8/3/2019 Case 2- The Unocal Case

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ID#: 406000989

Chairman of Unocal Roger Beach took a contingency approach when he severed ties

with the US and moved the company, thus turning it into a cultural organization. This move

brought about jobs to unemployed persons, as well as helped to develop underdeveloped

countries, and also gave Unocal the opportunity to save millions.

In todays markets, these types of moves are called outsourcing, and in most cases,

American businesses see this as a way to pay out less money in wages. This move can also be

seen initially as a good business strategy, since little to no competition equals greater profit, and

less wage payout equals greater savings. But though this can be considered good strategy, it

can also be viewed as unethical or as a form of exploitation, since these new workers would

now be expected to complete the same tasks for lower pay. Businesses today even though they

outsource their work for many reasons (E.g. Greater output in production, better customer

service etc), do not sever ties with America which is considered the corporate capital of the

world.

Unocals view of social responsibility was classical, since they acted in ways that were

beneficial to themselves but not to their society in the long-run. Their only social responsibility at

the time the decision to relocate was made, was to maximize profits. Their organization was

socially responsive towards the people of Burma and the other countries the business moved to

who wanted jobs, but there was none towards the American citizens with bills to pay and

children to feed who became unemployed as a result. Unocal had responsibilities to many none

of which were in any way fulfilled, and their decisions cannot safely be said to have followed any

ethical approach.

Unocal failed to fulfill its responsibility to its American employees and home country (America)All of the non-managerial American citizens employed by Unocal would have become

unemployed since the business was no longer operating out of the US. Middle managers were

8/3/2019 Case 2- The Unocal Case

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ID#: 406000989

repositioned in regional offices and those who could not or did not want to, were forced to quit

their jobs. The result was a decrease in Americas portion of the profits and an increase in its

unemployment rate.

Unocal failed to fulfill its responsibility to its host country (Burma)Since ties were severed with the US, the country was put at risk for war, political division

and currency fluctuation. Burma was now at risk of becoming even more underdeveloped and

impoverished, since Burma based American companies were forced out of the country after

becoming targets for international pressure groups. This also resulted in an increase in Burmas

unemployment rate. The countrys military government came under heavy scrutiny and was

languished in political and economic isolation after being boycotted by US legislation for

unacceptable human-rights practices. This resulted in Burmas inability to export to the US

which would have been a great source of income for the country and all of its other businesses.

Unocal failed to fulfill its responsibility to its shareholders and current employees

With so much pressure coming from US entities and so many issues now plaguing

Unocal and Burma, the organizations shareholders were now at risk of becoming bankrupt, and

the present employees at risk of becoming unemployed should the company fail to succeed.

This would have resulted in yet another loss for Burma and another rise in the countrys

unemployment rate, and with companies being forced out of the country, there would be no

available vacancies for so many people to fill.

All of these problems were the result of one thing, Roger Beachs decision to sever ties

with the US altogether. So to avoid all of these satellite problems, Roger Beach could have

remained a part of the US market, and still attempted to expand the business to Burma and all

the other countries, thereby securing the jobs of all the American citizens, while bringing jobs to

the underdeveloped countries, and becoming a part of their development and growth