CSR and Oil Companies: A comparative and contextual analysis of stakeholder and institutional influence on companies’ Corporate Social Responsibility

Abstract

Corporate social responsibility (CSR) literature has not paid much attention to what, how and under what conditions stakeholders may influence a company’s CSR strategy. And most CSR literature takes the comparison on western companies and countries that despite some differences have a much more similar institutional system compared to countries in Africa or Asia. The thesis addresses the gap by providing an investigation of stakeholder influence in a company’s CSR strategy with a national context and a comparative focus on the International Western oil company Shell and the Asian state owned oil company PetroChina. The aim of the thesis is to highlight aspects of stakeholder engagement, by investigating the role that stakeholders and their national context have played in shaping Shell and PetroChina’s CSR strategies and practices in Nigeria. The thesis generates insights about the scope and limitations of stakeholder participation imposed by national institutional context with focus on domestic regulations, domestic civil society and institutional investors. The hypothesis of the thesis is PetroChina and Shell’s CSR strategies in Nigeria differ due to their respective domestic regulations, domestic civil society and institutional investors. This is answered through the research questions: How is the stakeholders’ influence reflected in PetroChina and Shell’s CSR strategies? And How is the domestic setting of Shell and PetroChina reflected in their stakeholders actions and their CSR strategy? The questions and hypothesis are sought answered through empirical data and a theoretical framework of institutional theory by Douglas North, Matten and Moons implicit and explicit CSR framework and Porter and Kramer’s framework of strategic CSR. Not only does the research confirm that context has major influence on how Shell and PetroChina’s CSR strategies have become so different and, not surprisingly, why the stakeholders are affected by the national institutional systems. Furthermore, through research of the CSR influences it has been interesting to see which company is actually most true to its business operations. If solely referring to core operations of Shell and PetroChina and referring to the framework of Porter and Kramer then PetroChina has the most strategic CSR strategy. Shell is influenced by all their stakeholders and has a responsive and a hybrid of an implicit and explicit CSR approach. Whereas PetroChina is only influenced by the Chinese state, which makes the regulation, enforce it, control the civil society and is close to being PetroChina’s sole investor. PetroChina has a strategic and explicit CSR approach, though not as explicit as Shell.