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A Case of Stakeholder Management by Oil and Gas MNCs in Nigeria - Izidor, N (2013)
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A Case of Stakeholder Management by Oil and Gas MNCs in Nigeria - Izidor, N (2013)

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  • 1. A Case of Stakeholder Management by Oil & Gas MNCs in Nigeria: An Illustration Nnadozie Izidor (PhD Research Student, UCLan, UK) Communication, Marketing & PR Division. A Lecture Presented at Harris Building, University of Central Lancashire (UCLan), Preston, UK. March 14, 2013
  • 2. Discussion Outline • Who are Stakeholders? • What are their Stakes? • What are the Stakeholder Challenges facing MNCs in Nigeria? • What are the current strategies for community engagement in Nigeria? • A recommended approach for MNCs?
  • 3. Who are Stakeholders? What is a Stake? • A Stake is an expressed interest or a share in an undertaking. • It is an expression of right of ownership of something, (such as legal or moral rights). Who is a Stakeholder? • A Stakeholder is someone (or a group) that holds a Stake in an undertaking. From the Scholars Point of View • Freeman (1984) - A stakeholder is any group, organisation or individual who ‘can’ affect or is affected by the achievement of the organisation’s objectives. • Donaldson and Preston (1995) – Based on its legitimate interest in the organisation, a Stakeholder is any group or individual whose interest has at least some fundamental values. • Carroll and Nasi (1997) - A Stakeholder is any group or individual that has a valid and active stake in the organisation’s activities.
  • 4. Who are Stakeholders? (Contn..) Stakeholders of the Business Broad Grouping • Internal • External • Mediante* Identification and Prioritisation These are based on whether Stakeholders are either: • Primary or Secondary • Active or Passive • Economic or Social • Core, Strategic or Environmental, etc *Mediante Stakeholders are both inside and outside the organisation at the same time; they possess some confidential information about the organisation which are always protected in a contract, and provide services that support the organisation to achieve its objectives. It is both a French and Italian word, meaning ‘come between’ and originates from the Latin word ‘Mediare’ meaning ‘Be in the middle of’. *Online Communities are emerging stakeholder groups from the social media networking sites. They can add value to an organisation, and they also have the power to pull down an organisation in a matter of hours.
  • 5. Who are Stakeholders? (Contn..) Stakeholder Structure in the Nigerian Oil & Gas Industry
  • 6. Who are Stakeholders? (Contn..) Prioritising for Stakeholder Management (Power -Interest Matrix [Gardner et al, 1986]) Oil MNCs in Nigeria and Stakeholder Mapping (Power vs Interest) A – High Power, Low Interest (Keep Satisfied) Could be encouraged into a Coalition (Allies) B – High Power, High Interest (Manage Closely) Deserve sustained management attention C – Low Power, Low Interest (Monitor Less) Though passive, but still a potential stakeholder D – Low Power, High Interest (Keep Informed) Can influence future activities and happenings
  • 7. What are Stakeholders’ Stake? • A Stakes is an interest or demand that Stakeholders express to the organisation, which could be moral or legal, or a combination of both. • Stakeholders and Organisation express certain interests to one another at every point in time. • Those interests are expectations both have for each other in fulfilling their contractual and moral obligations. In Nigeria, the main Expectations of Host Community People are: • Employment Opportunities • Provision of Social Amenities • Environmental Concerns • Patronage of Local Businesses and Expertise, etc For the Oil MNCs, their main Expectations have been: • A Favourable Lower Levying System (e.g. taxes, royalties) • A Safe and friendly environment to operate and meet business objectives • Community to respect company’s legal rights to operate • A favourable industry regulatory practices, etc
  • 8. What are the Stakeholder Challenges Facing MNCs in Nigeria? • Level of Development • The current legislation and the role of Government • Not understanding the institutional pattern of local communities • Lack of proper engagement
  • 9. What are the current MNCs’ Strategies for Community Engagement in Nigeria? The Royal Dutch Shell Approach
  • 10. A Recommended Stakeholder Management Process (SMP) • Identify all stakeholders (Mapping) • Assess all stakeholders needs (Stake) • Analyse stakeholders Influence (Power) and Interests • Manage stakeholders demands (Expectations) • Decide the best strategic action (Engagement) • Continue to Review, Improve and Repeat the process To achieve effectiveness, SM has to be a continuous review process