Ethics is a philosophical study of the moral rules and values which guides people in business. Business ethics on the other hand is the dos and don’ts in business activities. In my opinion, moral rights and justice were far much above the expansions of the South Africa Caltex company (ecollege.com, 2011). The building of the Caltex plant in 1977 had utilitarian benefits to the stakeholders. But the company maintained that moral rights and justice were far beyond the company expansion move. The company threatened to retreat from the South African contract if the government did not provide similar working grounds for the whites and blacks (Velasquez, 2006). Caltex Company was against racism which was experienced then in South Africa (ecollege.com, 2011). The company had realized the necessity of recruiting and retaining their work force.
The main duty of Caltex Company in the South Africa was the responsibility of making sure that the black South Africans are not oppressed. Caltex Company supported the code of conduct written by Leon Sullivan (Velasquez, 2006). The code of conduct stated that there should be no segregation of people depending on races in all eating, comfort and working facilities. Instead there should be equal and fair employment practices, equal pay for equal work, a leveled administrative duties for all employees, increasing the blacks on the management positions and improving the quality of work in housing, transportation, recreation and health facilities (ecollege.com, 2011).
The possible violations perpetrated by the government involved poor working conditions for the blacks. The black South Africans could not vote or bargain collectively since they lived in racially segregated areas and their wages were poor. The statistics also shows that thirteen percent of the land was set aside for the blacks while eighty percent for the whites. Caltex Company was committed to reverse such differences in their workforce. In order to achieve their dream they replaced the white positions with blacks and increased the wages of the blacks tremendously (ecollege.com, 2011). In general Caltex Company was strictly against apartheid in the South Africa.
If I was a stockholder in Texaco or Standard Oil and I had an influential position in the companies, I would advocate for the termination of the company operations in South Africa. This is an ethical dilemma in that the potential benefits I’m getting from the shares will be lost, but at the same time there will be freedom of the South African blacks. It is ethical that freedom and fair working condition prevails to all members of the society (ecollege.com, 2011).
In my opinion, Caltex should cease selling oil products to the military and police South Africa. This should be done despite the government stringent rules that would make business environment unfavorable. The move however would be worth as it will secure freedom of the South African black citizens. It was unfortunate to notice that the same government which was supposed to fight for all was supporting the minority whites to frustrate the blacks.
The opinion of Caltex Company on moral rights was supposed to emulate the Tutu’s principles which advocated for fair working conditions for the whites and blacks. Caltex Company was however against apartheid they instead supported interracial marriages which discouraged racial discrimination (Velasquez, 2006). It was so humiliating to see how the blacks were separated from the whites and how they were denied their rights. The political movements of the blacks were limited to the blacks only. The rules of the whites were predominant. The Tutu principles stated that companies were to ensure their black workers could live with their families, recognize black labor unions, oppose influx control over labor and ultimately enforce fair labor practices to all their staffs (ecollege.com, 2011). The human rights activists felt that these four principles surpassed the Sullivan principles and they therefore urged companies not to support them. Bishop Desmond Tutu was black South African religious leader renowned for his just course of fighting against apartheid (ecollege.com, 2011).
There were some varied reactions towards Company terminating its operations in South Africa. The main challenge was from the managers who feared losing their jobs in case of the close down. This was a dilemma which required them to think straight. After a thorough consideration they settled that it was not appropriate to shut down the company (Velasquez, 2006).
Managers of Caltex Company were against the company not selling fuel products to the military or police of the South Africa. To them the action was illegal and could lead to a breach of contract between them and the government. They also insisted that the government had the power to mandates to demand the supply of products. This was possible since they argued that Caltex had no rights to impose any restrictions since military and police departments were credit worthy customers.
At some point managers justified the Tutu principles however they had some personal interest on the same. Since Tutu principles lobbied for equal rights to all, they felt that their working conditions would be improved and that the principles could put to an end the racial discrimination which frustrated their efforts (Velasquez, 2006). For this reason, they made sure that Caltex fully implemented the Tutu principles. The move also enabled Caltex to positively contribute towards equal economic and social opportunities for all citizens in South Africa. They argued that Tutu principles could enable South African companies to improve their working conditions for the majority of the people. The business was to include the family type accommodations, black trade unions were to be recognized as well as the right of the employees. Finally fair labor practices was to be practiced throughout their operations.
In my opinion, the management of Caltex Company had a duty to ensure that the company yielded high returns for its shareholders and at the same time maintains high ethical standards. The ethical dilemma in this case was the shareholders demand for high returns on investments while the ethical standards forced the company to terminate its operations in South Africa (Velasquez, 2006). And after deciding that the company should proceed with their operations, the issue of equal treatment for all came up. This decision involves standing by what is right. In my judgment, it is not ethical for the shareholders to continue enjoying high returns at the expense of the oppressed black populations. This was the perspective of Caltex Company towards apartheid. Caltex Company was committed to balance the treatment of workers and at the same time raise the shareholders’ return and therefore establish a win-win situation.
It was therefore not appropriate for Caltex Company to look at the ethical dilemma primarily on the law perspective. This is because the idea would not tally well with the business perspective which seeks to consider the investment rate of returns vs. the decision making process. And although Caltex Company was sensitive in moral the ethical issues at times made it difficult to take decisions. This consequently made the company together with its associates to suffer. Reflecting on Caltex Company issue in South Africa and its business ethics, not many companies would have implemented this type of decisions. Most companies would have looked at it from the positive perspective where they maximized their gains. Business ethics had been and still continues to be the expectations of many businesses but they are rarely practiced.