Organizational Management Seminar 5311
Royal Dutch/Shell in Nigeria (A)
As described in the Harvard Business School case Royal Dutch/Shell in Nigeria (A), the primary issue facing Shell is scrutiny over their involvement, or lack of involvement, in the civil unrest between the Nigerian government and a group of activists representing the Ogoni people – one of Nigeria’s 240 minority tribes. Publicly the conflict is between the Nigerian government and the Ogoni people. However the core of the problem for Royal Dutch/Shell is establishing a strategic approach to manipulating the political landscape within Nigeria.
In the year leading up to the arrest of Ken Saro-Wiwa, an Ogoni activist, Shell had been the target of increased scrutiny in Europe by Greenpeace. The controversy centered on the company’s handling of the Brent Spar, a North Sea storage buoy of hazardous pesticides. Although Shell had been the subject of criticism by environmentalist before, the Brent Spar incident had an economic impact that lead to boycotts and low sale volumes throughout Europe. This led to image problems for Royal Dutch/Shell, whom only a year earlier had ranked third in the Financial Times survey of Europe’s “most respected companies” (1994).
The impact to their image resulted in Royal Dutch/Shell taking a weak stance against the corrupt Nigerian government. As the largest oil company in the world, Royal Dutch/Shell controlled 60% of Nigeria’s known oil reserves, providing them the opportunity to positively impact the Ogoni people and the Nigerian Delta as a whole. Poor leadership and lack of a strategic plan resulted in turmoil for Royal Dutch/Shell and the surrounding Ogoni community.
In 1995 Ogoniland housed 100 oil wells – 96 of which where owned by Royal Dutch/Shell. Royal Dutch/Shell however only received 4%, or $208 million, of the $5.2 billion in total gross revenues with Nigerian government receiving 79%, or 4.1 billion, with other companies receiving...
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