The principles of a responsible management team Essay Example

in terms of costs and risks. They then actively involve stakeholders to drive business innovation. Ultimately, executives recognize that voluntary action has limitations and collaborate with other organizations including governments and competitors to influence the overall business environment.

The goal is to make responsible behavior financially viable while achieving better corporate outcomes.The effectiveness of current models and tools for companies' progress and managerial obligations is uncertain. However, business leaders are increasingly demanding systematic and effective models and tools to address new goals of social and environmental stewardship. To promote new academic research on corporate citizenship relevant to practitioners, it is important to consider approaches for gaining support from academic institutions.

In 1907, the Anglo-Dutch oil company Royal Dutch Shell was formed through a merger between the Royal Dutch Petroleum Company (60%) and Shell Transport and Trading Company (40%). These two companies operated separately until 2005 when they combined to form Royal Dutch Shell, also known as the Royal Dutch Shell Group or simply "Shell" or the "Group." Foreign subsidiaries had their own names or variations of the Shell name. The company is registered in England and Wales with headquarters in The Hague, Netherlands, called Royal Dutch Shell plc.

With over 101,000 employees across more than 90 countries and regions, it is a global group of energy and petrochemicals companies. In terms of market capitalization, operating cash flow, and oil and gas production, Shell ranks among the largest independent oil and gas companies worldwide.Our primary focus for oil and gas production is concentrated in our core countries, which include Australia, Brunei, Canada, Denmark, Malaysia, the Netherlands, Nigeria, Norway, Oman, the UK, and the USA. Additionally, Russia has emerged as

a new heartland with Sakhalin II becoming operational in 2009. The annual report of 2009 suggests that Qatar will also become a heartland in the near future.

Regarding our products (as stated in

Product

), Royal Dutch Shell plc markets them under various brand names like Shell V-Power and Shell Fuel Save. We offer lubricant products to clients in transportation sectors such as passenger cars, trucks,and buses. Our services extend to industries like manufacturing,mining,power generation agriculture,and construction. Moreover,the company provides fuels and specialty products/services to commercial clients including technical services to the marine industry.It also offers liquefied petroleum gas and related services to domestic ,commercial,and industrial clients.In addition,it supplies transportation ,industrial,and heating fuels along with related services to approximately 200000 customers.Furthermore,it delivers around 11 thousand metric tons of bitumen products.

The growth and development of multinational corporations in third world countries heavily relies on corporate social responsibility.This collaboration between these two concepts can bring mutual benefits globallyThe text highlights the challenges in effectively regulating and implementing corporate social responsibility (CSR). The definition of CSR may vary based on individual or group perspectives but has evolved over time. Manakkalathll & Rudolf (1995) define CSR as organizations' obligation to conduct business while respecting individuals' rights and promoting human welfare. Christian Aid (2004, cited in Pendleton 2004) defines CSR as a voluntary initiative aimed at promoting self-regulation instead of national or international regulation. Blowfield (1995) notes that the understanding of CSR has become more positive with time, recognizing its benefits through successful implementation. Pendleton (2004) suggests that initial CSR efforts were a response to public pressure and media exposes of unethical corporate behavior, aiming to improve practices. Pendleton (2004) credits

Shell for coining the term "contemporary CSR" following their 1995 oil spill in Nigeria, which Monshipouri, Welch & Kennedy (2003) also highlight as an instance of irresponsible behavior by Royal Dutch/Shell. Nowadays, managers' awareness of CSR is influenced by public pressure, interest groups, legal concerns, and media coverage (Deresky 2006).The lack of a universally accepted moral standard across cultures engenders debate surrounding the definition of social responsibility and determining a company's obligations. One perspective argues that multinational companies should adopt CSR codes based on ethics and ethical standards. According to Levit (2006), CSR codes are self-regulatory instruments that address social, environmental, and human rights impacts while aligning with a company's culture and ethical considerations. Manakkalathil & Rudolf (1995) further explain ethics as the clarification of what promotes human welfare and the necessary behavior to achieve it. However, due to variations in social values worldwide, establishing a universally accepted code of conduct or moral universalism in the global market is challenging. Consequently, defining universally recognized ethical standards for multinational corporations (MNCs) poses difficulties, leading to debates and criticism regarding how MNCs should implement a CSR code domestically and internationally, with some questioning if such efforts are worthwhile. Nonetheless, implementing effective CSR practices is crucial for companies today as it not only benefits development in third world or developing countries but also enhances an organization's reputation and financial performance when properly adhered to.Bennett (2002) suggests that international company operations can provide stability by addressing concerns faced by marginalized individuals who do not benefit from them. This can be achieved by implementing poverty reduction programs, revenue-sharing strategies for funding social development foundations, and providing environmental reparations. According to

