Journal of Business Ethics

, Volume 39, Issue 3, pp 297–318 | Cite as

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

  • David Wheeler
  • Heike Fabig
  • Richard Boele


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.

corporate social responsibility Shell stakeholder theory sustainability 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Achebe, E.: 1999, ‘Letter to the Editor', The Guardian (18 September 1999).Google Scholar
  2. Achebe, E.: 2000, Remarks to Academy of Management ONE Symposium (Toronto, August 2000).Google Scholar
  3. Arnold, M.: 2000, ‘Thriving After the Meteor: Sustainability, Transparency and Globalisation', Proc WRI BELL Conference, Nashville, Tennessee, July 2000. Available at bell2000.html (accessed 12 March 2001).Google Scholar
  4. BP: 2001, Commentaries of Mayor Benjamin P Nageak of North Slope and ERM Social Strategies. Available at index_comm.htm (accessed 12 March 2001).Google Scholar
  5. Boele, R.: 1995, OGONI-Report of the UNPO Mission to Investigate the Situation of the Ogoni of Nigeria, February 17–26, 1995. Unrepresented Nations and Peoples Organisation (UNPO), The Hague, Netherlands.Google Scholar
  6. Boele, R.: 2000, ‘Shell and The Ogoni of Nigeria-Ecological and Corporate Rationality Clash', Paper presented at the International Political Studies Association 18th World Congress. Quebec City, August 2000.Google Scholar
  7. Boele, R., H. Fabig and D. Wheeler: 2001a, ‘Shell, Nigeria and the Ogoni. A Study in Unsustainable Development. I: The Story of Shell, Nigeria and the Ogoni People-Economy, Environment and Relationships: Conflict and Prospects for Resolution', Sustainable Development 9(2), 74–86.Google Scholar
  8. Boele, R., H. Fabig and D. Wheeler: 2001b, ‘Shell, Nigeria and the Ogoni, A Study in Unsustainable Development. II: Corporate Social Responsibility and Stakeholder Management Versus a Rights-Based Approach to Sustainable Development', Sustainable Development 9(3), 121–135.Google Scholar
  9. Boutilier, R. G. and A. C. Svendsen: 2001, ‘From Conflict to Collaboration: Stakeholder Bridging and Bonding in Clayoquot Sound', Manuscript submitted to the Journal of Applied Behavioral Science.Google Scholar
  10. Brooks, G.: 1994, ‘Slick Alliance: Shell's Nigerian Fields Produce Few Benefits for Region's Villagers; Despite Huge Oil Revenues, Firm and Government Neglect the Impoverished; How Troops Handle Protest', The Wall Street Journal (6 May 1994).Google Scholar
  11. Carroll, A. B.: 1979, ‘A Three-Dimensional Conceptual Model of Corporate Social Performance', Academy of Management Review 4, 497–505.Google Scholar
  12. Carroll, A. B.: 1999, ‘Corporate Social Responsibility. Evolution of a Definitional Construct', Business and Society 38(3), 268–295.Google Scholar
  13. Cayford, S.: 1996, ‘The Ogoni Uprising: Oil, Human Rights and a Democratic Alternative in Nigeria', Africa Today 43(2), 183–197.Google Scholar
  14. Charkham, J.: 1995, Keeping Good Company.A Study of Corporate Governance in Five Countries (Pitman, London).Google Scholar
  15. Christian Aid: 2001, The Scorched Earth.Oil and War in Sudan (Christian Aid, London). Available at sudanoil.htm (accessed 18 March 2001).Google Scholar
  16. Cohen, D. and L. Prusak: 2000, In Good Company.How Social Capital Makes Organizations Work (Harvard Business School Press, Harvard, MA).Google Scholar
  17. Collins, J. C. and J. I. Porras: 1995, Built to Last.Successful Habits of Visionary Companies (Century, Random House, London).Google Scholar
  18. Committee for Economic Development (CED): 1971, Social Responsibilities of Business Corporations (CED, New York). Cited by Carroll: 1999.Google Scholar
  19. Cragg, W.: 2002, ‘Stakeholders, Corporations and the Public Good: Stakeholder Theory and the Ethics Case for Business Ethics', The Business Ethics Quarterly 12(1).Google Scholar
  20. Davis, K.: 1960, ‘Can Business Afford to Ignore Social Responsibilities?', California Management Review 2, 70–76. Cited by Carroll: 1999.Google Scholar
  21. Donaldson, T. and L. E. Preston: 1995, ‘The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications', Academy of Management Review 20, 65–91.Google Scholar
