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Paradoxes and Dilemmas for Stakeholder Responsive Firms in the Extractive Sector: Lessons from the Case of Shell and the Ogoni

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Abstract

This paper examines some of the paradoxes and dilemmas facing firms in the extractive sector when they attempt to take on a more stakeholder-responsive orientation towards issues of environmental and social responsibility. We describe the case of Shell and the Ogoni and attempt to draw out some of the lessons of that case for more sustainable operations in the developing world. We argue that firms such as Shell, Rio Tinto and others may well exhibit increasingly stakeholder-responsive behaviours at the corporate, strategic level. However for reasons of strategy, lack of competency or institutional will this increasing level of corporate responsiveness may not be mirrored effectively in dealings between subsidiary business units and their most important direct stakeholders: for example local communities and in the developing world. We contrast the struggles of Shell to replicate its corporate stakeholder-responsiveness at the local level in Nigeria with the experiences of other firms that seem to have developed managerial capabilities at a somewhat deeper level throughout the firm with consequent benefits both for stakeholders and the business.

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Authors and Affiliations

  1. Erivan K Haub Program in Business and Sustainability, Schulich School of Business, York University, 4700 Keele Street, Toronto, Ontario, Canada, M3J 1P3

    David Wheeler

  2. Graduate Research Centre for the Comparative Study of Culture, Development and Environment, Sussex University, U.K

    Heike Fabig

  3. Centre for Stakeholding and Sustainable Enterprise, Kingston Business School, Kingston University, U.K

    Richard Boele

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Wheeler, D., Fabig, H. & Boele, R. Paradoxes and Dilemmas for Stakeholder Responsive Firms in the Extractive Sector: Lessons from the Case of Shell and the Ogoni. Journal of Business Ethics 39, 297–318 (2002). https://doi.org/10.1023/A:1016542207069

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