Blowfield (2005), corporate social responsibility (CSR) is now interconnected with international development goals such as poverty relief and sustainability. Despite the high costs involved in implementing a CSR strategy, developing a strong CSR profile has numerous advantages for companies. It can greatly benefit both their bottom line and reputation.

The significant environmental impacts and human rights issues in third-world countries, particularly in the Niger Delta, cannot be ignored. Over the past 30 years, more than 400,000 metric tons of oil have spilled into the rivers and soils of this region due to aging facilities, inadequate maintenance, and human error. These spills have had devastating effects on natural resources that are crucial for local livelihoods.

A report by Amnesty International (AI) released in June 2009 reveals dire consequences resulting from these spills. People living in the Niger Delta are forced to use contaminated water for drinking, cooking, and washing. They have no choice but to consume fish that is contaminated with oil and other toxins.The farming land they rely on is being destroyed while they breathe in air filled with the scent of oil, gas emissions, and pollutants that lead to respiratory issues and skin lesions. Unfortunately, neither the government nor the oil companies monitor the human impacts caused by oil pollution. In Nigeria, Shell operates through three separate joint ventures, with the largest being the Shell Petroleum Development Company of Nigeria Ltd (SPDC). As stated in Royal Dutch Shell's "overview of controversial business practices" in 2009, SPDC is also Nigeria's biggest oil and gas joint venture. The primary focus of Shell Nigeria is onshore oil production in the Niger Delta. On average from 2003-2007, there were 250

annual occurrences of oil spills resulting in 13 million liters of oil leaking into the wetlands and rivers of the Niger Delta. In just one year alone (2008), nine million liters of oil were spilled. Information regarding oil spills in 2009 has not been made public yet. The Shell Petroleum Development Company (SPDC) claims that two-thirds of leaks from its installations are caused by third parties; however, a critical report from Amnesty International (AI) in 2009 accused Shell of failing to prevent and mitigate pollution and environmental damage in the Niger Delta despite asserting their social and environmental responsibility.Shell responded to the accusations by explaining that their employees and contractors face various challenges such as crime, violence, kidnapping threats, and community actions. The main causes of oil spills and pollution today are attributed to armed militant groups attacking and sabotaging SPDC's wells and pipelines, as well as criminal gangs stealing crude oil by tapping into the pipelines.

During the Ogoni crisis, Shell faced allegations of colluding with the armed forces even after ceasing production in Ogoniland. However, both Shell and the government dismissed a leaked internal government memo from May 1994 that suggested military operations were necessary for oil production to resume and urged financial contributions from companies like Shell, stating it was a fake document.

The head of the Rivers State Internal Security Task Force openly declared efforts aimed at facilitating Shell's restart of oil production while expressing concerns about risking his life and his soldiers' lives to protect Shell facilities. Community members reported coercion by the Task Force to sign statements requesting Shell's return.

Former members of Shell's "extra police" force in Ogoni alleged deliberate provocation

