Royal Dutch Shell Corporate Social Responsibility (CSR)

king care Dutch call on the carpet Corporate Social Responsibility (CSR)The Corporate plays a vital function in sparing development of the country and these corporate involves in respective(a) activities for their sustainability in the line environment. In this globalization era traffic constitutions finds the greatest quarrel in managing the stakeholders demands, which results in complex in the competitive market. So, here the corporate takes up genial responsibility as a commitment and engage themselves in the night club development. Corporate Social Responsibility (CSR) is a commitment by the line of merchandise organizations in improving the society with their business activities and its contribution in participation development. CSR is an effective tool which needs to be implemented in the organizations for their sustainable egression and development of societal objectives.This report addresses the affectionately responsible business of two multinational organiza tions extravagantly income and emerging economies group. Here, Royal Dutch casing is chosen in high-income and Tata sword in emerging economies group of multinational organizations. Royal Dutch Petroleum Company in Dutch, which involves in production of oil and remonstrate Transport and Trading Company in British, which involves in conveyanceation of oil, merge their operations in 1907 and later it is named as Royal Dutch Shell. Shell is a multinational petroleum club and its headquarters locates in The Hague, Netherlands. Their business involves in production and marketing of petroleum and natural gas. They operate in more than one hundred countries with 45,000 service stations worldwide. They produce 2% of worlds oil and 3% of worlds gas. Shell is worlds largest corporation and its ranks one by Fortune 500 in 2009 (Shell, 2009). TATA conference, the largest multinational group set uped in 1868 and based in Mumbai, India. Initially the trading lodge was established by Ja msetji Nusserwanji Tata involving in Opium business. posterior, the group expanded by JRD Tata by establishment of Tata mark, Tata chemicals, Tata Motors, Tata Industries etc. tally to 2009 annual survey by Reputation Institute, Tata Group is ranked has 11th most reputable group in the global (Tata, 2009). Tata Steel pervious known as Tata Iron and Steel Company hold in (TISCO) founded in 1907. Tata blade one among top ten make producers in the world. With their recent acquisition of Corus, Millennium steel and NatSteel, Tata steel has established its business entanglement across the global like South East Asia, Europe and Pacific-Rim. Tata Steel has net sales revenue of USD 33 billion with employee strength of 82700 by course 2008 (Tata Steel, 2009). This report firstly briefs on companies commitments on society from stakeholders viewpoint with a stakeholder saliency model to identify them. Secondly on companys orgasm and initiatives towards social responsibilities and fina lly those approaches and initiatives by companies ar analyse and comp ard on different viewpoints.Stakeholder IdentificationStakeholders are a person, group, or organization who is directly or substantiatively involves in an organizations actions, policies, and behavior. Shareholders, customers, creditors, organization, suppliers, employees, directors, owners, and society are the key stakeholders in a business organization. All stakeholders are not equally same each stakeholder is entitled to different concerns. In order to analyze an organizations social engagement from stakeholders perspective, it is necessary to identity the applicable stakeholder group. Several approaches and attempts are do to identify different stakeholders relevant for a company. Later Mitchell, Agle, and Wood made up with definition in identifying the stakeholder group by developing Stakeholder Salience feigning, which propose the vital of stakeholder group based on its salience. They argued that the s takeholder who has high degree of salience will play the vital role in controlling the corporate behavior. They argued stakeholder salience model identifies the stakeholder group by three attributes, namely Power, Legitimacy and Urgency (1997). This concept of three attributes is used to categories seven stakeholders and one non-stakeholder.1. Dormant 2. Discretionary 3. Demanding 4. Dominant 5. Dangerous 6. Dependent 7. Definitive 8. Non-StakeholderWith this Stakeholder Salience Model the different types of stakeholders are identified and measure their corporate social responsibility activities of two multinational organizations (Royal Dutch Shell and Tata Group). Here, we briefly consider what organizations activities in social responsibility and the changes made to accommodate these CSR initiatives. The following fig1.2 describes on different stakeholder of scurf according to stakeholder salience model.Shell associate with general business principle, as business principle shell contributes to sustainable development. Their business principle is to protect the shareholders investment and give them the long-term returns compared with others leading firms in the industry. So, shareholders are identified as explicit stakeholder of shell. Here, dormant stakeholders are the host government, as shell establishment in a country with support of government. For example Shell in Nigeria worked closely with government to help realize the Nigerias energy potential and support for society development. With help of Nigerian government shell expanded their business and energy sector in Nigeria. Non-Government organizations are found to be dangerous stakeholder, who has the power and urgency. Shell had a negative impact in 1995 after its announced to sink the Brent fit out in the Atlantic Ocean, NGOs like Greenpeace and media started campaign against shell with