Contemporary Business Law 8th Edition by Henry Cheeseman

Exercise 5

Ethics The Reverend Leon H. Sullivan, a Baptist minister from Philadelphia who was also a member of the board of directors of General Motors Corporation, proposed a set of rules to guide American-owned companies doing business in the Republic of South Africa. The Sullivan Principles, as they became known, call for the nonsegregation of races in South Africa. They call for employers to (a) provide equal and fair employment practices for all employees and (b) improve the quality of employees' lives outside the work environment in such areas as housing, schooling, transportation, recreation, and health facilities. The principles also require signatory companies to report regularly and to be graded on their conduct in South Africa. Eventually, several hundred U.S. corporations with affiliates doing business in South Africa subscribed to the Sullivan Principles.
To put additional pressure on the government of the Republic of South Africa to end apartheid, Reverend Sullivan called for the complete withdrawal of all U.S. companies from doing business in or with South Africa. Very few companies agreed to do so.
1. Which of the following theories of social responsibility were the companies that subscribed to the Sullivan Principles following?
a. Maximizing profits
b. Moral minimum
c. Stakeholder interest
d. Corporate citizenship
2. Do companies owe a social duty to withdraw from doing business in countries that engage in discrimination or other human rights violations? Why or why not?
3. Should universities divest themselves of investments in companies that conduct business in countries that engage in human rights violations? Why or why not?