THE ROLE COMMUNITY RELATIONS HAS PLAYED ON THE CORPORATE IMAGE OF SHELL PETROLEUM PLC PORTHARCOURT

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Companies has recently gave priority to their interactions with the people constituting the environment they operates in and draws resources from, to foster mutual understanding, trust, and support between the company and the host communities (Meyers, 2005). This study is examining the role that these activities involved in community relations on the corporate image of Shell petroleum Plc, Port Harcourt. Corporate image" was once an advertising jargon but is today a common phrase referring to a company's reputation. The "image" is what the public is supposed to see when the corporation is mentioned. The ordinary man and woman on the street usually have a wry view of community relations, advertising, hype, hoopla, and therefore also of corporate image—and this often for good reasons (Brady, 2005). But a good corporate image is a genuine asset; it translates into dollars at the counter and higher stock valuation.

The concept is usually associated with large corporations, but small businesses also have a corporate image even if neither their owners nor customers think of it that way. In the absence of active efforts, corporate image "simply happens": it is how a company is perceived (Johnson, 2002). Management, however, may actively attempt to shape the image by communications, brand selection and promotion, use of symbols, and by publicizing its actions. Corporations trying to shape their image are analogous to individuals who will dress appropriately, cultivate courteous manners, and choose their words carefully in order to come across competent, likeable, and reliable. In the personal as in the corporate case, the image should match reality (Hayward, 2005). When it does not, the consequence will be the opposite of the one intended. Community relations is no longer an afterthought or corporate window-dressing, community relations, as more chief executives are acknowledging, is now a serious, strategic aspect of business for Nigerian companies, a fundamental ingredient for the health of the enterprise. Competitive business and social pressures are forcing a redefinition of the relationship between company and community. When a company makes a commitment to the community part of its core business strategy, it not only helps attract and retain top employees, but it also positions itself positively among customers and, increasingly, improves its position in the market. Positive, proactive connections to the community can translate into a boost to the bottom line. Leading-edge companies are now seeing that to succeed in a global economy, the corporation has to be more than a preferred shareholder. The broad array of new stakeholders that the enterprise must embrace require a new perspective on corporate governance and behavior (Brady, 2005). Consequently, in addition to becoming the investment of choice, a company must become the supplier of choice, the employer of choice. Several community relations strategies by oil companies have failed to reduce the incidence of violent conflict between the host communities and oil companies in the Niger Delta, Nigeria. Shell is Nigeria’s oldest energy company, and has a long term and continuing commitment to the country, its people and the economy. The largest contribution by Shell companies in Nigeria is through the taxes and royalties they pay as well as its commitment to support and finance community development initiatives in the host communities.

1.2   STATEMENT OF THE PROBLEM

Given the pressures that accompany the growing parity in the price of goods and services, companies will achieve an increasing competitive advantage through community relations and social responsibility as an approach of building corporate image. This makes strategic social investment all the more important for global corporations as they seek to establish a consistent image and market presence across the world. However, the researcher is examining the role community relations have played on the corporate image of Shell petroleum Plc, Port Harcourt.

1.3   OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1.  To examine the role of community relations on corporate image building at Shell Petroleum Plc Port Harcourt.

2.  To determine the process of effective community relations.

3.  To identify the factors that determine the corporate image of an organization.

1.4   RESEARCH QUESTIONS

1.  What is the role of community relations on corporate image building at Shell Petroleum Plc Port Harcourt?

2.  What is the process of effective community relations?

3.  What are the factors that determine the corporate image of an organization?

1.6   SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1.  The outcome of this study will be a useful guide for the management of Shell Petroleum Plc Port Harcourt in reorganizing and restructuring their community relations programmes to meet the need of the host communities to enhance cooperation and mutual understanding.

2.  This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.

1.7   SCOPE/LIMITATIONS OF THE STUDY

This study on the role of community relations on corporate image building at Shell Petroleum Plc Port Harcourt will cover all the community relations strategies that has been used by shell to facilitate cooperation and mutual understanding between the company and the host communities.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

 Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

REFERENCES

Meyers B.Y. (2005): Analysis: Corporate Case Study—Schering-Plough Looks to Remedy An Ailing Image." PR Week. 12 December 2005.

Brady, Diane, Michael Arndt and Amy Barrett. "When Your Name is Mud, Advertise; Companies in Crisis Used to Lie Low. The New Response to Bad Press is Positive Spin." Business Week. 4 July 2005.

Johnson L.O. (2002)"Explaining the Enron bankruptcy." CNN.com/U.S. Available from http://archives.cnn.com/2002/US/01/12/enron.qanda.focus/. 13 January 2002.

Hayward, Roger. "Insight: Corporate Reputation" Accountancy Age. 30 June 2005.