Impact of Fracking on Stakeholders in the Business Environment Report

This report delves into the business environment, specifically examining the practice of fracking and its implications for various stakeholders. It identifies key stakeholder groups such as financiers, customers, employees, investors, suppliers, competitors, the government, and the local community, analyzing their respective interests and how they are affected by fracking operations. The report also applies Carroll's model of corporate social responsibility (CSR) to assess how businesses can balance economic, legal, ethical, and philanthropic responsibilities in the context of fracking. It highlights potential conflicts arising from differing stakeholder interests and emphasizes the importance of adhering to CSR principles for sustainable business practices. The analysis underscores the need for companies to consider the broader impact of their actions on all stakeholders to achieve long-term success and maintain a positive reputation, especially in the context of environmentally sensitive practices like fracking. The report provides a comprehensive overview of the business environment, stakeholder dynamics, and the role of CSR in the context of fracking.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
Term of fracking and interests of stakeholders groups ..............................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment has combination of internal and external factors which can affect
the performance of the organisation. It is necessary to control these factors so that company can
protect its business. This reports covers the following topics such as fracking, various stake
holders of the company and situation of conflicts among the company and stakeholders.
MAIN BODY
Term of fracking and interests of stakeholders groups
Fracking is a method which is used by the organisation to extract natural gas and oil from
shale rock layers within the earth. It is also known as hydraulic fracturing and it includes
injecting chemicals, water and sand directly into the ground. Stakeholders can be individual,
party or group of persons who has interest in the company. There are various types of
stakeholders which are as follows:
Financiers:
These are those persons or financial institutions who provides venture capital and other
investment to company. They have interest in the organisation because from their fund
corporation can perform its business activities. If Tesla suffers from losses than it cannot pay
interest to them so their interest will got affect because they does not generates rate returns from
its invested amount. If company produce good quality of oil and gas than its sales will increase
and it can able to return the amount to financiers it is possible through from the fracking
development. (Bremser & Chung, (2005).
Customers:
These are those people who buy the goods and services of the company. For an energy
company Tesla its consumers can be big corporates who deals in oil and gas business. Interest of
stakeholders can be affected when prices of products has increase and they have to pay more
amount to the organisation. If company produce good quality of oil and gas than its customers
will increase and it is possible through fracking developmet.
Employees:
These are those persons who earn their income from the organisation and depend on it for
their livelihood. It Tesla reduced the salary of workers than their interest has affected and they

can not earn money. Workers extract the gas and oil from land, if they extract more than
situation of fracking development can create and its production can maximize.
Investors:
These are those persons who invest its capital in the organisation for the return. If Tesla
does not give the sufficient rate of return than their interest will influence and and in future they
does not make investment in the company. If investors provide more money than company will
expand its business of oil and gas and it helps in fracking development.
Suppliers:
These are those persons who provides the raw materials to the organisation for the
production and manufacturing process. For Tesla it suppliers can be those who supply chemises
and machinery to it for the process of oil and petroleum products. If Tesla does not purchase
products and manufactures itself than stakeholders can be influence by the decision of company.
If organisation have latest machinery than it can extract more oil and gas from land and it can
arise the situation of fracking development.
Competitors:
These are those persons who have same business as Tesla. If company provides the
quality products at reasonable price than interest of competitors will affect because they cannot
able to do the similar as this organisation. If there is healthy competition than company will
produce better quality of oil and it can maximize the sales of it. So it help in fracking
development.
Government:
If Tesla does not pay taxes to the government than its interest will get affect because
taxes are the main source of revenue for it. Without sufficient amount of fund it cannot do
development of country. Government can provide subsidy for the business of oil and gas
business so it can buy land at cheaper rate and it helps the company to expand its business. It can
create the situation of fracking development. (Hilton, & Platt, (2013).
Local community:
These are those persons who lives in the common location where the business of
company is establish. If Tesla pollute the water and air of that particular area through abstracting
process of natural gas and oil than interest of stakeholders will influence. People of that
community does not get the fresh air and water and their health condition will affected from it.

For the fracking development it is necessary for Tesla that is extract natural gas and oil
effectively so that interest of stakeholders does not affect from it. It can able to do its business
smoothly and accomplish the growth from business.
(Source: Types of stakeholders. 2018)
According to Freeman stakeholder is any group or individual who can affect or
influenced by the achievement of the company's objectives (Montazemi, A. R. (1988).
Carroll's Model:
This model is related to the corporate social responsibility that analyse how and why a
company can fulfil its social responsibility. Organisation can do fracking by following the rules

and regulations related to the CSR activities. Carroll's Pyramid is talks about four types of
responsibilities which are as follows:
Economic:
An Organisation wants to earn more profits as it can generates and it has responsibility to
do something for the benefit for the society. For the fracking development it is necessary to
produce more oil and gas so that it export it to the other countries as result it can generates more
revenue. It helps in fracking development.
Legal :
It is the responsibility of an organisation to follow the rules and regulations related to law
for example, employment, health & safety. Tesla should follow the rules related to fracking and
does not extract more oil and gas beyond the limit. So society will accept it because it following
the rules and it helps in fracking development because goodwill of company will maximize.
Ethical:
It is responsibility of an organisation to act ethically and morally and treat their
employees equally. Tesla should follow its ethics and does not extract more oil and gas beyond
its limit which is set by government. It it follow the ethical practices than image of company will
improve and its helps in fracking development.
Philanthropic:
It is the responsibility of company to perform CSR activities effectively and do welfare of
person. It can give donations to the society and it will help for the growth and development. But
organisation does not want to contribute fund because they think it is earn by them and it put lots
of efforts to earn money. So in that situation where conflicts can arise in the views of
stakeholders and company. In that case fracking development does not possible for the
organisation.
A company can perform better and make its good reputation when it think for the benefit
of stakeholders. In fracking process all CSR rules and regulations should by the organisation.
(Zahra, (1993).
CONCLUSION
As from the above report, it has been concluded that business environment can influence
the business of an organisation. A company can achieve its goals and objectives when its protect
the interest of various stakeholder and perform the CSR activities for the benefit of society and

its people. Fracking process should be done as per the rules of social responsibility which is
essential to be follow by company.

REFERENCES
Books and Journals
Bremser, W. G., & Chung, Q. B. (2005). A framework for performance measurement in the e-
business environment. Electronic Commerce Research and Applications. 4(4). 395-412.
Hilton, R. W., & Platt, D. E. (2013). Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Montazemi, A. R. (1988). Factors affecting information satisfaction in the context of the small
business environment. MIS quarterly, 239-256.
Zahra, S. A. (1993). Environment, corporate entrepreneurship, and financial performance: A
taxonomic approach. Journal of business venturing. 8(4). 319-340.
Online
Types of stakeholders. 2018. [Online]. Available Through:
<https://slideplayer.com/slide/5776092/>