Lafarge, ISIS and the Syrian Civil War: Business in the Face of Terrorism

by: Andrew Hoffman

Publication Date: May 8, 2019
Length: 18 pages
Product ID#: 3-504-559

Core Disciplines: Ethics, International Business, Leadership/Organizational Behavior, Social Impact, Strategy & Management, Sustainability

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Teaching Note

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In 2007, global building products company Lafarge purchased a dilapidated factory in northern Syria and invested $680 million to build and operationalize a cement plant, thus establishing a Middle East presence. But Lafarge did not foresee the political instability caused by the escalation of the Syrian civil war between President Bashar al-Assad’s military and Syrian rebel groups. Additionally, the terrorist group known as Islamic State in Iraq and Syria (ISIS) entered the region, utilizing brutal tactics such as capture, torture, and beheadings, to spread fear and gain territorial control.

By 2012, Lafarge had a difficult decision to make: close the plant or keep it operational? Closing the plant would result in a lost investment and could put local Syrian workers and their families into dire financial situations. Conversely, keeping the plant operational could risk the safety of employees and raise critical questions about Lafarge’s ethical responsibilities amid the crisis.

Teaching Objectives

After reading and discussing the material, students should:

  • Understand the influence of a company’s values in shaping its long-term development strategy.
  • Define key factors influencing Lafarge’s decision to enter Syria and arguments for and against continued operations.
  • Explain the overall cement industry globally and reasons why Lafarge focused on geographic expansion.
  • Articulate a stance on the role of multinational corporations to operate in politically unstable regions and their social responsibility if they do so.
  • Identify social and financial risks associated with development in politically unstable regions.
  • Understand limitations of focusing solely on shareholder value when making corporate decisions with ethical implications.