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A Case Study on a South African Investment - Essay Example

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A Case Study on a South African Investment

Such a process creates a situation for the decision-maker that he or she has never done before (Ferrell, Fraedrich & Ferrell, 2008). On the other hand, business ethics is defined as applied ethics, and is the application of the knowledge of understanding what is good and right in the context of business, transactions and other related situations (Velasquez, 2012). The beliefs, values and goals of a company reflect what the management understands about handling the business through moral perspectives. However, many companies and other businesses have been labeled negatively due to the rise of scandals involving unethical and illegal operations, which challenges the trust ratings of the public (Ferrell et al., 2008). Another is that not only do companies suffer but entities they are associated with also get negative publicity just by being tied to them. Thus is the strong need for the implementation of strong business ethics in large groups and companies. A case study involving a moral and social dilemma that needs well-thought actions but is at the mercy of the government is presented (Velasquez, 2012). In the 1970’s to the 1980’s turmoil has been brewing in South Africa regarding the apartheid system being practiced, as well as the oppression of the majority of the population (blacks) by the minority (whites). US oil companies Texaco, Inc. and Standard Oil Company of California (SoCal), joint owners of Caltex Petroleum Co. were pushed by the Interfaith Center on Corporate Responsibility, coordinated and lead by project director Tim Smith to pull out and terminate their operations in South Africa due to extreme and unfortunately legal racial discrimination among the black Africans by the whites. Such includes the complete segregation of blacks from whites, the deprivation of basic human rights such as voting rights, the right to claim a parcel of land, being underpaid, among others (ibid). Owners of Caltex insist that they were indeed committed to the improvement of their employees by increasing their wages and narrowing the gap between white and black Africans’ incomes (Nickel, 1968). If they withdraw from operating and expanding in South Africa, the results would greatly affect all employees of Caltex, both black and white South Africans. However there were still constraints that were beyond their control, and were implemented by the South African government. Among these are: the segregation of where the blacks live from the whites, the provision of strategic products to the government as per the law, and other forms of support of the apartheid law (Smith, 1971). The eventual imposition of martial law in South Africa in 1985 caused a severe recession of the economy, civil unrest, and an increase of unemployment by up to 35% (Velasquez, 2012). Western nations sanctioned the government by not allowing the renewal of loans of private companies, but this was met with retaliation by not repaying any of their foreign debt starting September of 1985 (ibid.). The possible utilitarian benefits of the Caltex 1977 expansion is not as important as the possible violations of moral rights and justice that could be involved with it. Yes, the expansion would have been beneficial to the employed citizens, and that it would put food on their tables, but it still does not give them any proper rights at all, and that no matter how much they get promoted, they were still lower-class citizens (Smith, 1971). Also, there would be the eventual unrest due to the people realizing that they are the true owners of their land, and that they have been treated unjustly for so long. There is also almost no ...Show more

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In the 1970’s to the 1980’s turmoil has been brewing in South Africa regarding the apartheid system being practiced, as well as the oppression of the majority of the population by the minority. …
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