THE INFLUENCE OF CULTURE ON MANAGEMENT PRACTICES OF MULTINATIONAL FIRMS

ABSTRACT

            It is a well-known fact that business organization develops a particular work practice and management attitude, which reflect their shared values, aspirations and goals. A workforce is made up of people with diverse values. The more the organization accept these values the higher the morale productivity of the employee. This is easier when members of this organization are drawn from the same cultural configuration. The culture of people which constitute the organization would wish to express their diverse values and expects that such be respected.

            Culture constitutes the spiritual consciousness of people and it is deep rooted in their life. Their rituals are part of their daily lives and they will give their best to those who will make them grow and allow them to retain their basic core values. However, in a multinational workplace there are power bases and corporate culture are influenced by the culture of the power base. In most multinational organizations in Nigeria, the culture of the host country determines how work is done.

            The study discovered that management practices are influenced by culture, the cultural orientation of the company’s management determines the management practice they adopt. Where there is multinational orientation, the management practice causes the workforce to stretch in other to align to the culture being practiced by the organization, this is however, unproductive.             The work of this research is reported in chapter five. Chapter one laid down the basic philosophy necessitating the study as well as the nature of the problem, it stated the basic questions it aimed to answer. The second chapter discussed various lectures on the subject. Chapter three presented the method adopted, while the remaining chapters presented the outcome of the study and made useful conclusion.

Download Full Material-N5000

 

CAPACITY PLANNING AND PERFORMANCE IN THE NIGERIAN BREWING INDUSTRY

ABSTRACT

The study investigated the influence of capacity planning on the performance of brewery firms in South Eastern States of Nigeria. The specific objectives of the study were to determine the extent to which capacity planning enhanced the level of performance in the brewing industry in South Eastern Nigeria. The study examined the nature of the relationship between capacity requirement planning and materials requirements planning, to ascertain the extent to which capacity planning sustains organizations competitive advantage, thereby determining the relationship between capacity planning and capacity building, determining the steps toward developing a capacity planning that affects the profitability in the brewing firms in the area studied. The research design adopted in the study was a combination of the survey, oral interview and model modifications. Hypothesis 1,3 and 5 were  tested using Z test of population proportions and 2 and 4 using Spearman’s Rank Correlations revealed that capacity planning to a large extent enhanced the performance in the brewing industry in Southeastern Nigeria, that there was a significant capacity planning to a large extent (p< 0.05) enhanced the performance in the brewery industry in the area studied. Capacity requirement had positive relationship (p< 0.05)with materials requirements planning. Capacity planning to large extent (p< 0.05) sustained the organizations competitive position. There was significant positive relationship (p< 0.05) between capacity planning and capacity building. The steps of the capacity plan positively (p< 0.05) affected profitability. Positive relationship between capacity requirements planning and materials requirements planning, that capacity planning to a large extent sustained the organizational competitive advantage, that there is a positive relationship between capacity planning and capacity building, that the 12 steps of the capacity plans were developed that positively affected the profitability in the brewing industry in the area studied.  In conclusion, the finding that capacity planning enhanced the performance in the brewing industry in Southeastern Nigeria implied that it made the brewing companies studied to achieve their organizational goals and objectives. The finding that there was a significant positive relationship between capacity requirements planning and materials requirements planning implied that there was a positive correlation between them. This means that materials requirements planning which was a method of coordinating the detailed production plans could lead to an enhancement of capacity requirements planning which meant taking future decisions on the items needed for the production capability of the brewing facility.

CHAPTER ONE

1.1 BACKGROUND TO THE STUDY

Capacity Planning has enhanced the performance of the brewing industry in Nigeria right from 1946 when Nigerian Breweries Limited set up the First Brewery in Nigeria (Nigerian Breweries PLC, 2011). The direction has been to increase the number of breweries. Guinness Nigeria Plc set up a Brewery in Lagos in 1963. The magnitude is now five breweries located at Ikeja, Ogba, Benin, Jos and Aba (Guinness Nigeria Plc; 2011). Capacity has continued to be the production capability of a facility in terms of the inputs, throughput and outputs.

 

In 1989, the Federal Government policy of using local inputs such as sorghum and corn instead of malled barley negatively affected a lot of the breweries. Both Nigerian Breweries Plc and Guinness Nigeria Plc depended on the assistance of the Parent Companies. The Brewing Industry in Nigeria have relied on capacity planning for meeting the increased demand for beer, stout and malt products through Demand Forecasting and Capacity Requirements Planning (Guinness Nigeria Plc, 2011; Nigerian Breweries Plc, 2011).

