Shell Case - Final
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SHELL IN NIGERIALoes Altena
Martin Belej
Katarina Jablonická
Fanny Latarche23-09-2011
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Agenda
Situation ² Shell in Nigeria
Critical success factors
Current problems Ethical principles
Ethical principles & Shell
Alternatives
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Situation ² Shell in Nigeria (1)
Start of operations in 1937
Joint venture between BP, Nigerian government and
Shell in 1973
Shell·s share: SPDC
Nigerian government: NNPC
Division of profits Per barrel Share
Costs $ 4.50 -
Shell $ 0.70 30%
Elf/Agip $ 0.30 15%
Goverment $ 9.50 55%
$15.00
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Situation ² Shell in Nigeria (2)
Mid 1990s
60% of oil reserves
5000 employees 930.000 barrels of oil a day
Net income of $235.000
Usage of Niger Delta land of 0.3%
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Critical Success Factors
Industry
Exclusive rights toprospect for oilJoint-venture
Strategy¶Cash calls· ² system
Organizational culture
EnvironmentalGovernment
dependency on oilindustry
Rockart & Bullen (1981)
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Current Problems (1)
Politics
Governmental instability & corruption
Military in politics
Socio economic conditions of Nigeria
Social pressure groups
Ethnic tensions & conflicts
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Current Problems (2)
The exploitation of oil by Shell in the Niger Delta is
contested by the Ogoni people (tribe in Niger
Delta)
Environmental issues caused by exploitation
¶Fair share· of operation
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Current Problems (3)
The Trial
MOSOP & the Bill of Rights
´The right to t he control and use of a fair proportion of
Ogoni economic resources for Ogoni development.µ
´The right to protect t he Ogoni environment and ecology
from furt her degradation.µ
Saro-Wiwa´They are going to arrest us all and execute us.
All for Shell.µ
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Ethical Principles
"It pays to be ethical!"
The principle of equality
Just institutions Rights and duties
Principle of integrity
Responsibility
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Ethical Principles and SHELL
Equality principle
Unfair treatment ofdefendants
Rigged trial
Principle of integrityNone superior sets ofstandards over the requiredminimum
Rights and dutiesDeprived rights ofShell·s lders
j Responsibility
Any precautions held toprevent the radicalactions stakehothatfollowed Just institutions
Acts based on the laws of
the local institutions
Promotion of ¶The Good·supressed
jRights and duties
Deprived rights ofShell·s stakeholders
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Alternatives (1)
Do Nothing
Accordance with Shell·s business principles
Avoiding conflicts with Nigerian government
Severe criticism
Tension between Shell and the Ogoni tribe
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Alternatives (2)
Extensive Lobbying
Complies with moral obligations
Apolitical impression
Criticism
Tension between Shell and the Ogoni tribe
Unlikely to succeed
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Alternatives (3)
Pressuring the Nigerian Government
Future relationship with the Ogoni tribe
Possible conflicts with the Nigerian government
Inconsistency with Shell·s business principles
No real leverage
Unethical
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Alternatives (4)
Releasing an Official Public Statement
Positive public image
Future relationship with the Ogoni tribe Publicizing the trial
Contempt of court
Inconsistency with Shell·s business principles
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References
Rockart, J. and Bullen, C., 1981. A primer on critical success factors. Center for Information Systems
Research Working Paper No 69. Sloan School of Management, MIT, Cambridge, Massachusetts.
Andreas W. Falkenberg: ´When in Rome« Moral maturity and Ethics for International Economic
Organizationsµ Journal of Business Ethics, Sept. 2004