The Impact of CSR Inefficiency: A Case Study of Shell, Nigeria Report

This report investigates the impact of inefficiency in Corporate Social Responsibility (CSR), focusing on Shell's activities in Nigeria, particularly concerning the Ogoni community in the Niger Delta region. The study examines the background of CSR initiatives, the economic, social, and environmental impacts of oil exploration, and Shell's attempts to mitigate these effects. It analyzes the research objectives, questions, and hypotheses, and reviews relevant literature on CSR, multinational corporations (MNCs), and the challenges in developing countries. The research employs a survey-based primary research method with quantitative data analysis to understand the failures of CSR projects. The report includes chapters on introduction, literature review, research methodology, results, discussions, and conclusions, providing insights into CSR strategies and their effectiveness in the Niger Delta. The study also explores the role of governments and stakeholders in overcoming CSR challenges and identifies gaps in governance within CSR campaigns, offering valuable insights for future CSR activities by oil companies.

Running head: CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
Student’s Name
University Name
Author’s Note
Topic: Investigating the impact of inefficiency in corporate social
responsibility: A case study of Shell, Nigeria

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Abstract
This research study explores the importance of CSR and appropriate execution of CSR activities
in the light of the CSR initiatives undertaken by Shell, Nigeria for the people of the Ogoni
Community in the Niger Delta Region. The upstream oil exploration activities had economically,
socially and environmentally impacted the Ogoni people. Shell, Nigeria had launched various
initiatives in order to safeguard the community from these impacts and revitalise them. However,
sources reveal that the CSR campaigns were not properly executed and this had an adverse
impact on the community also. In the first chapter, the topic of research and the background of
CSR initiatives have been identified in depth. The research objectives, research hypotheses and
the research questions have also been developed in this chapter that will help in understanding
the direction in which the study will flow in the current research.
The main themes based on which the research will be conducted have been set in the literature
review section of this research study. Along with the identification of the importance of CSR
initiatives for MNCs, the literature review also discusses the need for social development in the
Niger delta region and also analyses how the corporate parties can contribute to their
development. In fact, CSR approaches undertaken by MNCs in the developing nations have a
deep delved social significance. In the African or the Asian countries, there is a mandatory
pressure up on the multinational companies to take up CSR as part of the projects they are
accomplishing.
This research study resorts to a survey based primary research method which involves
quantitative data analysis. The actual issues in the CSR project, the reason why it failed and what
was the involvement of the planning procedure in bringing about the detriment of the project can
be understood in the following chapters.

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Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................7
1.1 Introduction............................................................................................................................7
1.3 Research Aim and Objectives................................................................................................9
1.3.1 Aim of the Research........................................................................................................9
1.3.2 Research Objectives........................................................................................................9
1.4 Research Questions................................................................................................................9
1.5 Research Hypotheses.............................................................................................................9
1.6 Significance of the Research Study.....................................................................................10
1.7 Summary of Chapters...........................................................................................................10
1.7.1 Chapter 1: Introduction.................................................................................................10
1.7.2 Chapter 2: Literature Review........................................................................................11
1.7.3 Chapter 3: Research Methodology................................................................................11
1.7.4 Chapter 4: Results.........................................................................................................11
1.7.5 Chapter 5: Discussions..................................................................................................12
1.7.6 Chapter 6: Recommendations and Conclusions............................................................12
CHAPTER 2: LITERARTURE REVIEW....................................................................................13
2.1 CSR and governance in the Multinational Organisations....................................................13
2.2 The role of MNCs in developing countries..........................................................................15
2.3 Stringent operating rules for multinational Organisations...................................................17