 

Capacity building has followed capacity planning in the creation of the enabling environment with appropriate policy and legal frameworks, institutional development including community development (of women in particular). Human Resource Development and strengthening of managerial systems, adding that, UNDP recognizes that capacity building is a long-term, continuing process, in which all stakeholders participate (ministries, local authorities, non-governmental organizations and water user groups, professional associations, academics and other (citation: UNDP). Capacity building is very necessary for capacity planning. Planning is deciding in advance what is to be done, when, where, how and whom it is to be done. In that it bridges the gap from where we are to where we want to go in any business building and performance. It is continuous, periodic managerial activities and reduces uncertainty.  Capacity is the production capability of a facility and it is measured in terms of inputs, throughput and outputs. Manufacturing is that aspect of industry in which products, waste products and services are produced (UNDP, 2012).

 

By 1992, capacity building became a central concept in Agenda 21 and in other United Nations Conference on Environmental and Development (UNCED) Agreements. By 1998, the UN General Assembly had commissioned and received evaluations of the impact of the UN system’s support for capacity building. These evaluations were carried out by the UN Department of Economic and Social Affairs as part of the United Nations GATT Agreement’s (UNGA’) triennial policy review during which it looks at all UN system development activities (UN Publications Section). Since then, the issue of capacity building has become a major priority within the global conventions, the Global Environmental Facility (GEF) and the International Communities.

 

In the year 2000, UNDP through its Strategic Partnership with the GEF Secretariat, launched the Capacity Development Initiative (CDI), a consultative process involving extensive outreach and dialogue to identify countries’ priorities issues in capacity development needs, and based on these findings, to develop a strategy and action plan that addresses identified needs to meet the challenges of global environmental action.

 

In 2002, the World Summit in Sustainable Development (WSSD) and the Second GEF Assembly reaffirmed the priority of building the capacity of development countries. The WSSD recommended that GEF resources be used to provide financial resources to developing countries to meet their capacity needs for training, technical knowhow and strengthening national institutions.

 

Capacity Building is, however, not limited to international aid work. More recently, the term is being used by governments to transform community and industry approaches to social and environmental problems.

According to Skinner (1985), there are five periods of industrial history that stand out in the development of manufacturing management:

1780 – 1950    Manufacturing leaders as technology capitalists.

1850 – 1890    Manufacturing leaders as architects of mass production.

1890 – 1920    Manufacturing management as movers in the organization.

1920 – 1960    Manufacturing management refines its skills in controlling and stabilizing.

1960 – 1980    Shaking the foundations of industrial management.

During the early years of the indusial revolution, production began to shift from low volume activity to larger-scale operations. Although the scale of these early operations was large, the machinery was not particularly complex and production operations were rigid. The management of these operations remained essentially in the hands of top management with the aid of overseers. Working conditions during this period were often abysmal.

 

The major thrust of the Industrial Revolution took place in the (second 40-year) period from 1850 – 1890. During this period, the concepts of mass production and the assembly line were born. Since coal could be efficiently transported, plants could be located in a larger variety of locations. The plant foreman had enormous power and influence during this period.

 

According to Skinner(1985), the job of production manager actually came into being in the period 1890 – 1920. Manufacturing processes became too complex to be handled by top management personnel only. With this complexity came the need for scientific management techniques. Frederick Taylor (often called the father of industrial engineering) is generally credited with being the originator of the concept of scientific management. Most of the scientific management techniques introduced around the turn of the century involved merely breaking a task down into its various components. These techniques are probably less scientific than just orderly. With the new levels of complexity, the single plant foreman could no longer coordinate the demands of producing a varied product line and changing production schedules.

 

The enormous worldwide depression that took place n the 1930s notwithstanding, in many ways the period 1920 – 1960 can be considered a golden age for the development of industry in the United States. By 1960, the United States was the preeminent economic power in the world. With the growth of the labour movement, working conditions had improved enormously. True scientific methods started finding their way into the factory. Mathematical models for learning, inventory control, quality control, production scheduling, and project management gained acceptance by the user community. Top management often came through the ranks of production professionals during this period.

