Henry Gladstone, head of Human Resources for African Gold, Inc. In South Africa, examined the stack of newspaper and business magazine clippings on his desk. In the last few weeks, there had been numerous stories about the company’s decision not to continue paying transport, coffin, and funeral costs form employees dying from non-mining causes. The decision was linked to the depletion of the funding source normally used to cover these costs.
In the last two years, the fund had decreased rapidly cause of the increasing number of HIVE/AIDS deaths among the miners working for African Gold. The company planned to continue its education programs on HIBAITS for employees. Although African Gold did not have exact figures of the prevalence of HIVE/AIDS among its present labor force, recent company data indicated that, country-wide, there was an average of 20 funerals a month for workers who had succumbed to the disease. The average cost of a funeral is 10,000 rand (about $1250).
Additionally, the costs of the company’s medical aid and disability programs were also skyrocketing because of Wealds-related diseases (e. . Tuberculosis, pneumonia). Gladstone also realized that these amounts would be even higher if the costs of absenteeism, productivity losses, recruitment and training were calculated. The increased costs were coming at a time when the profits of many gold-mining companies were failing because of the growing strength of the South African currency (I. E. The rand). The price of gold in real terms fell 6 percent over the last few quarters.
Decreasing profits hit smaller mining companies like African Gold greater than the largest companies. The number of Wealds-related deaths as a proportion f total deaths in South Africa had virtually doubled from 4. 6 percent to 8. 7 percent between 1997 and 2001. South Africa has one of he fastest growing HIVE epidemics in the world with an estimated 1700 new infections diagnosed daily. Additionally, the mining industry in South Africa has the highest prevalence of HIVE/AIDS infections compared with other industries.
It is estimated that 24 percent of underground miners have HIVE, compared with 19. 9 percent of the remainder of the South African working population. The change in policy holds potentially devastating financial implications for families of mine workers, many of whom live hundreds of miles away from African Gold’s mining operations. Historically, and even today, the mining industry in South Africa relies heavily upon migrant labor coming from neighboring countries, such as Lesotho, Botswana, Malawi, Zanzibar, Swaziland, and Macaque.
Because of its reliance on inexpensive migrant labor, many of the workers live in housing at the mine site and spend months away from their families. Some health experts believe that this may contribute to the higher incidence of HIVE/AIDS among mine workers. Most families cannot afford to pay for the funerals, since the average mine worker earns about 2000 rand per month (about $250). In addition to the negative media coverage, Gladstone was also faced with challenges from the National Union of Mine Workers.
In a memorandum sent to Gladstone, the union accused the company to hiding behind excuses to avoid dealing with the problem of HYBRIDS in the workplace. They argued that the company’s decision was unethical and that African Gold could well afford to continue the funeral benefits for its workforce. In the memorandum, the union threatened further action f the company did not reinstate the benefits. BUSS 1250 HARM ROI Case: African Gold, Inc. – Ethics and AIDS in the Workplace Questions 1 .
What aspects of the external environment is African Gold, Inc. Confronted with? Give specific details from the case for each aspect. 2. Which parts of the internal environment of the company are most affected by the external environment? Give details from the case to back up your choices. 3. Did African Gold make the right decision? Defend your answer. 4. What basic HARM responsibilities, if any, does African Gold have to its employees? Why or why not? Consider all aspects of human resource management identified in our course outline. In South Africa there is no legal requirement for employers to provide benefits for employees with WIDTHS. ) 5. What human resource management challenges might any Canadian company face when operating globally? DUE: Hard copy in class: Wednesday, 18 September 2013 Please hand in individual written answers to the five (5) questions we have discussed in class. Please hand in a Word document; it is much easier for me to read. The case and questions are posted on the course website.
