Stakeholder Engagement: An Effectve Mechanism for Managing Social Risks

Appiah, Edward (2013) Stakeholder Engagement: An Effectve Mechanism for Managing Social Risks. [Dissertation (University of Nottingham only)] (Unpublished)

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Oil extraction operations cannot be separated from environmental and social issues which require engagements with relevant stakeholders who have interests in these issues. This also requires developing trust and mutually beneficial relationship with these stakeholders and fully includes them in the development of solutions to manage the issues. As indicated by Heiskanen et al. (2006) projects with low participation of stakeholders are ineffective and may result in societal unrest, project delays and abandonment of project.

This research examines the operationalisation of stakeholder engagement practices in managing social risks associated with oil production. The research is purely qualitative and used document as the primary source of data. The analysis was based on six years sustainability reports of Royal Dutch Shell Oil Company from 2007 to 2012 to determine stakeholder engagement best practice in the oil industry utilizing the accountability principles of inclusiveness, materiality and responsiveness.

The results show that developing and maintaining mutually beneficial relationships with stakeholders is vital to the management of social risks. Again, the analysis pointed out that more inclusiveness and responsiveness to stakeholders’ material issues facilitate development of trust and mutually beneficial relationship.

Several authors including Freeman (1984) have also highlighted the importance on inclusion of external stakeholders as a basis for stakeholder engagement best practice required even more in the oil industry now with increased activities having negative social and environmental impacts. However, it is evident that some companies use one-way communication strategies which lead to feelings of animosity and distrust by the people or communities in the immediate environments of their operations.

To better understand the degree of stakeholder engagement in the management of social risks, it is advised that this research would be extended to other companies in the oil industry to gain in-depth knowledge on how best relevant stakeholders could be engaged in the management of social risks.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 24 Feb 2014 10:27
Last Modified: 25 Oct 2016 02:55

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