Exxonmobil Corporate Social Responsibility

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Communities and Shareholders: The impact of how ExxonMobil manage their interaction

Exxon-Mobil is the world’s largest privately owned multi-national oil and gas company (Skjaerseth 2003). For companies as large as ExxonMobil, which possess considerable capital resources and are able to exert considerable power and influence, society is increasingly demanding that they behave in a socially responsible manner (Diara, Alilo, and McGuire 2004). There is a growing expectation that companies will adopt a business approach that illustrates responsibility to society above and beyond the economic function and legal performance of the firm (Gibbs 2009). This expectation can be understood as an implicit social contract. One of the underlying concepts of social responsibility is stakeholder management (Davidson 2006). This involves balancing the claims of stakeholders against the decisions a corporation makes (Maloney 2009). The consequences for companies that are judged as not taking into consideration the expectations and needs of stakeholders are varied, but may include reputational damage and loss of market share (Baker n.d.; Smith 2007) as consumers switch their brand preferences on the basis of ethical considerations (Gueterbock 2004). This paper will review the social performance of ExxonMobil in terms of the way the corporation manages their relationships with two groups of stakeholders: the communities in which ExxonMobil conducts its business operations and the corporation’s shareholders. While it is recognised that there are other stakeholders in ExxonMobil’s operations these are beyond the scope of the current paper.

The most commonly accepted objective for business activities in the finance and accounting fields is to maximise profit and shareholder wealth (Cooper 2004). In doing so, a critical concern is whether or not the company has behaved in a socially acceptable manner particularly when dealing with stakeholder groups directly impacted by their business operations. Diara et al. (2004) observes that ExxonMobil has been proactive in stakeholder management and has a long tradition of addressing community challenges and opportunities through partnering with non-profit organisations around the world in communities within which they operate. For instance, in African countries in which ExxonMobil operate they have partnered with the Academy for Educational Development to work on the NetMark project (Diara et al. 2004), a need which has been identified by local community stakeholders. The aim of NetMark is “to reduce the impact of malaria in sub-Saharan Africa through the increased use and sustainable supply of insecticide-treated mosquito nets (ITNs), and insecticide treatment kits for nets” (p. 70 Diara et al. 2004). In particular, the partnership has worked to facilitate ITN access to pregnant women through a discount voucher system that is distributed by health agents delivering antenatal care (Diara et al. 2004). The pilot intervention in Zambia achieved a 75% redemption rate, and it is believed that through distribution efforts (built on existing commercial networks including ExxonMobil gas stations), there are opportunities to reach more than 250,000 pregnant women in Zambia, Ghana and Nigeria (Diara et al. 2004). The benefits from this initiative have included an improved corporate image (for both partners), additional resources for public health interventions and improved client loyalty (Diara et al. 2004). This demonstrates that through developing a relationship with local community stakeholders they have upheld their social contract to support the communities within which they make a profit at little cost to their shareholders.

Similarly, in Nigeria, ExxonMobil’s efforts have focussed on the improvement to “host” communities. These efforts have been concentrated on areas of health care, road construction, electricity and water supply and have included the construction and renovation of health centres...
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