Corporate Social Responsibility In Oil Sector


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  • With respect to strategic CSR, programmes or policies
    which are related closely to the organization's
    mission or tightly linked to its accomplishment have
    much higher centrality than traditional broad-based
    corporate philanthropy programmes. For example,
    the design, testing and manufacture of air bags for
    automobiles-a socially responsible product-was
    highly central to TRW, as was the correction of safety
    problems with this product. Similarly, political
    activities in support of mandatory automobile safety
    equipment have high centrality for a manufacturer of
    such equipment. But even philanthropy decisions can
    have a high degree of centrality
    Specifity –how much the firm benefits from it
    Proactivity is the planiing and anticipating the technological and social atmosphere isn the company and tekin gmeasure before smth happens
  • Identify the stakeholders which are critically
    important for achieving the firm's mission, goals
    or strategic objectives.
    o Determine the socially valuable CSR policies, programmes
    and projects which address the needs
    and interests of these stakeholders.
    o Assess the opportunities offered by these CSR projects
    to enhance the firm's attainment of strategic
    objectives or to solve significant problems and
    threats facing the firm. (Centrality.)
    o Assess the degree to which these CSR projects
    offer benefits which can be captured and/or internalized
    by the firm as opposed to all firms in the
    industry or society at large. (Specificity.)
    o Anticipate future changes in the firm's environment
    and changes in the needs of its key stakeholders
    which could be addressed through
    proactive CSR policies and activities. (Proactivity.)
    o Determine the baseline of mandated requirements
    in order to identify the opportunities for voluntary
    acti vities. (Vol un tarism.)
  • In this step it is important to find out where the company is today and where they would
    like to be and then form different solutions of how to reach the preferred stage. These solutions
    shall then be compared and the most efficient one should be selected.

    Once having selected the strategy they would like to use the third step of integration becomes
    very important. This step is crucial for the outcome of the implementation of the
    CSR activity. If the activity is well integrated with the day to day business of the company
    and the goal as well as the means of how to reach it is clearly conveyed to everyone involved
    the CSR activity is more likely to be successful in terms of reaching the goal. This
    step is not easy and also very time-consuming in most cases. However if the first and second
    step has been thoroughly conducted this facilitates the third step a lot. If the manger
    for example has a clear picture of what he would like to implement and how to implement
    it, it is easier for him/her to convey the information to the different employees of what
    there task in it will be and what is expected from them. If the employees get a clear understanding
    of what they are meant to do and why they are more likely to do the job correctly
    thus ensuring that everyone is working towards the same goal as well as doing the right
  • Since the ‘business case’
    drives CSR, it is not surprising that many corporate social initiatives do not go
    beyond narrowly philanthropic gestures; for example donating objects such as
    schoolbooks, mosquito nets or lifejackets to local communities, without any
    attempt to consult either the community itself or development specialists. Even
    The false developmental promise of Corporate Social Responsibility
    In Nigeria, the author witnessed many non-functioning white
    elephants, including unfinished buildings designed to be health clinics or schools,
    water projects where the water was unfit for consumption, or projects such as
    health clinics which lacked light, running water, basic equipment or staff.
    such simple gestures sometimes end up as failures. In Equatorial Guinea,
    ExxonMobil donated mosquito nets to the Health Ministry for malaria prevention,
    but officials then reportedly sold them not least through export to

    Many of these problems could be avoided through in-depth consultation
    and the participation of the local people in genuine self-help initiatives using
    local knowledge, skills and tools. But the involvement of local communities is
    inherently constrained by the companies’ lack of developmental expertise and
    the technical/managerial approaches of oil company staff.