  22. Drucker, P.: 1982, ‘The New Meaning of Corporate Social Responsibility', California Management Review 26, 53–63. Cited by Carroll: 1999.Google Scholar
  23. Duodu, C.: 1996, ‘Shell Admits Importing Guns For the Nigerian Police', The Observer (28 January 1996).Google Scholar
  24. Elkington, J.: 1998, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (New Society, Vancouver, BC).Google Scholar
  25. Environics: 1999, Millenium Poll on Corporate Social Responsibility (Environics International, Toronto, Ont).Google Scholar
  26. Essential Action: 1999, Action Alert: Tell Shell to SpendIt's Money Cleaning Its Mess in Nigeria, Not It's Image! 2 April 1999. Available at http:// (accessed 21 November 1999).Google Scholar
  27. Freeman, R. E.: 1984, Strategic Management: A Stakeholder Approach (Basic Books, New York, NY).Google Scholar
  28. Freeman, R. E.: 2000, ‘Business Ethics at the Millenium', Business Ethics Quarterly 10(1), 169–180.Google Scholar
  29. Friends of the Earth: 1998, 'Rio Tinto Dumps on Environment, Ducks Taxes', Press Release. Available at pressrel/ (accessed 18 March 2001).Google Scholar
  30. Goodpaster, K.: 1998, ‘Business Ethics and Stakeholder Analysis', in M. B. E. Clarkson (ed.), The Corporation and Its Stakeholders: Classic and Contemporary Readings (University of Toronto Press, Toronto, ON).Google Scholar
  31. Hamel, G. and C. K. Prahalad: 1991, ‘Corporate Imagination and Expeditionary Marketing', Harvard Business Review 69(4), 81–92.Google Scholar
  32. Hart, S. L.: 1997, ‘Beyond Greening: Strategies For a Sustainable World', Harvard Business Review 75(1), 66–76. Reproduced in Harvard Business Review on Corporate Strategy (Harvard Business School Press, Boston, MA).Google Scholar
  33. Hart, S. L. and M. B. Milstein: 1999, ‘Global Sustainability and the Creative Destruction of Industries', Sloan Management Review 41(1), 23–33.Google Scholar
  34. Hawken, P.: 1993, The Ecology of Commerce.A Declaration of Sustainability (Harper Collins, New York, NY).Google Scholar
  35. Hawken, P., A. B. Lovins and H. L. Lovins: 1999, Natural Capitalism.The Next Industrial Revolution (Earthscan, London).Google Scholar
  36. Human Rights Watch: 1995, 'The Ogoni Crisis: A Case Study of Military Repression in Southeastern Nigeria'. Available from (accessed 18 March 2001).Google Scholar
  37. Hutton, W.: 1996, The State We're In (Vintage, London).Google Scholar
  38. Husted, B. W.: 2000, ‘A Contemporary Theory of Corporate Social Performance', Business and Society 39(1), 24–48.Google Scholar
  39. Imomah, E. V.: 2001, 'SPDC's Submission at the Human Rights Violation Investigation Commission, 23 January 2001'. Available at (accessed 09 March 2001).Google Scholar
  40. ICEM: 1999, 'International Federation of Chemical, Energy, Mine and General Workers' Unions Website'. Available at riotinto (accessed 09 March 2001).Google Scholar
  41. Johnson, H.: 1971, Business In Contemporary Society: Framework and Issues (Wadsworth, Belmont, CA). Cited by Carroll: 1999.Google Scholar
  42. Kay, J.: 1995, Foundations of Corporate Success: How Business Strategies Add Value (Oxford University Press, Oxford).Google Scholar
  43. Kotter, J. P. and J. L. Heskett: 1992, Corporate Culture and Performance (The Free Press, New York, NY).Google Scholar
  44. Lawrence, A.: 1999a, Shell and Its Stakeholders.Shell in Nigeria. Available at shell/index.htm (accessed 18 March 2001).Google Scholar
  45. Lawrence, A.: 1999b, Shell and Its Stakeholders.The Transformation of Shell, 1994–1999. Available at (accessed 18 March 2001).Google Scholar
  46. Lewis, P.: 1996, ‘Blood and Oil: A Special Report. After Nigeria Represses, Shell Defends Its Record', The New York Times (13 February 1996).Google Scholar
  47. Livesey, S. M.: 2001, ‘Eco-Identity as Discursive Struggle: Royal Dutch/ Shell, Brent Spar, and Nigeria', The Journal of Business Communication 38(1), 58–91.Google Scholar
  48. May, P. H., V. da Vinha and N. Zaidenweber: 1999, ‘Royal Dutch/Shell', in M. Hastings (ed.), Corporate Incentives and Environmental Decision Making.A Case Studies and Workshop Report (Houston Advanced Research Center, Houston, Texas).Google Scholar
