Caltex Case Study
Case Study #4 – A South African Investment Organizational Ethics
May 9, 2011
Case Study #4 – A South African Investment In your judgment, were the possible utilitarian benefits of building the Caltex plant in 1977 more important than the possible violations of moral rights and of justice that were involved? The general reason businesses seek to conduct business in other countries is for increased profit margins or some other type of tax break. Caltex was no different. Depending on what perspective one chooses to examine, whether Caltex’s utilitarian benefit is more important than violations of moral rights and justices is subjective. From a profit standpoint, Caltex’s building and expanding made sense because their existence as a business alone would not politically change apartheid laws that had been in place since 1948. Twenty five percent of the South Africa’s economy relied on the energy sector. Foreign dollars is what the government of South America wanted for its economic stability and in exchange Caltex would be able to conduct business with an attractive profit margin. Apartheid as a political institution inflicted great distress on blacks (80% of the South African population) and violated their human rights. However, Caltex wasn’t conducting business in the name of apartheid, but was going to be partaking in that political institution by its mere existence in South Africa. Not building in the name of abolishing apartheid to give blacks freedom wasn’t going to instantly change the minds of the government and make them stop immediately as the roots of racial inequality ran very deep and long: therefore, not doing business in South Africa would not have politically given blacks any more freedoms than they had before. I am not convinced that Caltex’s direct goal for building in South Africa was to even approach these political issues. However, I do think though, that from a utilitarian perspective, to conduct business in South Africa, with all
May 9, 2011
Case Study #4 – A South African Investment In your judgment, were the possible utilitarian benefits of building the Caltex plant in 1977 more important than the possible violations of moral rights and of justice that were involved? The general reason businesses seek to conduct business in other countries is for increased profit margins or some other type of tax break. Caltex was no different. Depending on what perspective one chooses to examine, whether Caltex’s utilitarian benefit is more important than violations of moral rights and justices is subjective. From a profit standpoint, Caltex’s building and expanding made sense because their existence as a business alone would not politically change apartheid laws that had been in place since 1948. Twenty five percent of the South Africa’s economy relied on the energy sector. Foreign dollars is what the government of South America wanted for its economic stability and in exchange Caltex would be able to conduct business with an attractive profit margin. Apartheid as a political institution inflicted great distress on blacks (80% of the South African population) and violated their human rights. However, Caltex wasn’t conducting business in the name of apartheid, but was going to be partaking in that political institution by its mere existence in South Africa. Not building in the name of abolishing apartheid to give blacks freedom wasn’t going to instantly change the minds of the government and make them stop immediately as the roots of racial inequality ran very deep and long: therefore, not doing business in South Africa would not have politically given blacks any more freedoms than they had before. I am not convinced that Caltex’s direct goal for building in South Africa was to even approach these political issues. However, I do think though, that from a utilitarian perspective, to conduct business in South Africa, with all
References: Velasquez, M. (2002). Business ethics: concepts and cases. Upper Saddle River: Prentice Hall