support of local anaesthetic participation and government for environmental disputes. These initiatives by Greenpeace made many people in Europe countries to boycott shell products and they were successful in influence. Employees are identified as discretionary stakeholder of the organization by encourages them in social performance. Institutions are drug-addicted stakeholder, shell as a leading corporation in the global involves in decision making policies of institution which impacts on society. Local communities are found to be demanding stakeholder, where they need urgency in the environmental issues. For example shell operates in Schoonebeek has stopped their operation in 1996, where it not made any economic sense in extraction of oil, the plant was closed clavering with local friendship and framework with new project in 2003 after the approval of local communities.Tata Steels Stakeholder salience ModelThe higher up Fig1.3 shows the stakeholder salience model of Tata steel, which is used to identify the different stakeholders of Tata Steel. Shareholders are the distinctive sta keholders who actively take part in all primal meeting on social investments and business ethics. They present the power in decision making on corporate governance which will benefit both the company and society. Employees are identified as discretionary stakeholders where the employee are encourage to take part in community initiatives through employee involvement planning and volunteering curriculum like disaster relief. Government is found has dominant stakeholder, who has power and legitimate. Tata steel had roasted hands with government by taking part in collaborative initiatives on public policy development. They work together on environmental impacts. Local community are identified has demanding stakeholders, where Tata steel had taken number measures on social responsibility. They are mainly focused on sustainable expectlihood, health, education, empowering youth and environment. Even feedback on business performance and impacts are taken from local communities. So, the company commode come with new initiatives and development for community.Stakeholder differences between Shell and Tata SteelAccording to Stakeholder Salience Model, the stakeholder groups are classified into three categories namely Latent Stakeholders or Low salient classes (dormant, discretionary demanding), Expectant Stakeholder or Moderately salient classes (dominant, dangerous, dependant) and Highly Salient Stakeholder (definitive) (Friedman, 2006, p94).It is observed from stakeholder salience model of Shell and Tata steel, Shell is squeeze by expectant stakeholders like Greenpeace in social responsibility. Most of the social responsibilities of Shell are found in places where they bad experience and negative impacts by the society. This show their business motto and against their business principle. Whereas Tata steel are more focused on social responsible of local communities. The company helps the community in their day to day activities and joined collaboration with gove rnment in new initiatives and society development. Here, the latent stakeholder (Financial Community) reviews their business performance and ethical behavior on society. Tata steel is more focused on Latent stakeholder compared with other stakeholders.Shell Societal Approach and InitiativesShells mission is to achieve its social responsibility to stakeholders and grant them with high role product and service. Shell stands with General Business ruler, which contributes to their sustainable development. The company finds the major responsibilities has to protect the shareholders investment, provide a quality product and safety environment to customer, provide a safe and good working condition to their employee, valuable relationship with suppliers and partners, and finally secure environment to the society (Shell, 2009). The following are the systematic approach of Shell in social responsibilityImpact assessmentsSocial performance plans and reviewsSocial performance professionalsLo cal employmentSocial investmentImpact estimationImpact assessments are done at initial stage of new project the assessment done on environment, social and health impact and consult with local communities. Where the environmental and social impacts are identified and measures are taken according to reduce the negative impact to the local community.Social Performance Plans and canvassThe chemical facilities and refineries of shell have major impacts on community, so they have social performance plans and review. These plans have information on impact assessment, surveys of local community and communication of local stakeholders. On working with local stakeholder, the plan will be executed to reduce the disputes on society and improve the benefits. These plans are reviewed both four years by shell and information is shared on key social impacts across their operations.Social Performance ProfessionalsSocial performance attention unit is support the people in risk, where shell had th e concept of buying and hiring locally. The company used local supplier and contractors, and hired local employee to create benefits and trust. This made more employment in the local communities and provides more opportunities to local people and businesses. Even government gets benefited by these responsibilities.Social InvestmentSociety and local communities are benefited by Shells social investment programmes. They support the community by number of social responsible initiatives like education, health, community development, environmental issues and cornerstone development. They also join with NGO like Living Earth Foundation for community development.Shells CSR initiatives are achieved through Social Investment Programmes across the global. They have Shell Livewire, which helps and encourage the