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

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

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. 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. Keywords: Social License, Social responsibility, Bio-diversity, Ecosystem, Pollution control,

Poverty reduction and Community development.

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:

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

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

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

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

5. Appraise the social responsibility programmes and activities executed by these participants’ as basis for projecting into the future.

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.Multinational companies 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.Multinational companies 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).Multinational companies

social responsibilities Self

regulatory rather than market or government mechanisms of control are for protecting personnel information-Swire (1997). Multinational companies Unfortunately however, most rules and regulations formed due to public outcries have threatened profit maximization, thus the well being of shareholders –Armstrong (1977).Multinational companies 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.Multinational companies

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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