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Corporate Social Responsibility In Oil Sector
- 1. Corporate Social Responsibility in Oil Sector Lale Terzioglu Cornell University
- 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. Outline Steps Problems Examples Conclusion Strategy • Goals, Missions ,Objectives Centrality • Competitive Advantage Specifity • Plan Proactivity • Process Voluntarism • Pattern Visibility Burke,Logsdon,1996,How corporate social responsibility pays off
- 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. Outline Steps Problems Examples Conclusion Process • Cost, benefits, feasibility Analyze • Understand what company want to achieve Strategy • Making sure the process is clear Integration • Web page, Ads Communication • Internal and External Feedback Karlsson,Jonkoping Business School, Implementing CSR
- 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
- 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. 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. 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
Editor's Notes
- 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 49 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. 587 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 Cameroon. 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 593 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.