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2.3.1 The relationship between CSR and FDI........................................................................18
2.4 CSR related activities in the developing Nations.................................................................23
Role of governments in overcoming CSR challenges............................................................25
Strategic Target of CSR activities..........................................................................................26
2.5 Application of the Stakeholder Theory of CSR activities and stakeholder management and
engagement in Nigeria...............................................................................................................28
2.7 Engagement of stakeholders in Nigeria...............................................................................32
2.8 Problems with Shell, Nigeria...............................................................................................33
2.8 Literature Gap......................................................................................................................35
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................36
3.1 Introduction..........................................................................................................................36
3.2 Research Philosophy............................................................................................................36
3.2.1 Justification for choosing Positivism............................................................................37
3.3 Research Approach..............................................................................................................37
3.3.1 Justification for choosing deductive approach..............................................................38
3.4 Research Design...................................................................................................................38
3.4.1 Justification for choosing Descriptive research design.................................................39
3.5 Research Strategy.................................................................................................................39
3.5.1 Justifications for choosing Survey strategy...................................................................39
3.6 Data Collection Process.......................................................................................................40

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3.6.1 Justifications for choosing Primary data collection process.........................................41
3.7 Data Analysis Process..........................................................................................................41
3.7.1 Justifications for choosing Quantitative data analysis process.....................................42
3.8 Ethical Considerations.........................................................................................................43
3.9 Research Limitations............................................................................................................44
3.10 Summary............................................................................................................................44
CHAPTER 4: RESULTS...............................................................................................................46
Question1: How long have you been working in this organisation?.........................................46
Question 2: What is your Gender?.............................................................................................47
Question 3: Which Age group do you belong?..........................................................................48
Question 4: How far do you agree thatCSR initiatives can influence the organisational
success?......................................................................................................................................49
Question 5: How far do you agree the Human Resource department should entirely take the
responsibility of initiating CSR activities?................................................................................51
Question 6: Please rank the following drivers of CSR as you feel appropriate for your
company.....................................................................................................................................52
Question 7: What strategy is followed by your organisation for implementation of CSR?......54
Question 8: Is there a process of evaluation of the impacts created by the CSR initiatives taken
up by the organisation?..............................................................................................................55
Question 9: How far do you feel that CSR initiative in the Niger Delta region have been
effective?....................................................................................................................................55

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Question 10: How far do you believe that the following options are the challenges before
CSR?..........................................................................................................................................56
Interpretation of the Research Data...........................................................................................57
Question 1...............................................................................................................................57
Question 2...............................................................................................................................57
Question 3...............................................................................................................................58
Question 4...............................................................................................................................58
Question 5...............................................................................................................................58
Question 6...............................................................................................................................59
Question 7...............................................................................................................................60
Question 8...............................................................................................................................61
Question 9...............................................................................................................................61
Question 10.............................................................................................................................62
CHAPTER 5: DISCUSSIONS......................................................................................................63
Nature of employees..................................................................................................................63
CSR role in driving organisational success................................................................................63
Role of human resource in launching CSR activities................................................................65
Major drivers of CSR.................................................................................................................65
CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS.................................................68
Reference List................................................................................................................................71

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CHAPTER 1: INTRODUCTION
1.1 Introduction
CSR can be defined as a self regulatory mechanism by means of which a company actively
monitors global trends, legal standards and environmental standards for compliance. The core
mission of the company is supported by CSR activities, which also helps in extending their
responsibility as well as commitments towards the secondary stakeholders as well as other
societal members.
Every business is primarily faceted to fulfilment of the needs of the stakeholders.
However, most transnational companies are taking responsibility towards fulfilment of the needs
of their secondary stakeholders by addressing the global issues, aimed at making the world a
better place. As identified by Uduji, Okolo-Obasi and Asongu (2018), Global organisations are
nowadays being called up on by their stakeholders as well as customers to address the most
demanding issues of the nations where they are operating, which include concerns regarding
monetary advancement as well as environment. While popular sentiments vary on how the
responsibilities are allotted over general population, the corporate stakeholders of the companies
are demanding that organisations should try to be more compassionate in tending to such issues
(Zalik 2015). The companies are working progressively with their partners for comprehending
their concerns on various social, ecological, financial as well as corporate administration issues
that are occasionally alluded to as corporate social obligations.
Corporate Social Responsibility is in fact a wide term that is implemented for
highlighting the efforts of the company in order to improve the society in some way. CSR efforts
can span from activities like donating money to the non-profit organisations to the

