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Write 4 page essay on the topic A South African Investment Paper.Download file to see previous pages... The value of Caltex tripled in the subsequent eight years. During its operations in South Africa
Write 4 page essay on the topic A South African Investment Paper.Download file to see previous pages...
The value of Caltex tripled in the subsequent eight years. During its operations in South Africa, it faced three major resolutions by a section of its stockholders, to whom the issue concerned were rights and justice for non-white community in South Africa. The resolution ranged from closing operations in South Africa to making positive contribution to the economic and social uplifting of the Apartheid affected society in the country through four Tutu’s principles. Although, the resolutions were never passed but presented Caltex and other foreign multinational companies with challenges of adhering to the South African laws, provide returns to the stockholders and contribute to the society. This essay discusses the challenges faced by the non-white community and the multinational companies in South Africa, if a better decision could have been made by Texaco and SoCal with respect to the Apartheid affected society. II. Benefits or Violation of Moral Rights and Justice When Texaco and SoCal entered the South African market through a joint venture Caltex, being for-profit organizations, their motive in South Africa was profit-making. However, the question arises whether the utilitarian benefits of operations in South Africa should have been derived at the cost of violation of moral justice and rights of society. There are certain principles which guide the ethical decision making. The long-term self-interest principle prohibits action which may not be in the long-term interest of the organization. The principle of utilitarian benefits asserts that an action should never be taken, if it does not transform into greater good for society. The principle of government obligations states that an action should not be taken if it violates the applicable law. The law here represents moral standards of society (Williams, 2006, pp.110-111). These principles, as can be seen, contradict in the situation of South Africa. Caltex, as a steward of society, is responsible for the greater good of its stakeholders i.e. shareholders, employees, suppliers, customers and society as a whole. The appropriate action, which Caltex could have taken, is to refrain from building the plant until the South African Government has made amendments in its policies towards the non-white community which formed a major section of the company’s workforce. The reason is, even if the company remains operational in the conflicting situation, the profits will eventually diminish as they cannot sustain in the long run. III. Response to the Resolutions The first resolution in 1977 demanded Texaco and SoCal to terminate their operations as quickly as possible until and unless the South African Government ends its apartheid policies and takes steps towards full legal, political and social rights for the majority population. The vote of a stockholder ought to have been in favor of this resolution, because the government policies are likely to affect the profitability of the companies in the long run from their operations in the country. The increasing unrest, if prudently analyzed, will affect the profitability of Caltex. The second resolution in 1983 demanded Caltex to stop selling petroleum products to the military or police of South Africa. As a stockholder, the vote should have been in favor of the resolution even if it demands an outright violation of National Supplies Procurement Act, recently enacted and Price Control Act, 1964.