South African Investment

Topics: South Africa, Ethics, Petroleum Pages: 4 (1362 words) Published: November 3, 2008
Introduction and Thesis
In the late 1970’s and early 1980’s, Caltex (an affiliate oil refinery of Texaco and SoCal) started their operations in South Africa. In this paper, I will identify and explain the benefits and the negatives as to why Caltex should build there plant in South Africa. I will also discuss how I would vote on three of the resolutions made by the stockholder’s as well as discuss how the managers of Texaco and SoCal should have responded. Finally, I will address the management responsibilities as it relates to this case. Utilitarian benefits of building the Caltex plant in 1977

When Texaco and SoCal decided to build there refinery plant, Caltex, in South Africa in 1977, there was much to consider. First of all, the South Africa was ruled by government upheld apartheid legislation. According to the textbook, Business Ethics: Concepts and Cases, the apartheid system, “deprived the entire Black population of all political and civil rights: They could not vote, could not hold political office, could not unionize, and had no right to freedom of assembly,” (Velasquez, p. 58). Despite this obstacle, Caltex was built and began operations. Caltex believed that by opening operations in South Africa they could provide the people with some economic opportunities that they could not have if they did not. According to the case study, “the managements of both Texaco and SoCal argued that Caltex was committed to improving the economic working conditions of its black employees and their continued presence in South Africa did not constitute and ‘endorsement’ of South Africa’s ‘policies’,” (para. 5). By declaring that there presence in South Africa was in no way evident in support with the government policies, Caltex gave the impression of a utilitarianism approach. According to the textbook, utilitarianism is “a general term for any view that holds that actions and policies should be evaluated on the basis of the benefits and costs they will impose on...
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