 

Since 1960, many American companies have relinquished their domination of certain markets. Products that were traditionally produced in the Untied States are now imported from Germany, Japan, and the Far East. Many products are produced more cheaply and with higher quality overseas. Furthermore, management-employee relations are often better in foreign companies. Quality circles, introduced in Japan, allowed employees to input opinions about product development and production procedures. Far more sophisticated scientific production methods have been adopted in Japan than in other countries. For example, there are many more robots and modern flexible manufacturing systems in Japan than in the United States (Skinner, 1985).

 

Over the past five years, a broad conceptual framework has emerged. This approach is increasingly being adopted by the development cooperation community. It involves a System Perspective that addresses various levels of environmental management capacities (i.e. capacities of institutions, individuals, overall countries and regions) (Vallejo, 2006). This approach lays greater emphasis on the Capacity Development Process itself, on local ownership of its process and on equal partnership in its support (Lafontaine, 200).Capacity Building involves human resource development, the development of organizations and promoting the emergence of an overall policy environment, conducive to the generation of appropriate responses to emerging needs (UNDP/UNDOALOS, 1994).

 

The concept of capacity building includes the following issues.

Human resource development, the process of equipping individuals with the understanding, skills and access to information, knowledge and training that enables them to perform effectively.Organizational development, the elaboration of management structures, processes and procedures, not only within organizations but also the management of relationships between the different organizations and sectors (public, private and community).Institutional and legal framework development, making legal and regulatory changes to enable organizations, institutions and agencies at all levels and in all sectors to enhance their capacities.The levels of capacity building are that:The Individual: refers to the process of changing attitudes and behaviours-imparting knowledge and developing skills while maximizing the benefits of participation, knowledge exchange and ownership.The Institution: focuses on the overall organizational performance and functioning capabilities, as well as the ability of an organization to adapt to change.

 

The System: emphasizes the overall policy framework in which individuals and organizations operate and interact with the external environment (Lafontaine, 2000).

 

1.2   STATEMENT OF THE PROBLEM

There is difficulty in determining the extent to which capacity planning enhanced performance in the brewing firms in Southeastern Nigeria from the inception of brewing industry in Nigeria in 1946 to date. Capacity has consistently and continuously determined operational capabilities of decision, focasting changes in demand attitudes, skill and aids proximity to market future time services needed and work load leading to various shortage or lack of stock in production process which involves complex measures in terms of input, through put and output. This problem leads to other challenges in ascertaining the relationship between capacity requirementsplanning and material requirements planning and the extent to which capacity planning sustains organizations’ competitive advantage.

 

Determining the extent of the relationship between capacity planning and capacity building and the steps towards developing a capacity plan to improve the profitability in the brewing sector have also produced several challenges and these lead to lack of gateways. It is these challenges that are to be addressed in this study.

 

The capacity planning problem of a brewing firm would make it have less output in the form of Lager beer, Stout and malt than is demanded by the present and potential customers. One of the numerous ways of solving this problem is to build a new brewery firm. This is a long term decision that will raise new issues of plant location, plant layout, selection and design of the product, selection of equipments and processes, production design of items processed, and job design. If these issues are not properly handled, performance will be negatively affected. This is why the topic on capacity planning and performance in the Nigerian brewing industry in the Southeastern States of Nigeria is apt.

 

1.3 OBJECTIVES OF THE STUDY

The thrust of the study is the effect of capacity planning on performance in the Nigerian brewing industry in Southeastern Nigeria.

The specific objectives of the study are as follows:

• To evaluate capacity planningand performance in thebrewing industry in Southeastern Nigeria.
• To assess capacity requirements planning and materials requirements planning.
• To ascertain the extent to which capacity planning sustains organisations’ competitive advantage.
• To evaluate the relationship between capacity planning and capacity building.
• To assess the steps toward developing a capacity plan and the profitability in the brewing firms in the area studied.

1.4 RESEARCH QUESTIONS

This research is designed to provide answers to the following questions:

1. To what extent does capacity planning enhances performance in the brewing industry in South Eastern Nigeria?
2. What is the nature of the relationship between capacity requirements planning and material requirements planning?

• What is the extent to which capacity planning sustains organisations’ competitive advantage?

1. What is the extent of the relationship between capacity planning and capacity building?
2. How do we assess the steps that could be used to develop capacity planning that would affect profitability in the brewing industry in the area to be studied?

1.5 RESEARCH HYPOTHESES

Five research hypotheses have been formulated to guide the study. They are as follows:

(i):        Capacity planning to a large extent does not enhances performance in the brewing industry in South Eastern Nigeria.