new-fashioned crowd to start their own business. This programme is conducted in 24 countries across the global and in this programme the young entrepreneurs are awarded for the best b usiness approach. Shell centenary scholarship programmes helps the students in providing scholarship to postgraduate studies and those students are send to UK for their studies. Along with government and NGOs, shell helps society in road safety measures by their worldwide Road guard Partnership programme. Shell has human immunodeficiency virus/AIDS programme to prevent their employee and their dependents from the diseases. They participate with other organization and government to fight against HIV/AIDS. Shell Foundation is a self-governing charitable trust started in 2000 with contribution of $250 million from the company. Shell Foundation is mainly focused on community welfare and environment impacts. To save the livelihood of the local community in oil and gas field, shell had Resettlement Action Plan in china. Shell Petroleum Development Company in Nigeria has spent $4.5 million for community development (Shell, 2009).Tata Steel Societal Approach and InitiativesTata Steel appr oach towards sustainability is considering the triple shtup line economic, environmental and social performance in business activities. They believe the sustainable development is depends on improving the quality of life of its employees and communities it serves (Tata Steel, 2009). The following are social responsible activities of Tata SteelStimulating of Economic growthEnvironment healthcare InitiativesEducation CultureEmpowering of womenStimulating of Economic GrowthSociety had indirect economic impact on community infrastructure development. The company announced Rs.1 billion for implement social responsibility programmes in tribal communities of Jharkhand, Chhattisgarh and Orissa. The involves in infrastructure development projects like municipal service to one million people in Jamshedpur Township by providing basic necessity like electricity, piddle, road and transport facilities. They engage in infrastructure development in building schools and colleges, sports faciliti es like world(prenominal) stadium. By these initiatives by company will increase the economic growth of the society.EnvironmentTata Steel targeting towards reduction of Co2 emission and provide safety environment to the society. The company committed with healthy and safety working environment by implement Environment attention System. Tata Steel Rural Development Society encourages the local community in planting saplings and safeguards the forest. Nearly 250 hectares of wasteland had been reclaimed by planting saplings in 2008. Several measures are taken to control the water pollution and provide safe drinking water after proper treatment. good turn of wells and tube wells are constructed for local community. They have separate environment cell to monitor the environmental and pollution control activities.HealthcareTata steel implemented number of healthcare initiatives to its employees and the society. The company employees are benefited by absolve medical facilities even aft er their retirement. The company operates more than 46 free nimble clinics in Jamshedpur and runs Life Line Express medical clinic to the remote places in Jharkhand and Orissa. They organise free blood donate camp, eye camp and provide free medical equipments and beds to hospitals. They conduct a HIV/AIDS awareness programmes to the employees, suppliers and local community.Education CultureThe company runs six schools and one college in Jamshedpur. In Thailand through Grow Smart with Tata Steel programme underprivileged children in remote places are provided with learning facilities. In Singapore the company offers scholarship to poor and disabled children. Tata steel constructed a Tribal Culture Centre to enrich culture heritage among the local community.What is the level of engagement does companies maintained in these initiatives? Whether these approaches and initiatives by companies benefited society?Shell has invested nearly $148 million in society development during the yea r 2008 (Shell, 2009). Shell in Nigeria has made great difference in people live and work by contributing to social responsibility initiatives like health, safety, and education (Idowu and Filho, 2009, p402). But shell image got damaged in Ogoni, where shell has failed to deliver the benefits and rights, like employment, education and clean environment to the Ogoni (Boele, 2001). Ogonis voice, we would be better off today if Shell had never come and taken one drop of oil (Boele, 2001).Shell pointed that it is the Nigerian government who has failed to deliver the right to Ogoni people (Boele, 2001). Shell has been charged for its human rights abuses in Nigeria and they agreed to pay $15.5 million to settle the lawsuits against the executions of protesters, polluting air and water in Nigeria (BCC News, 2009). Though shell spends million dollars in community development resurrecting their public image is a big challenge. For Tata Steel, CSR is not new they are compound in society activ ities from the established of the company. Tata Steel Ltd was awarded with Golden Peacock Global Award for CSR, in improving the quality of life of their employees, local communities and the society (Business Standard, 2009). According to survey conducted by The Nielsen, global consultancy firm, Tata steel is identified has most admired company by stakeholders for their society development initiatives (The Economic Times, 2009).They participate in international partnership like UN Global compact, where they encourage other organization to learn their initiatives and to create positive impacts for local communities (Tata Steel, 2008). The company continuously engaged in various CSR activities for society welfare and community