Shell case study: evaluating strategic alternatives for stakeholder value

¶ … Shell

Companies presented in the case have been violating and continue to violate the Act on health, environmental and safety concerns. Shell has failed to operate in accordance with relevant international principles, agreements, standards, and objectives. Therefore, Shell should support building local capacities through tight cooperation with local communities such as business interests and promoting business activities in foreign and domestic markets. All these should be consistent with the importance of a sound business practice. Shell has negatively affected the local community activities like fishing and tourism and the local culture. The new project initiated by the company will not provide permanent jobs. The construction will only need hundreds of temporary workers with only a handful of permanent jobs (Kennelly & Mengel, 2011). In addition, the adverse impacts on the environment threatens local tourism, specifically, the risk of contamination of the Carrowmore Lake destroys the tourist sector. Since the company started operating, Shell has orthophosphate encouraging intensive growth of algae. This lake was an important tourist attraction due to the spawning entrance for salmon and trout. Authorization of new forestry has ceased because of the lack of its commerciality.

Potential walks for tourists, developed in over twenty years, photo shoots, marine mammal watch and sea-trips have been destroyed severely. There would be no tourist in this place because of the destruction perpetrated by the company. The company dumps its waste at sea and its proximity to the seashore downgrade the fishing industry -- lobster and crabs. No one will be interested in buying shellfish from such polluted water. Although Shell proposes that the waste pipe will be withdrawn twelve kilometers from the sea, a close analysis of the case clarifies the deception that the twelve kilometers are related to the landfill headed by the long bay (Kennelly & Mengel, 2011). Looking at the proposed pipeline, its outlet is merely two kilometers outside the actual coastline. A long-standing laboratory facility will employ twenty-five individuals at the site where Shell is constructing the refinery. Immediately the new refinery is operational, the laboratory facility will cease to function.

Shell must strive to build a relationship of mutual trust and confidence between the company and the community in which it operates. This requires developing and applying effective self-regulatory management systems and practices, which promotes a relationship of mutual truth and confidence between the business and the larger society. Shell as the project developer failed to collaborate with the local communities. Meaningful communication is lacking as the complete project became public in the final two months. The communities have not been able to respond to the project until then, but the company is building components of the project. Evidently, there is no relationship of mutual trust and confidence between the enterprise and the community (Werhane & Ofiesh, 2001). The concerns raised by community members had not been incorporated during the planning phase of the project. The company must embrace such discussions, communication, and consultation before sanctioning the project. It is commercially unviable to change things now that the project has already been initiated.

Alternatively, Shell can separate the development of Corrib gas reserve from the development site identified by Corrib gas developers. From an analytic viewpoint, the two are different issues. This study proposes an offshore processing alternative either employing sub-sea supersonic, causeway-based facility or shallow-water platform processing. It also proposes a land-based refinery in an unpopulated and remote site at Glinsk a few miles from the proposed location. This alternative is likely to receive massive support and provides a reasonable and a viable alternative model (Kiron, Kruschwitz, Haanaes & Velken, 2012). From this alternative, no community area will be affected in any way: the company will have secured community consent. I would prefer to request the company to go back to the drawing board and design the project appropriately before bringing it to fruition. Besides a guaranteed state support, it will also secure a force in the community. The enterprises tend to decline to negotiate with the local community. This study proposes alternatives to mitigate environmental impacts by genuinely examining the following options:

Glinsk as an alternative location is far from residential areas and more acceptable to the locals. This is because it will not be situated at the drinking water catchment site. From the proposed location of the site within the Carrowmore catchments of drinking water, the Glinsk alternative does not need erecting a discharge pipe across Broadhaven Bay with its discharge affecting local fisheries (Werhane & Ofiesh, 2001).