(ii):      There is no significant relationship between capacity requirements planning and material requirements planning.

(iii):     Capacity planning to a large extent does not sustain organizations’ competitive advantage.

(iv):      There is no positive significant relationship between capacity planning and capacity building.

(v):       The steps towards developing capacity plan that would not affect profitability in the brewing industry in South Eastern Nigeria are of the same order of magnitude.

• SIGNIFICANCE OF THE STUDY

This study will be of immence significance to the Shareholders, Board members, Manager and Stakeholders of brewing firms. It will also benefit officers of government, the public at large and future researchers in the following ways: Shareholders, Members, Managers, Stakeholder, Officers of  Government,The public and Researchers.

 

1.7 SCOPE AND DELIMITATION OF THE STUDY

The focus of the study is to determine the extent to which capacity planning enhances the performance in the brewing industry in the South Eastern Nigeria. The brewing companies were chosen across the major zones in south eastern Nigeria in terms of subject matter, methodology, spatial and data that best fits the study.

 

The geographical scope is South Eastern Nigeria, and the time scope of the study is 2 years from December 2010 to December 2012. The brewing firms studied are Nigeria Breweries Plc, Ninth Mile  Enugu, Guinness Nigeria Plc, Aba (former Dubic Breweries Plc), Premier Breweries Plc Onitsha and Continental Breweries Plc Awoomama.

 

1.8       LIMITATIONS OF THE STUDY

• Attitude of Respondents: Privacy of information and attitude of respondents were alo being constraints. Some of the respondents were reluctant at releasing the required information as a result of prejudiced opinion conceived by the study.
• The Survey Research Design: It had the limitation that some respondents were not willing to give answers to the probes. This limitation is minimized by persuading the respondents to give answers.
• The oral interview: Ithad the limitation that the interviewing situation may change from one situation to another especially if more than one field data collector is used. This limitation is minimized by the Researcher doing most of the field work.
• The Questionnaire Research instrument: It had the limitation that its structured nature compelled some of the respondents to give answers that they do not fully endorse. This limitation was minimized by also asking some open-ended questions in an oral interview schedule.
• The oral interviewschedule: It had the limitation that the open-ended questions asked were difficult to analyse. This limitation was minimized by also using relative frequencies as the numbers given over the total number of research instruments returned.
•  
• 1.9    PROFILES OF THE BREWING FIRMS STUDIED
• Historical Development of Nigerian Breweries
• Nigerian Breweries Plc (NBPLC) is the country’s pioneer factory. Incorporated in 1946, it commenced production in 1949. It started as a joint venture between the United African Company (UAC) International, UK and Heineken of Holland, Thus, at inception, it was 100 per cent foreign owned. By the early 1950s, when it began operating fully, some indigenous traders already involved with its products were invited to become shareholders. Under the indigenization policy of the early 1970s the foreign shareholders were forced to sell a significant proportion of their holdings. Today, the company is 60 per cent Nigerian owned and 40 per cent foreign owned. The 60 per cent Nigerian stake is held by company employees and members of the public, while the 40 per cent foreign ownership is split almost equally between CWA Holdings Limited (for Unilever) and Heineken Brouwerijen BV (Nigerian Breweries Plc, 2011).

Download Full Material-N5000

ABSTRACT

This study examined the Corporate Social Responsibilities (CSRs) of Shell Petroleum Development Company (SPDC) and Nigeria Agip Oil Company (NAOC) for Sustainable Community Development in Rivers State. Five research questions and three null hypotheses were posed for the study. The research design adopted was the survey design. The population of the study comprised of the Community Development Committee (CDC), Shell and Agip Community Liaison Officers (CLOs) who were the indigenes of the oil communities. The populationalso include staff of the Corporate Community Relation Department of SPDC and NAOC. The total sampled size was 731 respondents representing 35% of the targeted population. The instruments used for data collection were questionnaire, focus group discussion and interview. The research questions were analyzed using percentages and mean statistic. T test was utilized in testing the hypotheses at 0.05 level ofsignificance. The result of the study revealed that Shell CSR was not well known by the host communities,while Agiphave CSR for sustainable development of their host communities. Shell and Agip through CSR contributed positively in resolving conflicts in their host communities. Shell through CSR could not contribute muchto socio-economicdevelopment of the host communities while Agip through CSR contributed to socio-economic development of their host communities. The companies (Shell and Agip)  through CSR could not mitigate the environment of their host communities. Based on the findings the following recommendations were made: Oil companies should recognize their responsibilities, the host communities expectations and develop partnership as preferred model for their community development activities for peaceful co-existence. The oil bearing communities should try as much as possible to be a good host to these oil multinational companies by providing a safe and conflict free environment for them. The government should provide an enabling environment for sustainable development through CSR principles and practices and also leading by examples

