should have agreed to the first resolution which proposed that Caltex abandons its expansionist plans and pull out of South Africa. The managers argued that they were acting in the best interests of the South African people because Caltex’s presence in South Africa was beneficial to the black community. The managers presented their argument from a utilitarian view (all parties benefit) that by them remaining in South Africa, both the blacks and the shareholders would benefit (Mill, 2011). However, I oppose their interpretation of the utilitarian theory because their stay in the country was in fact detrimental to the black liberty cause in South Africa.
I understand the decision which management made to oppose the resolution to boycott sales to the police and the military, despite that as a shareholder I would have voted in support of the boycott. This is because Caltex as an organization was still trading on South African soil and therefore subject to the rules of the government. The government had passed rules against restrictions on sales through the National Supplies Procurement Act (Ashford Univesity, n.d.). By refusing to sell to the government, Caltex would have committed a criminal act. The management of Caltex made a wise decision in agreeing to implement Tutu’s Principles in the work place. This would demonstrate that Caltex was interested in advocating for the rights of its black and colored employees beyond the confines of its scope which is the work environment. By advocating for the advancement of black education, enabling them to stay together as a family, and improving labor practices, Caltex demonstrated that it had the interests of the black people at heart.
My Opinion on Overall Company Responsibility
Personally, I do believe that a company’s management is not only responsible for securing high returns for its shareholders; it is also responsible for the social welfare of the citizens where it is situated. It is therefore the duty of management to achieve a balance which ensures that both parties are fulfilled (Renouard, 2011). It is wrong for a company’s management to reap success for its shareholders at the expense of the local community where it is located. It is important that a company consider many factors when considering whether to make investments. For example, legal, profitability, and social factors are crucial when deciding on viable investments. The legal factors and the profitability of the venture are key factors; however, one must also consider the impact of a venture on the local community. It is not right to establish an investment in a place where the establishment contributes to moral and social decay. This can be exemplified by the case of Caltex where the company’s operations in the country did not help the locals in the long run, but instead supported the very government which was responsible for oppressing them. I would therefore suggest that a company be holistic in its approach to making considerations or viable investments by considering not only matters of profit and the law, but also the socio-cultural impact of the investment in the society in question.
Ashford University, (n.d.). A South African investment. PHI445.W2.CaseStudiesReadings.3.pdf
Mill Stuart J. (2011). Utilitarianism. Available at http://www.utilitarianism.com/mill1.htm
Renouard, C. (2011). Corporate social responsibility, utilitarianism, and the capabilities Approach. Journal of Business Ethics, 98(1), 85-97. doi:10.1007/s10551-010-0536-8