MBA: Governance and Sustainability

Reading:

CSR AND SOCIAL CHANGE

Source: Putting the S Back in Corporate Social Responsibility: A Multilevel Theory of Social Change in Organisations |

Cynthia Williams - Academia.edu. Accessed on 9 March 2021. Edited for examination purposes by the Examiner.

In 1996, it was alleged that Royal Dutch Shell supported the Nigerian military to execute the writer,

Ken Saro-Wiwa and several other Ogoni community members for their political organising against

Shell. The public outcry related to this event, and the contemporary environmental controversy over

Shell's decision to discard the Brent Spar oil drilling platform in the North Sea, caused Shell to

change its social outlook and relationships with host countries and consumers. In response, Shell reevaluated its operating principles to establish more explicit human rights guidelines and issued its

first social report. Although this example represents reactive social change, there are many

examples of proactive social change.

Many corporations are engaging in "triple bottom line" thinking, which suggests an organisation's

success hinges on economic profitability, environmental sustainability, and social performance (Hart

& Milstein, 2003). Over half of the Fortune Global 500 MNCs produce a separate CSR report

annually (Williams, 2004), and most have senior executives with responsibility for CSR efforts

(Economist, 2005).

One premise in our analysis is that, in either case (reactive or proactive CSR initiatives),

corporations are being pressured by internal and external actors to engage in CSR actions to meet

rapidly changing expectations about business and its social responsibilities (Clark & Hebb, 2004;

Cuesta Gonzalez & Valor Martinez, 2004; Economist, 2005). Another premise is that organisational

practices such as CSR are exposed to decoupling effects, so that some companies introduce CSR

practices at a superficial level for window-dressing purposes. In contrast, other companies embed

CSR into their core company strategy (Weaver, Trevin & Cochran, 1999). We further assume that

companies' responses to changing social expectationsparticularly their serious implementation of

CSR initiatives into their strategic goalshave the potential to change their corporate culture and

impart real social change. As one example among many CSR initiatives leading to positive social

change, we point to the Chiquita company, which has implemented living wage standards for all its

farmworkers in every country in which it operates (Taylor & Scharlin, 2004). We assume that such

efforts are being replicated by numerous other global companies in every sector (Global Compact,

2005)

QUESTION 1.2. (20 MARKS)

In the case of Shell and the Nigerian military, the failure to adhere to practices of good governance resulted in, among other things, the demise of an important stakeholder. Identify and discuss sound governance principles and elaborate on those principles that the Shell organisation ignored that eventually led to a fresh social outlook by the organisation, all be it somewhat reactively

(PLEASE PROVIDE REFERENCES)