CHAPTER ONE

INTRODUCTION

Background to the Study

Corporate social responsibility (CSR) also called corporate citizenship, is a concept whereby organizations consider the interest of society by taking responsibility for the impact of their activities on customers, employees, shareholders communities as well as the environment. Corporate social responsibility goes beyond statutory obligation to comply with legislation but voluntarily taking further steps to improve the quality of life for employees, the local communities, and society at large. Today, the principle of CSR dictates that organizations must not only ensure returns to share holders, wages to employees and products and services to customers, it must also respond to community, societal and environmental concern.

 

 

Kaliski (2007) saw social responsibility as an ethical or ideological theory which shows that an entity whether it is a government, corporation, organization or individual, has a responsibility to the society. He proceeded by saying thatthis responsibility can be “negative” in that it is a responsibility to refrain from acting (resistance stance) or it can be “positive” meaning there is a responsibility to act (proactive stance). Kaliski went further to say that social responsibility is voluntary. It is about going above and beyond what is called for by law (legal responsibility). It involves an idea that it is better to be proactive towards a problem. Social responsibility means eliminating corruption, irresponsible or unethical behaviour that might bring harm to the community, its people or the environment.

Reynard and Fortes (2002), say however, for many MNCs CSR is an outcome of public pressure arising from their operations in developing countries in relations to human right, environmental pollution and labour issues. He proceeds, CSR is a process driven by globalization. Proponents of CSR are keen to demonstrate that business has responsibilities beyond the production of goods and services and profit making. Social responsible business in today society must maintain ethical principles in order to be successful.

Abagail and Donald (2002) assert that CSR depends on its size, level of diversification, research and development, advertisement, sales, consumers income, labour, market conditions and stage in the industry’s life cycle. Base on these cost benefit analysis of the corporation, the ideal level of CSR which managers can offer is determine. There is relationship between  CSR and financial performance of any organization.

The principle of CSR holds companies or organizations responsible for the people they affect, it also holds the companies responsible of inactive or indecision. Basing that organization has the power to help people or at least not harm them. Social responsibility is a doctrine which says that every being whether it is village, town, state, corporation, organization, government or individual has responsibility to the society.Social responsibility is a doctrine which says that every being whether it is village, town, state, corporation, organization, government or individual has responsibility to the society. A sustainable community is continually adjusting to meet the social and economic needs of its residents while preserving the environment’s ability to support it. A sustainable community uses its resources to meet current needs while ensuring that adequate resources are available for future generations. It seeks a better quality of life for all its residents.

Wheeler (2002) asserts that sustainable communities maintain nature’s ability to function over time by minimizing waste, preventing pollution, promoting efficiency and developing local economy. He concludes that a sustainable community is a living system in which humans, natural and economic elements, are interdependent and draw strength from each other.

The oil industry in Nigeria is predominantly located within the Niger Delta region. Most of the inhabitants of this region are heavily dependent on the environment for livelihood, through fishing and farming. However, oil exploration by multinational oil companies (MNC) has had a lot of negative environmental, political and socio-economic influence on the communities. The dynamite (explosives) used by exploration companies for exploration destroys aquatic life, cracks the communities buildings (houses) and oil spillages which flow into lands, rivers, swamps and creeks destroy crops, and make the soil sterile and unproductive.

Environmental degradation is very obvious and as a result, poverty is a pervasive problem among these communities. This has resulted in the development of a sense of relative deprivation and perception of alienation within the host communities.

Suberu (1998), observes that the difficulties and deprivations of oil producing communities have invariably brought them into direct confrontation with the oil prospecting companies. These agitations are being spear headed by ethnic Nationality, Associations such as the Movement for the Survival of Ogoni People (MOSOP). Ethnic Minority Right Organization (EMIRON) and numerous others. The conflict between the oil producing communities and the multinational oil companies has manifested in several forms. Hutchful (1998) asserts that at times it involves disruption of company’s operations through blockage of company premises, and access routes to production sites forcible seizure of oil installations and protest demonstrations. It may also take the form of destruction and theft of company properties. Some times the conflict can manifest in legal tussles arising between affected groups or individuals from the oil bearing communities and the affected oil producing companies.

