Ethical Principles in Business

i. the whites over the 80% ..total domination by 20% of the population.` ` ` ` In 1948 the whites-only National Party won control over South Africa The establishment of Apartheid.the blacks The Blacks were without any rights in their ancient motherland At the height of the Apartheid Caltex a U S Oil Company was very much in South Africa .e.

. some oil went for the use by the Govt.` ` ` Caltex operated several oil refineries under Texaco & Standard Oil in South Africa and they were expanding further South Africa depended on oil for 25% of its energy needs. a stiff tax regime meant that a large chunk of Caltex revenue went to the Govt. There were native protesters who were jailed including Nelson Mandela .

` ` ` Many Standard Oil & Texaco shareholders protested against this policy of Caltex and wanted Caltex to stop its South African operations ±after all the South African Prime Minister John Vorster openly said that they ran a govt. for the whites only The management of Caltex did not agree Texaco believed that Caltex operations were in the best interests of all the races.a closure of these operations would weigh heavily on non-whites .

the issue whether companies should support Govts.` ` ` The argument of Caltex was that foreign operations boosted the black incomes by about 150% Bishop Desmond Tutu.an Anglican bishop proposed a non-violent protest and there were protests & marches Whether Caltex should remain in South Africa was now a moral issue.practising laws like the Apartheid .

Ethics of Virtue .` ` ` ` Caltex trotted out the utilitarian view that if the company left the blacks would suffer greatly Caltex claimed that they took care of the blacks in what they called the ethic of care The people of South Africa called the protesters like Nelson Mandela as operating on the ethics of virtue Ethics of Care vs.

Ford President. determined to regain the lost market with the Ford Pinto Pinto would weigh less than 2000 pounds. cost less than US $ 2000 and could be launched in 2 instead of the customary 4 years .` ` ` During the middle of he last half century Ford Motors was losing market share to the Japanese Lee Iacocca.

` ` ` Pinto was a rush project and at the factory crash tests revealed that its rear mounted gas tank would explode at an impact of less than 20 miles an hour The Govt. regulations required that such explosions were acceptable only if the impact was greater Ford did a cost-benefit analysis .

` ` ` Ford calculated that the cost of modifying the tank of 12.15 million .15 million These US $ 137 million will be passed on to the purchaser in the form of increased price Ford came to the conclusion that it would not be fair to charge an increased price of US $ 137 million to give them a benefit of US $ 49.5 million Pintos planned would cast US $ 137 million and if it was assumed that the modification would save 180 lives the benefits will be US $ 49.

` ` ` ` In the decade that followed 60 people died and double that number sustained serious injuries from burns Pinto was finally discontinued Ford managers had based their decisions on what is know as utilitarianism It is a philosophy that actions and policies be based on the benefits and the costs they would impose on society .

1832) is considered the founder of this view ± he wanted an objective basis for making value judgments as a commonly accepted social norm for social policy & legislation In summary the principle holds that ³ an action is right from an ethical point of view if and only the utilities produced by the act is greater than the sum total of utilities produced ³by any other act by the agent in its stead .` ` Jeremy Bentham (1748.

` ` The assumption was that it was possible to measure the quantum of benefits produced by an action and subtract from them the quantum of harms produced by the same action Like 500 units of benefits produced by an act in a factory on its workers will entail 700 units of harms resulting in 200 negative units of utility .

` ` The only basis of right & wrong here is based on the outnumbering of the costs and also the benefits of any alternative course of action by the benefits of the chosen action .no other basis Only the immediate and direct consequences of actions are taken into account .

` ` ` Utilitarianism is an elegant and attractive theory It can be nicely used to evaluate the govt. policies and public goals It can be a ready guide about what is moral conduct by highlighting the arms and benefits of any action.can it go an little deeper? .

` ` ` ` Utilitarianism is the basis of cost-benefit analysis in economic terms However can we calculate the ³real´ benefits of a lush green forest? Utilitarianism emphasises efficiency.desired output at minimum cost Do we have to conclude that the ³right´ course of action is only the efficient one .

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