5.6 Natural Environment:
Ecological and geographical factors that control the operations of the business make the natural environment. These comprise of weather and climatic conditions, availability of natural resources, location, etc. The nature of the natural environment deeply affect’s the business. Setting up manufacturing units close to sources of input is always considered better. Furthermore, government’s regulations to sustain ecological equilibrium, protection of natural resources among other things add extra responsibility on the company.
According to The Guardian 2011, Shell is building the first floating natural gas platform, through which exploration of vast new areas of sea for gas will be possible. The huge platform will be the biggest offshore drilling formation in the world. It is expected to be ready by 2017, taking approximately five years to build.
This will ensure exploration of gas in areas too remote before and now that existing stores of onshore and near the shore oil and gas have already been used up, companies all over are trying to find the best alternative ways to discover offshore resources. Progress in technology and melting ice are also permitting oil and gas exploration in sensitive regions of the world, such as theArctic.
Shell’s floating offshore structure can only be used in large fields due to the vastness of its size and will be moored out to sea of the coast ofAustraliaat the Prelude Gas field. The Guardian, (2011)
5.7 Social Responsibility:
The responsibility of business organizations to adopt such policies and plans that are beneficial to the society in whole can be described as the social responsibility of businesses.
The obligations of a business is not only limited to the owners of the business but it also encompasses the expectations of other parties like the stakeholders, the workers, the consumers, the community, the government and the general public. All these parties are directly or indirectly related to the business and the business environment.
Let us take a look at how Shell hold’s it’s’ obligations towards all these groups:
Obligations towards Employees: For a company as large as Shell, managing employees can be a huge task. But Shell understands the employees’ rights, though the practical challenge lies in to translating these into operational practices where necessary. Shell has developed financial, health and safety policies for its employees. Further, responsibilities of Shell include equal opportunity employment and non- discrimination in employment practices and guarantees of not using slave labor, forced labor or child labor, and that a healthy and safe environment is provided.
Obligations towards Community: We have already stated that Shell takes its obligations to the community very seriously and is involved in a number of community services in the region ofNigeria. It must be noted however, that since it is an oil and gas company, Shell comes under constant attacks for harming and endangering the environment and community.
Obligations towards Government: Shell believes in working with the government of each and every country that it operates in and adhering to the local government policies and rules. Shell has particularly worked closely with the Nigerian government and has contributed to the government in order to promote various activities and growth there.
Obligations towards Shareholders: Shell’s strategic plan is to build the foundations for profitable growth for shareholders. This comprises improving long term performances and bringing a new wave of production growth.
Obligations towards Customers: Shell aim’s to win and maintain customers by developing and providing products and services which offer value in terms of price, safety, quality and environmental impact.
Due to the importance of social responsibility towards all these groups, companies should provide details of their social activities in their annual report. A few large organizations voluntarily report their social performances in their annual report and Shell is one of these. These reports give an eco-friendly and conscious image to the companies. Annual Report, Shell (2011)