The activities of the oil industries in Nigeria is dominated by multinational oil companies such as Shell Petroleum Development Company (SPDC), Chevron, Mobil, Texaco, Elf, Nigeria Agip Oil Company (NAOC), etc.

These oil companies operate under a joint venture agreement with the Federal Government, represented by the Nigerian National Petroleum Corporation (NNPC). Shell Petroleum Development Company of Nigeria Limited (SPDC) is the largest oil and gas exploration and production company in Nigeria. It is the operator of a joint venture in which NNPC holds 55% percent shares; Shell 30 percent, Elf 10 percent and Agip 5 percent.

Shell Development Company of Nigeria is prominent in the history of Nigeria’s development since the need to develop the country has over the years been wholly dependent on fund from the oil industry.The oil exploration. The discovery of oil in 1956 in commercial quantity and its subsequent oil boom in 1970’s Nigerians Societies have observed remarkable structural transformation which has resulted to rapid urban development as opposed to environmental degradation of oil bearing communities.

Shell Diary, (1998) shows that SPDC produces almost half of the country’s oil from more than 90 oil fields in the Niger Delta areas. It also supplies 95% of the country’s commercial gas reserves. The scale of SPDC operation is massive, involving an estimated land of 6,200 kilometers of pipeline more than 1000 wells, 87 production stations, 9 gas plant and large terminals at Forcados and Bonny.

Nigeria Agip Oil Company (NAOC) struck oil in 1965, but actually started production in 1970. The federal government of Nigeria has control over all oil companies through the Nigerian national petroleum corporation (NNPC). NNPC has a share of 55 percent on Nigeria Agip Oil Company. Agip has two terminals at Brass. The terminals handles treatment, storage and shipment of crude oil. The brass terminal is one of the spots where crude oil is exported in Nigeria.

Many communities and individuals have spoken against the activities of Shell and Agip in their areas of operation. The assumptions hold that the oil companies in Nigeria are massively exploiting their host communities but giving little or nothing in return to the people.

Uwen (2002) says that a closer examination of issues shows that underdevelopment in Rivers State could be linked to Corruption, poor governance (political and corporate), and lack of accountability on the part of Nigerian government, its leaders and statutory agencies. He went further to say, it is simply not enough to declare commitment to CSR objectives or have CSR programmes, rather CSR initiatives should serve as useful means for mitigating the negative effects of the existing relationship among key stakeholders in the Nigeria oil industry, that is the FGN, the oil MNC (Shell and Agip) and the host communities. After all, CSR is really about the management of relationships.

Prior to 1995, Shell’s CSR strategy in Nigeria focused on risk and reputation management. For the purpose of contributing to socio-economic development of Niger Delta communities, Shell adopted the community assistance (CA) approach to development, which emphasized corporate philanthropy. It was essentially about giving things to the communities. (Ogwuezi 2002).

With its CA approach to development, Shell placed emphasis on “gift” rather than support for sustainable development programmes. This focused on what Shell felt the communities lacked or on Shell’s perception of poverty within the communities. Ite (2002) posits that as a result, the communities became perceived as helpless victims of circumstances rather than capable actors in the development process. Gradually, the dependence culture became established and the communities saw the development of infrastructure provided as charity and as a form of rent for Shell’s use (and abuse) of the environment and resources. In effect, the community groups were the passive recipients of Shell’s donations. This is typical of the top-down approach to development (development not conceived with the full involvement of the people) which has been found to be largely an ineffective approach to poverty alleviation.

Statement of the Problem

Rivers State is one of the major oil producing state in Nigeria. This makes the state a significant contributor to the country’s national income. However, her contribution to the national economy has not translated to corresponding physical and human development in the state, despite the fact that the people and their communities suffer and make lot of compromises for the land to produce crude oil that Nigeria depends upon for significant percentage of the national income. Often the people of the oil rich state complaint of deprivation, marginalization, environmental pollution and general neglect by both the government and the multinational oil companies involved in the exploration and exploitation in their communities.

