CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Companies has recently gave priority to their
interactions with the people constituting the environment they operates
in and draws resources from, to foster mutual understanding, trust,
and support between the company and the host communities (Meyers, 2005).
This study is examining the role that these activities involved in
community relations on the corporate image of Shell petroleum Plc, Port
Harcourt. Corporate image" was once an advertising jargon but is today
a common phrase referring to a company's reputation. The "image" is
what the public is supposed to see when the corporation is mentioned.
The ordinary man and woman on the street usually have a wry view of
community relations, advertising, hype, hoopla, and therefore also of
corporate image—and this often for good reasons (Brady, 2005). But a
good corporate image is a genuine asset; it translates into dollars at
the counter and higher stock valuation.
The concept is usually associated with large
corporations, but small businesses also have a corporate image even if
neither their owners nor customers think of it that way. In the absence
of active efforts, corporate image "simply happens": it is how a
company is perceived (Johnson, 2002). Management, however, may actively
attempt to shape the image by communications, brand selection and
promotion, use of symbols, and by publicizing its actions. Corporations
trying to shape their image are analogous to individuals who will
dress appropriately, cultivate courteous manners, and choose their words
carefully in order to come across competent, likeable, and reliable.
In the personal as in the corporate case, the image should match
reality (Hayward, 2005). When it does not, the consequence will be the
opposite of the one intended. Community relations is no longer an
afterthought or corporate window-dressing, community relations, as more
chief executives are acknowledging, is now a serious, strategic aspect
of business for Nigerian companies, a fundamental ingredient for the
health of the enterprise. Competitive business and social pressures are
forcing a redefinition of the relationship between company and
community. When a company makes a commitment to the community part of
its core business strategy, it not only helps attract and retain top
employees, but it also positions itself positively among customers and,
increasingly, improves its position in the market. Positive, proactive
connections to the community can translate into a boost to the bottom
line. Leading-edge companies are now seeing that to succeed in a global
economy, the corporation has to be more than a preferred shareholder.
The broad array of new stakeholders that the
enterprise must embrace require a new perspective on corporate
governance and behavior (Brady, 2005). Consequently, in addition to
becoming the investment of choice, a company must become the supplier
of choice, the employer of choice. Several community relations
strategies by oil companies have failed to reduce the incidence of
violent conflict between the host communities and oil companies in the
Niger Delta, Nigeria. Shell is Nigeria’s oldest energy company, and has
a long term and continuing commitment to the country, its people and
the economy. The largest contribution by Shell companies in Nigeria is
through the taxes and royalties they pay as well as its commitment to
support and finance community development initiatives in the host
communities.
1.2 STATEMENT OF THE PROBLEM
Given the pressures that accompany the growing parity in
the price of goods and services, companies will achieve an increasing
competitive advantage through community relations and social
responsibility as an approach of building corporate image. This makes
strategic social investment all the more important for global
corporations as they seek to establish a consistent image and market
presence across the world. However, the researcher is examining the
role community relations have played on the corporate image of Shell
petroleum Plc, Port Harcourt.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
- To examine the role of community relations on corporate image building at Shell Petroleum Plc Port Harcourt.
- To determine the process of effective community relations.
- To identify the factors that determine the corporate image of an organization.
1.4 RESEARCH QUESTIONS
- What is the role of community relations on corporate image building at Shell Petroleum Plc Port Harcourt?
- What is the process of effective community relations?
- What are the factors that determine the corporate image of an organization?
1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
- The outcome of this study will be a useful guide for the
management of Shell Petroleum Plc Port Harcourt in reorganizing and
restructuring their community relations programmes to meet the need of
the host communities to enhance cooperation and mutual understanding.
- This research will also serve as a resource base to other
scholars and researchers interested in carrying out further research in
this field subsequently, if applied will go to an extent to provide
new explanation to the topic.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study on the role of community relations on corporate image
building at Shell Petroleum Plc Port Harcourt will cover all the
community relations strategies that has been used by shell to
facilitate cooperation and mutual understanding between the company and
the host communities.
LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to
impede the efficiency of the researcher in sourcing for the relevant
materials, literature or information and in the process of data
collection (internet, questionnaire and interview).
Time constraint- The researcher will
simultaneously engage in this study with other academic work. This
consequently will cut down on the time devoted for the research work.
REFERENCES
Meyers B.Y. (2005): Analysis: Corporate Case Study—Schering-Plough Looks to Remedy An Ailing Image." PR Week. 12 December 2005.
Brady, Diane, Michael Arndt and Amy Barrett. "When Your
Name is Mud, Advertise; Companies in Crisis Used to Lie Low. The New
Response to Bad Press is Positive Spin." Business Week. 4 July 2005.
Johnson L.O. (2002)"Explaining the Enron bankruptcy." CNN.com/U.S. Available from http://archives.cnn.com/2002/US/01/12/enron.qanda.focus/. 13 January 2002.
Hayward, Roger. "Insight: Corporate Reputation" Accountancy Age. 30 June 2005.