  49. McKague, K., D. van der Veldt and D. Wheeler: 2001, Growing a Sustainable Energy Company.Suncor's Venture into Alternative and Renewable Energy (Schulich School of Business, York University, Toronto, ON).Google Scholar
  50. Milarepa Fund and Project Underground: 2000, 'Raiding the Treasure House: Oil and Mineral Extraction in China's Colonization of Tibet'. Available at reports/tibet2000.html (accessed 9 March 2001).Google Scholar
  51. Moody-Stuart, M., J. L. Greeno and J. Shopley: 1998, ‘A Conversation. Profits With Principles-The Transformation of Royal Dutch/Shell', Prism Q4/98, 21–33.Google Scholar
  52. Moody-Stuart, M.: 1999, The Values of Sustainable Business In the Next Century. Available at,5831,,00.html (accessed 18 March 2001).Google Scholar
  53. MOSOP International Secretariat: 1998, 'Press Release-3rd Anniversary of the Murder of Ken Saro-Wiwa and 8 Others: MOSOP Tells Shell: Clean up by 2000 or Clear Out', SHELLNIGERIA-ACTION discussion list. Available at ia-action, (accessed 10 November, 1998).Google Scholar
  54. MOSOP International Secretariat: 1999, 'Update, Addresses and Developments', 9 August 1999, personal correspondence to Heike Fabig.Google Scholar
  55. Mulligan, P.: 1999, ‘Blueprint or Greenwash? RTZ in Madagascar', IDS Bulletin 30(3), 50–57.Google Scholar
  56. Nahapiet, J. and S. Ghoshal: 1998, ‘Social Capital, Intellectual Capital, and the Organizational Advantage', Academy of Management Review 23, 242–266.Google Scholar
  57. Niger Delta Environmental Survey: 1995, ‘The Niger Delta Environmental Survey, Background and Mission', Briefing Note 1 (Steering Committee, Niger Delta Environmental Survey, Lagos).Google Scholar
  58. O'Sullivan, T.: 1995, ‘Shell Needs More Than Slick Solution', Marketing Week ()24 November 1995, 22–23.Google Scholar
  59. Paine, L. S.: 2000, ‘Does Ethics Pay?', Business Ethics Quarterly 10(1), 319–330.Google Scholar
  60. Plender, J.: 1997,A Stake in the Future: The Stakeholding Solution (Nicholas Brealey, London).Google Scholar
  61. Project Underground: 2000, 'Pages on Rio Tinto'. Available at news/riotinto.000727.html (accessed 9 March 2001).Google Scholar
  62. Putnam, R. D.: 2000, Bowling Alone: The Collapse and Revival of American Community (Simon & Schuster, New York).Google Scholar
  63. Reich, R. B.: 2001, The Future of Success (Alfred A Knopf, New York).Google Scholar
  64. Rio Tinto: 2001a, Home page. Available at (accessed 18 March 2001).Google Scholar
  65. Rio Tinto: 2001b, Strategy. Available at (accessed 18 March 2001).Google Scholar
  66. Robinson, D.: 1996, Ogoni, The Struggle Continues (World Council of Churches, Geneva).Google Scholar
  67. Roddick,, A. and G. Roddick: 1999, ‘Letter to the Editor', The Guardian (18 September 1999).Google Scholar
  68. Roman, R., S. Hayibor and B. Agle: 1999, ‘The Relationship Between Social and Financial Performance', Business and Society 38(1), 109–125.Google Scholar
  69. Rowall, A. and A. Goodal: 1994, Shell-Shocked.The Environmental and Social Costs of Living With Shell in Nigeria (Greenpeace International, Amsterdam).Google Scholar
  70. Schmidheiny, S. and The Business Council on Sustainable Development: 1992, Changing Course (MIT Press, Cambridge, MA).Google Scholar
  71. Sciarelli, S.: 1999, ‘Corporate Ethics and the Entrepreneurial Theory of "Social Success"', Business Ethics Quarterly 9(4), 639–649.Google Scholar
  72. Sethi, S. P.: 1975, ‘Dimensions of Corporate Social Performance: An Analytic Framework', California Management Review 17, 58–64. Cited in Carroll: 1999.Google Scholar
  73. Sharma, S.: 2001, 'Stakeholder Integration and Corporate Sustainability Strategy: A Dynamic Capability Perspective', Paper presented at The Woodlands Conference, January 2001 (Houston Advanced Research Center, Houston, Texas).Google Scholar
  74. Sharma, S. and H. Vredenburg: 1998, ‘Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Organizational Capabilities', Strategic Management Journal 19(8), 729–753.Google Scholar
  75. Sharp Paine, L. and M. Moldoveanu: 1999, Royal Dutch Shell in Transition (A), Harvard Business School case study N9–300–039 (Harvard Business School Publishing, Boston, MA).Google Scholar
