Shell and Ethical Issues

Page 1 of 7

Shell and Ethical Issues

By | July 2012
Page 1 of 7
The following analysis evaluates the challenges faced by Royal Dutch Shell Oil Company involving their monumental proposed investment into their Nigerian operations. When global companies experience extreme criticism such as Shell, they are usually tasked with identifying optimum solutions to reverse the negativity. In addition to assessing the challenges, this analysis provides some potential strategies that can be implemented to resolve the issues within this case.

Problem Statement

Royal Dutch Shell Oil Company proposed to execute the largest industrial investment ever made in Africa. Their proposal was a response to three separate issues. However, there were problems with the proposal. A major problem was that two critical entities that Shell proposed to share in the investment, made it clear that it would take some time before they could even consider Shell's proposal. Other major problems included political and social instability within regions where Shell operated. Shell acquired a very negative public image, and it was primarily due to the following: Shell had also been accused of waging an ecological war against natives and the natural habitat. Furthermore, the company was accused of being responsible for the deaths of natives from the land in which Shell procured oil.

Situation Analysis

Shell Oil is one of the largest oil traders in the world. With extensive international operations their largest African operation existed in the country of Nigeria. In this case, Shell's operations in Nigeria created a very complex situation, thus creating numerous factors for the various components included in the environmental scanning analysis.

The economic factor consists of Shell proposing an $8.5 billion integrated oil and natural gas investment, making it the largest industrial investment ever made in Africa. Shell estimated that their proposal would bring an additional $20 billion to the government of Nigeria over a 25-year...