MULTINATIONAL COMPANIES AND THEIR CORPORATE SOCIAL RESPONSIBILITIES TO THEIR HOST COMMUNITIES (A CASES STUDY OF SHELL COMPANY, RIVERS STATE)


MULTINATIONAL COMPANIES AND THEIR CORPORATE SOCIAL RESPONSIBILITIES TO THEIR HOST COMMUNITIES (A CASES STUDY OF SHELL COMPANY, RIVERS STATE)

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Abstract

Organizations gain social license to operate in a given neighborhood, thus the government of
Nigeria, her agencies and the multi-nationals make use of and exploit the Niger Delta Area of
Nigeria. Communities.This is considered the thrust of this study that assessed the extent, constraints and
challenges to the adoption of the principles of corporate social responsibility in the Niger
Delta Area. Data were collected and collated based on the use of sets of questionnaires,
interviews and observations. Findings include that the area Niger Delta is poor in
development given the unwillingness of the government to sacrifice expected high returns on
petroleum exploration for the development of the area and lack its of knowledge of and will
power to make and execute uninformed decisions concerning the exploration and
management of the activities of multi-national companies operating in the area. It therefore
recommends a joint action plan and implementation between all participants and stakeholders
in the oil business in the Niger Delta area based on encouraging the multi-national companies
to operate based on the provisions of committee on economic development on social
responsibility of business corporations.Communities
Keywords: Social License, Social responsibility, Bio-diversity, Ecosystem, Pollution control,
Poverty reduction and Community development.Communities

1. Introduction

Globally, organizations are concerned with value re-investment to the society in appreciation
of the contributions of the society to their growth, sustenance and survival. Hence attention is
further directed to the potential consumers as well as non consumers of corporate offers as
marketing concept philosophies are integrated into societal marketing concept as means of
achieving desired level of social responsibility. Given this as the thrust of operations,
corporate attention is increasingly being given to issues like equal employment opportunity,
thus it is easier for corporation to be re-oriented to corporate social responsibility
International Review of Social Sciences and Humanities, Vol. 6, No. 2 (2014), 214-238 215
philosophies.

But in the developing economies represented by Nigeria; consumers are
unwilling to sacrifice convenience and pay potentially higher prices to protect the
environment as they lack knowledge to make informed decisions dealing with their purchase,
use and disposition of product; pollution control; energy and natural resources conservation
and consumers’ and workers’ protection –Preston and Post (1975). Businesses thus operate on
the philosophy of maximization of positive effects of their activities on the society as the
negative impacts of these activities are minimized-Farrell and Fraedrich (1997). This is the
thrust of corporate social responsibility as considered an obligation among businesses in the
advanced societies of the globe.

2. Frame Work of the Study

Corporate bodies in their desire to achieve sustainable development and improve the quality
of life, execute operations in such manners that ensure the protection of natural environment
without however relegating to the background the desire to make economic progress–
Rondinelhi and Vastag (1996) and Berkowitz, Kerin, Hartley and Rudelius (2000). This is
irrespective of whether or not consumers are socially responsibly in their purchases, use of
product and unwilling to sacrifice convenience and pay potentially higher prices to protect the
environment as they lack knowledge to make informed decisions dealing with the purchase,
use and disposition of environmentally sensitive products-Speer (1997), hence, consumers
are accountable for unethical and socially irresponsible corporate behavior unlike in the
developed societies where marketers and consumers are accountable for ethical and social
responsible behavior-Berkowitz, Kerin, Hartley and Rudeluis (2000). Thus, the de-emphasis
for profit and stakeholders’ responsibilities in favour of societal responsibility at best the
optimization of both is a pre-requisite for the needed macro economic development of Nigeria
as firms in the petroleum industry begin to show inclination for social audit.

3. Objective of the Study

The operational efficiency of the national economy (economic development) –Nigeria is a
function of the impact of the activities in petroleum industry on the larger society vis-à-vis the
effects of these impacts on the drive for corporate social responsibility.
Given the above, this work has the objective of assessing comparatively the corporate social
responsibility activities of participants in the Nigeria petroleum industry with a view to
determining their respective impacts on the economic development drive of the Niger Delta
people.
To achieve this objective, this work considers the following sub-objectives:

 Identification of participants’ social expectations and the rational for engaging in
social responsibility activities

 Identifying this social responsibility causes (activities) that are consistent with these
participants’ mission

 Showcase these participants’ objectives and priorities for actions and activities
undertaken in their desire to actualize corporate objectives.Communities

 Specify the types and amount of resources considered adequate for the actualization
of corporate social responsibility objectives; and

 Appraise the social responsibility programmes and activities executed by these
participants’ as basis for projecting into the future. Communities
Oko A.E. Ndu et al. 216

4. Significance of the Study

The result of this exercise will aid the concessionaire (Government of Nigeria) and
transmultinational corporations to evaluate their level of commitment to their corporate social
responsibility objectives and functions in the light of their dependency on the environment as
source of inputs and market for corporate outputs.social responsibilities
It will also highlight the degree of neglect of government as a regulatory agent in the
execution of its social responsibility duties.social responsibilities The harmonizations of the above quality
environment management programmes will catalyze the Niger Delta area and Nigeria to high
height in its quest for economic development.social responsibilities

5. Research Hypothesis

The exercise is built on one hypothesis stated in null form thus:
H0: The poor appreciation of corporate social responsibility philosophies among the
concessionaire and operators in the Nigeria Petroleum industry does not significantly
impact in the Niger Delta Area of Nigeria economic development strive.social responsibilities

6. Literature

Businesses exist for the purpose of satisfying the interest of shareholders based on the
satisfaction of the market. This is the hub of the marketing concept philosophy. social responsibilities Thus,
Frielman (1970) argues that there is one and only one social responsibility of business –to use
its resource and engage in activities designed to increase its profits so long as it stays within
the rules of the game, which is to say, engages in open and free competition without deception
or fraud.social responsibilities To ensure healthy and fraud free competition, businesses have always policed
themselves on the theory of self control-Berkowitz, Kerin, Hartley and Rudelius (2000).

social responsibilities Self

regulatory rather than market or government mechanisms of control are for protecting
personnel information-Swire (1997). Unfortunately however, most rules and regulations
formed due to public outcries have threatened profit maximization, thus the well being of
shareholders –Armstrong (1977). Most of these outcries relate to the obligations organizations
have to those whose efforts and activities can affect the achievement of corporate objectives
as stakeholders, as well as members of the larger public in respect to preservation of the
ecological environment and the public welfare.

social responsibilities

Firms in a bid to accommodating the various interests of the different publics incline to
marketing efforts to produce, promote and reclaim environmental sensitive products-Davis
(1998), Menon and Menon (1977) and Hartmao and Stafford (1998). This inclination is
described as corporate social responsibility.

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