Armanyie (2001) posits that this area that contributes the largest chunk of the country’s revenue has remained the most neglected and impoverish in Nigeria. Inspite of the huge contribution of the region to the nation’s economy, the inhabitants continue to live in abject poverty, suffers both ecological and environmental degradation, and remain grossly underdeveloped, lacking the most basic amenities that make life worth of living such as good drinkable water, good roads, electricity, manpower development, good health service etc.

The continued neglect and low development level of physical and human resources especially the lack of basic social amenities in almost all the oil producing communities have led to series of violent and conflicts between the indigenes of the state and the multination companies. To ensure rapid development of the oil producing communities and to make the multinational companies partake meaningfully in the development process of their host communities, the principle of Corporate Social Responsibility (CSR) was introduced. This principle of CSR imposes some responsibilities that would make the companies return some of their profits to the communities in term of physical and human development. This study therefore examines the practice of CSR by the SPDC and NAOC as it affect sustainable community development in oil producing communities of Rivers State, Nigeria.

 

Purpose of the Study

The general purpose of this study is to examine the corporate social responsibilities of Shell petroleum development company (SPDC) and Nigeria Agip Oil Company (NAOC) for sustainable community development of the host communities in Rivers State. Specifically the study aims:

1. to examine the corporate social responsibilities of SPDC and NAOC for sustainable development in its host communities in Rivers State.
2. to examine the extent to which corporate social responsibilities assist in the resolution of conflicts between the oil companies and their host communities in Rivers State.
3. to examine the extent to which corporate social responsibilities of SPDC and NAOC are promoting sustainable community development in their host communities in Rivers State.
4. to examine the extent to which corporate social responsibilities of SPDC and NAOC help to mitigate environmental degradation of oil producing communities in Rivers state.
5. to examine the extent to which the corporate social responsibilities of SPDC and NAOC have influenced the socio-economic life of the host communities in Rivers state.

 

Significance of the Study

This study is of great significance to the oil bearing communities, as its findings and recommendations will strengthen community development programmes of oil companies in meeting the developmental priorities of the host communities.

The findings of the study is also important to the government, since it will contribute to the body of knowledge on the critical issue of conflict resolutions between oil companies (Shell and Agip) and the host communities especially at this time the conflict has assumed greater dimension including hostage taking, and government is highly in need of enacting policies and recommendations that will bring about peaceful resolution of the issue.

The findings of the study is significant in that it will make the multinational oil companies identify corporate social responsibility practice for sustainable community development and give recommendations on the way forward to establish cordial relationship between them and their host communities, since CSR is more of management of relationship.

The findings of the study will help to identify those policy reforms including laws that excluded communities from participating in their developmental processes and make necessary recommendation that will correct these policy measures.

Finally, the findings of the study will add to the body of knowledge to community Development in Adult Education, since it deals on corporate social responsibility in relation to sustainable community development. Such knowledge will be very useful to guide future research on similar issues in the research area.

Research Questions

The following research questions were posed to guide the study.

1. What are the corporate social responsibilities of SPDC and NAOC for sustainable community development in their host communities in Rivers state?
2. To what extent do the corporate social responsibility of SPDC and NAOC help in resolving conflicts between the oil companies and their host communities in Rivers State?
3. To what extent have the corporate social responsibilities of SPDC and NAOC helped to promote sustainable community development in Rivers State?
4. To what extent have the corporate social responsibilities of SPDC and NAOC helped to mitigate environmental degradation in the host communities in Rivers state?
5. To what extent have corporate social responsibilities of SPDC and NAOC influenced the socio economic life of the host communities in Rivers state?

Hypothesis of the Study

The following hypotheses which were tested at 0.05 level of significance guide this study;

1. There is no significant difference in the mean ratings of respondents on the corporate social responsibilities of SPDC and NAOC for sustainable community development in their host communities in Rivers state.
2. There is no significant difference in the mean ratings of respondents on the corporate social responsibilities of SPDC and NAOC in resolving conflict between the oil company and the host communities in Rivers state.
3. There is no significant difference in mean ratings of respondents on the corporate social responsibilities of SPDC and NAOC in promoting sustainable community development in Rivers state.

Scope of the Studies

This study covers the activities of multinational oil companies in Rivers state. With particular interest on the activities of Shell Petroleum Development Company and Nigeria Agip Oil Company in their area of operations in Rivers State. The operations of SPDC and NAOC were investigated in terms of their contributions to sustainable community development oftheir host communities in Rivers stateDownload Full Material-N5000