MULTI NATIONAL COMPANIES AND THEIR SOCIAL RESPONSIBILITIES IN THEIR HOST COMMUNITIES

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF STUDY

Profit maximization was regarded as the primary mission and over-reaching economic motive of any business enterprises little or no attention was paid to the fact that, in pursuit of their profit objective, business enterprises have to be ask to assemble the resource from the local environment and have the stable socio-political and investment climate in which to operate successfully. If business organization relies on society for existence, it is only logical that this environment be acculturated and nurtured to ensure its continuity. It is in this regard that the orientation of the modern business manager has changed to reflect the increasingly important interdependence between organizations and there environments with these, there is an increasing public glamour that business should participate actively in the well being and environment in which they operate and make their profit. However, the aim of establishing any business is to provide competitive goods and services to the consumer and society at large. This does not however, mean that they have concluded their obligation to the people especially to the host community where the business is sited and operated. Although there is no law as what form of services the host community should benefit from the business, it is morally obliged to cater for at least their host. This they do by aiding the development of infrastructures such as access roads where necessary and the provision of good water for domestic use and also the provision of electricity of the local population. Other forms of services that could be rendered for the young members of that community and of course the provision of gainful employment for those who have graduated from college. There are a lot of other services that the host community can benefit from the business such as the provision of safety measures against pollution other air or water. On the other hand, to the business also look forward to the local populace, for continued patronage and also for ensuring the safety of lives and properties of the business and employees of that business who are not from that community. Therefore, the recognition by businessmen of the need to keep the good of society as a whole to mind while conducting business in the bed-rock of social responsibility.

There have been increasing demands on multinational enterprises (MNEs) to provide community development programmes and assistance to their host communities, in particular, in developing countries (Amaewhule, 1997). In other words, meeting locally defined social and economic goals. This is mainly because developmental projects and other social infrastructures are lacking in most of these countries and most of the time they are not provided by the government. For example, oil companies, particularly, those operating in developing countries are now constantly under pressure to be more open and accountable for a wide range of actions, and to report publicly on their performance in the social and environmental arenas. And because of their impact on politics, economics and society in host nations, they must be more attentive than others in demonstrating social responsibility through initiatives to reduce their negative impact (Warhurst and Mitchell, 2000). It has been argued that MNEs need to take account of the ‘‘social, ethical and environmental perceptions’’ of their operations and how these are likely to shape the future attitudes and actions of stakeholders (Zadek, 1998). Following this argument, Frynas (2005) asserts that oil companies attach greater importance to their social and environmental impact and they engage more with local communities than they used to do in the past. Various community and environmental initiatives may be seen as a response to the threat of stakeholder sanctions. Yet the cries of unethical and immoral behaviour from host communities and nations have continued to grow louder in recent times (Eweje, 2001, 2006). The clamour has led many MNEs to engage in purposeful soul searching to find a deeper and more convincing approach to ethical systems (Payne et al., 1997). Furthermore, MNEs alleged double standard, corporate scandals, decline in economic and social development in host communities due to neglect and lack of development initiatives from host governments, has fanned the world-wide debate about the social responsibility of corporations. According to Frooman (1997), stakeholders increasingly are looking to the private sector for help with a myriad of complex and pressing social and economic issues. Similarly, it has been argued that it is good business to actively engage all stakeholders in the development of sustainable strategies that reflect both economic and socially responsible outcomes (Maignan et al., 2005). This discussion[1] is based upon the development issues associated with multinational oil companies’ (MOCs) corporate social responsibility (CSR) initiatives in Nigeria. Its special focus is to investigate the scepticism of host communities in the oil producing Niger Delta of Nigeria. In other words, this paper will examine the rationale behind the criticism of MOCs’ CSR projects, bearing in mind that, if well executed, these projects can improve the socio-economic-environment development of the region.

TOPIC: MULTI NATIONAL COMPANIES AND THEIR SOCIAL RESPONSIBILITIES IN THEIR HOST COMMUNITIES (A CASE STUDY OF SHELL COMPANY PORT-HARCOURT, RIVER STATE)

Format: MS Word

Chapters: 1 - 5, Abstract, References, Questionnaire
Delivery: Email

Number of Pages: 94

Price: 3000 NGN

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