development, this shows their significant growth in those initiatives.Classification and Analysis of CSR ActivitiesIn this section CSR activities of Shell and Tata Steel are classified and analyzed using Ponte et al typology. Here, CSR activity matrix by locatio n and type are viewed from business perspective.ShellCSR InitiativesCSR AwardsDisengaged/Engaged CSR visiblenessproximate/ out-of-town CSR ProfileThe Emirates Businesswomen AwardDisengagedEncourage Businesswomen in strategic development of UAEDistantSocial Reporting AwardsEngagedCorporate communications campaignDistantHealth Safety Environment Contractor AwardEngagedEncourage supplier and contractor for safety operationProximateWorldaware Award forSustainable DevelopmentDisengagedSocially, economically and environmentally development in a community.ProximateLawrie Group Award for Social ProgressDisengagedFree Education facilitiesProximateAwards from Malaysia Society for Occupational Safety and Health (MSOSH)EngagedOccupational Safety for their employee.ProximateEngagedPractice of Code of Business Conduct for their employee, suppliers and contractors.ProximateDisengagedPhilanthropic activities through Shell Foundation.DistantThe above table shows shell CSR initiatives in a form of engaged proximate, an indication of strategic initiatives which meets the company benefits. Disengaged distant indicates the large-hearted initiatives by the company. The following shows Tata Steel CSR initiatives,Tata SteelCSR InitiativesCSR AwardsDisengaged/Engaged CSR ProfileProximate/Distant CSR ProfileNational Energy Conservation AwardEngagedReduced Energy ConsumptionProximateGlobal Business Coalition AwardDisengagedHIV/AIDS education and awareness programme.ProximateGreentech Safety AwardEngagedSafety Management in surface and Mining OperationProximateSingapore Health AwardEngagedHelping Employee to lead healthy and vibrant lives.Proximate5th Asia Water Management Excellence AwardDisengagedHelping the water management industryDistantFederation of Indian Chamber of Commerce and Industrys (FICCI) AwardDisengagedPhilanthropic activities through Tata Steel Rural Development SocietyProximateGolden Peacock Award for CSR and Excellence in Corporate GovernanceDisengagedFor improvin g quality life of employee and their familiesProximateExcellence in Manufacture Award for Tata Steel, ThailandEngagedEnvironment and safety management in their operationProximateEngagedSupplier Guiding PrinciplesDistantDr Jamshed J Irani Award for Excellence in EducationDisengagedProviding quality education in schools of Jamshedpur.ProximateCompare to shell, Tata steel engaged more in philanthropic activities for social welfare and development.Impacts on Business ApproachLantos argues that CSR has three components ethical, altruistic and strategic which every organization must practice (Crowther, 2005). When a government fails, the managers have to be prepared to take up the slack to do good for society and business. Shell follows their business commitment in General Business Principle and code of conduct. Though Shell fails in Ogoni, it has taken significant measures to re-orientate their business principle to encourage more accountable and dynamic set of relationships with stakeho lder and by doing this, it can recapture the position in Ogoni (Boele, 2001). Shell engaged in several philanthropic activities in Nigeria through Shell Foundation. From Ponte et al typology analysis it shows majority of shell CSR investments are Engaged-Proximate initiatives. Most of the Shell CSR initiatives are found in Nigeria and Ogoni, where they reputation was damaged. This clearly indicates shells business motto. Shell spends only tiny amount from their profit towards community development, whereas they earns around $ 400 billion from oil production in Nigeria (BBC News, 2004). Even Tata steel has undergone some social challenge for example Tata Steel was protested by people in sathankulam, Tamil Nadu. They decided to acquire 1000 acres of land in sathankulam for their ilmenite mining operation, which will may result in relocate thousands of local farmers and cause huge damage to environment. In spite of these many threats, Tata Steel had signed the MOU with Tamil Nadu gover nment in 2007, which is still in dispute (Sanhati, 2007). However, compare to shell, Tata steel engaged more in philanthropic activities for community development. Tata Steel partnership with UN Global Compact has increased their publicity and reputation. Tata Steel encourages other organization to learn their activities in society development. All these CSR initiatives by the company have increased their business and brand image.ConclusionThe report has focused on stakeholder recognition of Shell and Tata Steel and their CSR approaches and initiatives. From the analysis is found both Shell and Tata steel are contributed more to the society welfare. However, shells role in the environmental and social impacts in Ogoni cannot easily carry away. Shell spoiled its brand image in issues like Brent Spar, environment pollution, oil spilling, discharge of production waste, and gas conflagrate in Africa. All these activities made the world to look at shells business behavior towards socie ty. Though shells CSR approach and initiatives sounds best across the global, but they have failed to foregather real thirst of Ogoni community. This reveals that shell is more focused on business rather than society. All those CSR initiatives by shell are assumed as their business promotion and profit motive. When we look at Tata Steel, the company has fulfilled all the stakeholders through their corporate governance and sustainability development. They are more focused on community welfare and development. Even though Tata Steel is emerging company compare to shell, shell has learn a lot from them to fulfill all its stakeholders.