  76. Shell International: 1995a, Nigeria Brief, The Ogoni Issue (Shell International, London).Google Scholar
  77. Shell International: 1995b, Nigeria Brief, The Environment (Shell International, London).Google Scholar
  78. Shell International: 1996a, 'Shell Nigeria Offers Plan For Ogoni', News Release 8 May 1996 (Shell International, London).Google Scholar
  79. Shell International: 1996b, 'Shell Helps Ogoni Hospital', News Release 31 October 1996 (Shell International, London).Google Scholar
  80. Shell International: 1997, Statement of General Business Principles, Royal Dutch/Shell Group of Companies, revised edition [first edition published in 1976], (Shell International, London).Google Scholar
  81. Shell International: 1998, Profits and Principles-Does There Have To Be A Choice? The Shell Report 1998 (Shell International, London).Google Scholar
  82. Shell International: 1999, People, Planet and Profits, An Act of Commitment, The Shell Report 1999 (Shell International, London).Google Scholar
  83. Shrivastava, P.: 1987, Bhopal: Anatomy of a Crisis (Ballinger/HarperCollins, New York, NY).Google Scholar
  84. SPDC (Shell Nigeria): 1995, Nigeria Brief: Community Development (Shell Nigeria, Lagos).Google Scholar
  85. SPDC (Shell Nigeria): 1998a, SPDC: Factfile. Available at Page=factfile (accessed 16 November 1999).Google Scholar
  86. SPDC (Shell Nigeria): 1998b, The Community. Available at Page=community (accessed 16 November 1999).Google Scholar
  87. SPDC (Shell Nigeria): 1998c, Information Resource-The Environment. Available from www.shellnigeria. com/frame.asp?Page=EnvrionmentIssue (accessed 22 November 1999).Google Scholar
  88. SPDC (Shell Nigeria): 2000, People and the Environment. Annual Report, April 2000 (Shell Nigeria, Lagos).Google Scholar
  89. SPDC (Shell Nigeria): 2001, 'The Ogoni Issue Brief '. Available at (accessed 09 March 2001).Google Scholar
  90. Svendsen, A.: 1998, The Stakeholder Strategy.Profiting from Collaborative Business Relationships (Berrett-Koehler, San Francisco).Google Scholar
  91. Taylor, J. K.: 2000, 'Address to the IIEP Ethics in the New Millenium Conference', Ottawa, September 2000. Available at sustainability (accessed 09 March 2001).Google Scholar
  92. Vidal, J.: 1995, ‘Nigerian Troops "Killed and Tortured" Tribe which Opposed Shell Operation', The Guardian (14 January 1995).Google Scholar
  93. Vidal, J.: 1999a, ‘Eco Soundings', The Guardian (3 November 1999).Google Scholar
  94. Vidal, J.: 1999b, ‘Oil Wealth Buys Health in Country Within a Country', The Guardian (16 September 1999).Google Scholar
  95. Waddock, S. A. and S. B. Graves: 1997, ‘The Corporate Social Performance-Financial Link', Strategic Management Journal 18, 303–319.Google Scholar
  96. Watts, P. and R. Holme: 1999, Meeting Changing Expectations.Corporate Social Responsibility (WBCSD, Geneva). Available from (accessed 18 March 2001).Google Scholar
  97. Wheeler, D. and M. Sillanpää: 1997, The Stakeholder Corporation: A Blueprint for Maximizing Stakeholder Value (Pitman, London).Google Scholar
  98. Wheeler, D. and M. Sillanpää: 1998, ‘Including the Stakeholders: The Business Case', Long Range Planning 31(2), 201–210.Google Scholar
  99. Wheeler, D.: 1995, ‘Blood on British Business Hands', New Statesman and Society (17 November 1995), 14–15.Google Scholar
  100. Wheeler, D., R. Rechtman, H. Fabig and R. Boele: 2001, ‘Shell, Nigeria and the Ogoni. A Study in Unsustainable Development. III: Analysis and Implications of Royal Dutch/Shell Strategy', Sustainable Development 9(4), 177–196.Google Scholar
  101. WBCSD (World Business Council on Sustainable Development): 2001, 'Corporate Social Responsibility'. Available at corp1.htm (accessed 18 March 2001).Google Scholar

Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • David Wheeler
    • 1
  • Heike Fabig
    • 2
  • Richard Boele
    • 3
  1. 1.Erivan K Haub Program in Business and Sustainability, Schulich School of BusinessYork UniversityTorontoCanada
  2. 2.Graduate Research Centre for the Comparative Study of Culture, Development and EnvironmentSussex UniversityU.K
  3. 3.Centre for Stakeholding and Sustainable Enterprise, Kingston Business SchoolKingston UniversityU.K

Personalised recommendations