Quality and Environmental Issues in Shell International

Quality and Environmental Issues in Shell International

Enid Mumford (Manchester University, UK)
Copyright: © 2003 |Pages: 23
DOI: 10.4018/978-1-59140-118-6.ch012


Shell provides an excellent example of an international group that for many years has used socio-technical values and approaches to help the introduction of major change into both its internal structures and its external projects. Shell was one of the first of the multinationals. It has an Anglo-Dutch ownership and is one of the very few companies which divides effective control between two or more different nationalities. Its size and the fact that its products are vital to society mean that it has been able to exert considerable influence on governments (Molitor, 2001). However, today, its future in terms of products and markets is uncertain. Oil industry experts predict that petrol reserves will run dry around 2050. Shell itself has forecast that more than 50% of energy will be from renewable sources by this date, while OPEC foresees supplies lasting until 2080. Other forecasts calculate a 42- to 50-year remaining supply. These estimates may not be correct but it is undeniable that fossil fuel supplies are finite and world supplies are steadily diminishing, although new sources of oil are being discovered. It seems certain that petroleum and natural gas supplies will soon no longer be burned as fuel. This makes companies such as Shell International fascinating subjects for study. We need to ask What are their plans for the future? A recent chairman of Shell has said, “The only sure thing about the future of the energy industry is that it will be very different from today.” Leading oil corporations like Shell have now declared themselves to be “poly-energetic.” They have major investment plans in alternative sources of energy such as sun, wind and hydrogen (Bracho, 2000). This means that they must be more expert than most international companies in managing major change. Shell today is certainly not standing still. It recognises that the oil era may be coming to an end and that it now needs to be very aware of alternate sources of energy. Shell’s future investment plans include gas, sun, wind and hydrogen. This is not only because of exhaustion of the oil fields but because the countries of the world are demanding alternative renewable and cleaner forms of energy (Bracho, 2000). Shell management says that its businesses exist to meet the energy needs of society in ways that are economically, socially and environmentally viable. It maintains, “All of our businesses are united by common goals: to make the most of our existing business, to gain new business and to break new ground.” For many years and in different ways it has also sought to be an efficient and ethical employer and supplier. This has meant that it must be continually aware of what society expects and needs from it. To achieve this in recent times, throughout the late nineties Shell International held conversations with many different groups to try and discover both today’s expectations of multinational companies and how the general public in different countries saw Shell and its activities. This, called Shell’s Transformation, involved 7,500 members of the general public in 10 countries and 1,300 opinion leaders in 25 countries. Six hundred Shell employees in 55 different countries were also interviewed. The picture that emerged was both good and bad. Half of the general public and opinion leaders had a favourable view of Shell, while 40% were neutral and 10% unfavourable This last group saw Shell as negligent in its care of the environment and human rights (The Shell Report, 1998). Shell decided that it must again make it clear to the world and to its customers that, while its primary responsibility was the economic one of running a successful company, it fully accepted a responsibility to ensure that it ran its businesses in a way that was ethically acceptable to the rest of the world. In 1976 it had produced a Statement of General Business Principles to provide an ethical code of conduct which would take account of changes in society and in worldviews. In 1997 there was major revision of these, involving both internal and external consultation. Shell now had nine principles which would influence all its activities and relationships. There were key new commitments to human rights and to a contribution to sustainable development and a stronger “no bribes” clause.

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