    Few people with overseas development expertise move into commercial
    companies, and community development units are often staffed with
    managers, former administrative staff, engineers or former government officials.
    When BP initiated courses to teach its managers about issues such as biodiversity
    and global warming, they typically turned to a business school (the
    Judge Management Institute at Cambridge University) rather than a development
    institution. Furthermore, the staff often spend very little time in the field
    and lack an understanding of specific local problems.
    The internal workings of oil companies also render long-term development
    initiatives more difficult. Asset managers are often rotated among subsidiaries in
    different countries (BP moves them every four years), so they tend to lack a
    long-term commitment to the local communities where the firm operates.
    Even if one asset manager is committed to genuine CSR, his/her successor
    may not be as committed and may simply halt a social initiative begun by the
    predecessor. Thus the championing of development projects with a long-term
    planning horizon may depend on the leadership of individual managers whose
    term of office is inherently limited.

    Since projects are often driven by short-term expediency, ‘decisions are
    taken at too low a level as to which projects to execute’, as one development
    professional put it. So there may be little coordination in determining which
    areas should benefit and how projects can be put together to contribute to a
    greater whole. In one local area visited by the author, an oil company in
    Nigeria built a road which ran parallel to another road built by the Niger Delta
    Development Commission: this is an extreme example of coordination failure,
    but it underlines the importance of planning and coordination for the success
    of development projects.
    Worse still, by not integrating CSR into macro-level developmental plans,
    oil companies run the risk of causing local conflicts and creating negative
    The false developmental promise of Corporate Social Responsibility
    developmental consequences. One example from Nigeria is the concept of a
    ‘host community’, according to which oil companies have a social responsibility
    towards the local community located closest to their oil facilities. Preference
    for one community may breed jealousy from other communities and give
    rise to intercommunal conflicts.
  • Corporate Social Responsibility In Oil Sector

    1. 1. Corporate Social Responsibility in Oil Sector Lale Terzioglu Cornell University
    2. 2. Outline Steps Problems Examples Conclusion Outline 1 State the needs of company 2 Look at the theories 3 Design a CSR process 4 Look at other examples 5 Be cautious for possible problems
    3. 3. Outline Steps Problems Examples Conclusion Strategy • Goals, Missions ,ObjectivesCentrality • Competitive AdvantageSpecifity • PlanProactivity • ProcessVoluntarism • PatternVisibility Burke,Logsdon,1996,How corporate social responsibility pays off
    4. 4. Outline Steps Problems Examples Conclusion Strategy Centrality •Determine the socially valuable CSR policies Specificity •Assess the degree to which these CSR projects offer benefits Proactivity •Anticipate future changes in the firm's environment Voluntarism •Determine the baseline of mandated requirements Visibility •Identify opportunities to create positive visibility VALUE CREATION Measure and compare the value or potential value expected
    5. 5. Outline Steps Problems Examples Conclusion Process • Cost, benefits, feasibilityAnalyze • Understand what company want to achieveStrategy • Making sure the process is clearIntegration • Web page, AdsCommunication • Internal and ExternalFeedback Karlsson,Jonkoping Business School, Implementing CSR
    6. 6. Outline Steps Problems Examples Conclusion Problems Consulting and understanding the community Scope of the projects Dealing with local powers Managing employees strategically Macro-level developmental plans Frynas,2005,false developmental promise of CSR, evidence form multinational oil comoanies
    7. 7. Outline Steps Problems Examples Conclusion Examples Prepare for a liaison committee Agree purpose Determine membership Decide frequency
    8. 8. Outline Steps Problems Examples Conclusion Examples
    9. 9. Outline Steps Problems Examples Conclusion Examples Investment in alternative energy for less consumption Road safety action plans Giving micro credits Working on Algea fuels Workforce opportunity Improving women’s economic opportunities Native Internship program in Australia
    10. 10. Outline Steps Problems Examples Conclusion Conclusion The five step approach Understand the community and its needs Start with a small project Measure the success and effectiveness before moving on
    11. 11. Outline Steps Problems Examples Conclusion Sources SHRM Emerald Socrates CSR Quest (Google) Company Websites LexisNexis Asian Development Bank Corporate Social Responsibility Journal Corporate Responsibility Management Library Catalog
    12. 12. Outline Steps Problems Examples Conclusion Q&A Thank you!