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implementation of environment friendly policy implementations in the organisation. CSR
activities are very important for the companies, employees as well as non-profits also. CSR is not
a mandatory policy for the organisations based in the United States. Rather, it is mandatory for
the companies who are operating in the African or Asian countries to carry out CSR activities.
However, as per Hennchen(2015), CSR are actually the additional initiatives that are being
undertaken voluntarily by the organisations for the local as well as global communities.
1.2 Background of the Research Study
CSR activities are taken up by the organisations voluntarily. However, there are several
ways in which the organisations can benefit from their CSR campaigns. Companies that make
contributions to various social causes are perceived to be more philanthropic compared to those
organisations where the CSR endeavours are non-existent. The public image of the organisations
rests at the mercy of the CSR activities undertaken by them. However, even if the companies
take up CSR activities seriously, they would not be able to get much out of these activities, if
nobody gets to know about their role. That is why CSR activities are always aligned with
extensive media coverage with local media outlets taking up voluntary initiatives to cover the
story of the CSR based activities of the organisation. However, in this context, it deserves
mention that if the corporation indulges itself in to any such activity that creates any adverse
impact up on the local society, the media will extensively cover that also. Media visibility, as
Adewole(2018), states, is such an important fact that can shed positive light up on the
organisation.
There are some selective disadvantages of taking up CSR activities also. Often the
companies out of the fear of incurring too much costs, leave the activities in the mid-way. The
companies at times prioritise their profit making endeavours more than the social endeavours.

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The business objectives of the company can also get hampered if the company is too much
engaged in the CSR activities. The budgetary limitations of the organisation are also one
important factor that hinders them from taking up CSR activities.
1.3 Research Aim and Objectives
1.3.1 Aim of the Research
The aim of this research is to investigate the impact of inefficiency in Corporate Social
Research, based on the case study of Shell, Nigeria.
1.3.2 Research Objectives
 To investigate the strategic concept of Corporate Social Responsibility
 To examine Shell Nigeria’s construction to CSR in the Niger Delta in Nigeria.
 To determine how Shell Nigeria can redirect her CSR initiatives within the Niger delta
region in Nigeria.
1.4 Research Questions
Question 1: Has corporate social responsibility contributed to growth and development of Niger
delta region of Nigeria?
Question 2: Is Corporate Social Responsibility a meaningful strategy for the growth and
development in an emerging economy?
Question 3:Is CSR policies and initiatives worth in Nigeria?
1.5 Research Hypotheses
HO: External organisational factors have no impact on CSR

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H1: External organisational factors have impact up on CSR
1.6 Significance of the Research Study
After setting up the oil rigs in the Niger Delta region, the normal lifestyle of the Ogoni
population who have their natural habitat in that region was hampered to a great extent. Firstly,
the ecosystem of the region was imbalanced to a great extent. On top of that the land and the
marine atmosphere were also hampered. In order to mitigate the impact up on the locality or the
ecosystem, the company promised to invest about $8 billion for relocating and revamping the
local habitat and $ 1 billion every year in the following period in order to clean up the Niger
Delta region. However, the project was stopped in the middle and only a small proportion of the
oil pollution was removed from the locality.
The significance of the research study lies in the fact that the final outcomes of this study will be
most appropriate for the conduction of the future studies in this concerned area of research. This
is very essential since more research in the domain of CSR activities undertaken by the oil
yielding companies in the Niger Delta region. As an outcome of the currently undertaken
research study, the governance gaps in the CSR campaigns will also be identified. This
knowledge can be used by the companies in the future also for undertaking of CSR activities.
1.7 Summary of Chapters
1.7.1 Chapter 1: Introduction
In the first chapter, the topic of research have been identified in depth. The background of
the study have been developed here which helps in understanding the importance of the CSR