PART ONE – INTEGRATING CASE 1
Royal Dutch Shell in Nigeria: Operating in a Fragile State
Synopsis
This case begins when Benjamin Aaron, a conflict resolution and public policy consultant, is receives a request from one of his important clients, a potential new member to the board of Royal Dutch Shell, to provide advice on how to address the problems that Royal Dutch Shell faced in Nigeria.
The case walks through the corporate stigma faced by Shell, which, despite efforts to the contrary, was identified as the “winner of the villain of the Nigerian environment Public Eye Aware” at the 2005 World Economic Forum. The case goes on to review the turbulent political history in Nigeria, and then describe the steps that Shell has taken to establish socially responsible business practices in Nigeria. The case focuses in on the oil-rich Niger Delta region, and describes how violence and corruption has led to social unrest in the region.
Despite Shell’s significant foreign direct investment in Nigeria, the social benefits to the local people have been largely unrealized. Instead, oil prices are growing higher and local communities are in uproar. Shell’s challenge is to help improve its image and maintain its long-term economic viability in Nigeria.
Teaching Objectives
The case is intended to introduce students to the kind of complex issues that a major multinational corporation (MNC) may encounter when operating and doing business in a developing country that is politically, economically, and socially unstable.
The issues and topics up for discussion include political risk, economic risk, ethical dilemmas, human rights, corporate social responsibility, environmental management, sustainable development, stakeholder management, public policy, legal rights and the rule of law, foreign direct investment, property rights, conflict management and negotiations, to name a few.
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