of conflicts between different groups during MOSOP protests in 1993 and 1994. During this period, Shell admitted to harassing dissidents. Individuals from Ogoni who were detained claimed unlawful detention and physical abuse by Shell constabularies.Shell denies allegations and distances itself from authorities or security personnel advocating for repressive actions against protests. The Chief Executive in Nigeria has expressed concerns about the use of force by both sides involved in the Ogoni issue. Shell is actively working to persuade the government against escalating violence towards people or property. While they acknowledge making direct payments to Nigerian security forces once in 1993, Shell denies any involvement or collaboration with the government. Local groups argue that such payments are common among oil companies operating in Nigeria, but Shell has not publicly protested specific instances of human rights violations committed by security forces at their installations. During shareholders' meetings in 1997, the Dutch and British parent companies of Royal Dutch/Shell group released their first annual report on SPDC's operations focusing on environmental standards and human rights issues. They also published their first group-wide report on health, safety, and environmental concerns. Shell has incorporated its commitment to human rights into its internal management processes and agreed to external confirmation of environmental information while rejecting criticisms against it.
Managers of Shell group companies must provide annual statements confirming compliance with the Statement of General Business Principles. Furthermore, a "management primer" on human rights has been circulated within the group to address allegations and reassure victims. As a prominent player in Nigerian Oil, Shell has utilized its influence to negotiate changes in government policies concerning civil rights, benefiting all parties involved. These commitments

signify a lasting change from within and inspire hope for positive transformations among the Ogoni community and shareholders. To ensure transparency and tackle human rights issues effectively, an independent external organization should monitor both the government's and Shell's performance. Through regular evaluations, this organization would assess the situation and produce optimal outcomes. Protests have arisen due to unfulfilled expectations regarding basic rights by both the government and Shell. By monitoring human rights violations, safety can be ensured for protestors, leading to the satisfaction of these demands. It is essential to address human rights violations in order to safeguard significant revenues generated by Shell while also protecting the government itself. The protests stem from various factors such as limited opportunities, economic corruption, and environmental degradation within communities.The text discusses the negative impact of oil spillage on the environment and the lack of adequate compensation and job opportunities for the Ogoni people due to Shell's activities. It suggests that Shell should provide proper compensation for environmental damage and offer employment specifically in Liquidified Gas works. Additionally, allowing monetary benefits for handling oil spillage clearance by the Ogoni people would improve their perception of Shell and foster a sense of ownership, positively affecting inter-dependency between them, the government, and Shell.

The text concludes by stating that while Shell has implemented internal reforms to meet international standards regarding human rights and the environment, it failed to meet Western standards in its treatment of the Ogoni community. It emphasizes that protecting employees and assets should not justify infringing upon human rights since Shell was responsible for initiating, sustaining, and concluding human rights violations in this case. Despite government involvement in these

abuses with security protection at Shell's request, Shell remained complicit by remaining silent.

To restore its damaged reputation, various options need to be considered by Shell. The responsibilities that should be taken on include promoting economic growth, political and social justice, as well as fully enforcing human rights in Ogoni.The text emphasizes the importance of Shell's presence and contributions to the government, but only if there is a guarantee of appropriate reinvestment. It also states that Shell must adhere to international and national environmental standards, as well as provide compensation for any harm caused by oil exploration and production. The text references various sources that discuss corporate social responsibility (CSR) and Royal Dutch Shell's practices, including an annual report from 2009, a journal article by Bennett (2002), a book by Blowfield (2005), a textbook by Deresky (2006), an A to Z reference guide published by Pearson Prentice Hall, and a book by Visser et al. (2007). Additionally, it mentions an article by Zadek (2004) in the Harvard Business Review that provides an overview of Royal Dutch Shell's controversial business practices in 2010. This overview is sourced from the Stichting Onderzoek Multinationale Ondernemingen Centre for Research on Multinational Corporations (SOMO). Another article on Businessweek's website, published in the Business History Review, discusses Royal Dutch Shell's strategies for dealing with environmental issues. Lastly, Levit J.'s article in the Journal of Asian Economics explores the adoption of CSR codes by multinational companies.In an article published in the Advanced Management Journal, Manakkalathil J. and Rudolf E. (1995) discuss corporate social responsibility in a globalizing market. Similarly, Monshipouri, Welch, and Kennedy (2003) examine the problems and possibilities of multinational corporations' global

responsibility in an article published in the Human Rights Quarterly. Pendleton (2004), on the other hand, delves into the true nature of corporate social responsibility and publishes this article in the Consumer Policy Review. Lastly, Manby (2010) analyzes Shell's actions during the Ogoni Crisis regarding corporate social responsibility.