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

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.        

1.2       STATEMENT OF THE PROBLEM

          The controversy about the public clamor that business should participate actively in the well being and welfare of the community, society environment in which they operate and make their profit are the problems among others this research intend to solve. Has business social responsibility any part to play in the total marketing effort of business organizations or enterprises?

          Does business social responsibility contribute anything to the total revenue of the company? Is the conception that there is no need for business enterprise to be socially responsible to its society “SHELL PORT-HARCOURT” true or false? Of what use is business social responsibility to the general public? The problem for this research is what the responsiveness of companies to social responsibility is.

          The following research hypothesis are formulated for the purpose of carrying out this project of which:

HYPOTHESIS I: Ho: socials responsibility of business does not significantly enhance the success and development of the host community

Hi: social responsibility of business significantly enhances the success and development of the host community.

HYPOTHESIS 2 I: Ho: There is no significant relationship between the success of business and its social responsibility.

H1: There is a significant relationship between the success of business and its social responsibility.

1.3        OBJECTIVES OF THE STUDY

          This research work was conducted with the following main objectives:

a.                 To met up with the requirement in partial fulfillment for the award of B.Sc in the department of Business Administration Caritas University, Enugu.

b.                 To examine and determine the extent of benefits that the company shell company has contributed to the development of Port Harcourt in response towards to the business social responsibility.

c.                  To investigate the causes of business enterprise nonchalant attitudes towards business social responsibility to the development of its host community.  

d.                 To advance solution of the problems of business social responsibility to the development of her host community.

1.4             SIGNIFICANCE OF THE STUDY

          This research is significant in the sense that it provides the basis for further research into the topics by providing related data.

          This study is also of important for the fact that business have been criticized on ethical, moral, economic and political grounds. Businesses have also contributed to the determination of our physical environment the case of SHELL company’s pollutants like poisonous waste materials have been buried in abandoned plant sites; solid wasters have been thrown into lakes and seas or rivers; poisonous gases have been released into the air we breathe etc. Trying to be socially responsible involves extra cost or expenses for industries.

          This study is important because it will be useful to “SHELL COMPANY” and its customers by helping them understand and appreciate more of the effort it has made. If any, it will also be useful to the government and registration because it will help them make more meaningful and useful legislature and help them to set achievable standards concerning social responsibility of businesses.

1.5            RESEARCH QUESITIONS.

This study intends to provide answers to these questions.

1.     Does social responsibility of business organization enhance the development of the community?

2.     In what way has the company carried out their social responsibility in community?

3.     To know the extent of implementation of this policy, the problems, argument and difficulties facing the company in carrying out their social responsibility in their host community.

1.6            SCOPE AND LIMITATIONS OF THE STUDY 

The scope of social responsibilities of business in relation to this project focus on obligation which business have voluntarily imposed on themselves to ensure the survival of the system under which they thrive. In order to give the reader a board base from which to see all of the implications of the social responsibilities of business, it is necessary to examine such responsibilities from the perspective of consumers, employees and general public shell Port Harcourt.

Time and financial constraints are the two limitation of this study. Subsequent difficulty in obtaining data from other companies led to the selection of shell company Port Harcourt as a case study.

This limits the generalized ability of the conclusions of the research to shell Port Harcourt and no other company in the country.

Another problem was the shortage of literature on related topics and non- availability of shell publications in libraries. The absence of accurate and up to date statistical figures because of the recent of events as regards the research topic.

Again, in regarded as confidential, it was very difficult to get the company to release the required information. The problem of gateman and messengers stopping the researcher from entering was another constraint to this study.

Lastly, the case of official’s absence in the company to field work and other assignments constituted other major constraints to the research this work.

1.7     DEFINITION OF TERM

(BSR) Business Social Responsibility 

(NNPC) Nigeria National Petroleum Corporation

(ITT) International Telecommunication Technology

(SPDC) Shell Petroleum Development Company