The Peter Poser is the CEO of the company and Jorum Loyola is the Chairman. This is totally different organizational structure than other competing giants such as Exxon and Total, those companies are having Coo’s with autocratic powers. (Grant, 2002) This makes Shell more difficult to restructure the organization. However due to unsatisfactory uncial performance and increased pressure from the share holders over the rate of return of Shell during sass forced CM to take more drastic measures which puts more emphasis on short term return than the long term development of the company.
Changing business environment Even though shell is one of the largest multinational company of its kind, it faced strong and risky challenges during the past few decades. These challenges are not only from the other competitors but also from the governments and other national and international organizations advocating for different right and responsibilities. Here will look at some of such events Shell faced in past few decades. * April 1995 Shell decided to sink its aged oil storage buoy named Brent Spar in the Atlantic.However as a surprise for the executives and policy makers on April the same year, environmental activists from Green Peace and occupied the buoy for consecutive three weeks. Green peace advocated that the sinking of the old Brent Spar buoy will be the major environmental disaster which destroys the surrounding echo system. The following media coverage lead public stands against the Shell and consumer boycott especially in Germany which lead to the huge decline n the retail sales at the outlets.
Due to this public stance, government officials from respective countries asked Shell to postpone sinking of the buoy.On 20th June Shell abandoned its initial plan and announced it will consider alternative methods to deal with the Brent Spar. * In 2004 Shell was fined by EYE million by the Financial Services Authority , following the overstatement of its oil reserves. Due to this turmoil chairman of the group Philip Watts resigned. And in 2007 law suit against the Shell was concluded and resulted a payment of $450 million to stake holders. * On January 15th f 1 999 Shell super tanker in Argentina collided with another tanker.This resulting huge oil spill polluted the lake with its drinkable water. Due to this accident Shell was criticized heavily about its environment and safety * In 1 996 human rights activist groups suspected Shell for measures.
Alleged human rights violations in Nigeria. Those groups accused Shell for aiding and abetting of hanging of Ken Sara-Way and eight other leaders of human rights activist group. However Shell denied all the allegations but agreed to pay over $15. 5 million in 2009 following a lawsuit against Shell and dead of its Nigerian operation Brian Anderson. Wisped) Handling of communications in Shell Shell acted upon the past events and handled most of the public reactions following major criticisms against the company. Shell’s review and dialogue processes that started in 1996 have later been continued and strengthened by establishing better mechanisms to facilitate communication between the company and the external world (Tangent, 2003). Following a Sara Way and Brent Spa incident Shell started consultative process and review of business strategies. These two incidents had a great impact on the scope of these structuring and new policies.
These reviews was conducted to understand the public expectations and reputation of the company. Despite the great effort from the company, public criticized Shell projects started in 1 995 in Columbia and Peru and this lead to withdrawal of Shell from both these projects in 1998. Shell published its famous report “Profits and Principles – does there have to be a choice? ” in 1998 outlining the companies policy towards integrating social responsibility into its overall business strategy.
Again in 1999 Shell published its second report “People, planet and profits – an act Of commitment’.In this report Shell emphasized more on sustainable development, and Human rights. In his personal introduction, the new Chairman of the Committee of Managing Directors, Mark Moody-Stuart, emphatically reaffirmed the new visions: ‘We have to show..
. That our activities…
Create wealth that can benefit society as a whole… And work to ensure that our actions meet the needs of the present without compromising the ability of future generations to meet their own needs. Far from being a drag on our performance, such a commitment helps us understand the world better and improves our chances of success..
.Our businesses can best thrive by enthusiastically embracing this agenda… (We) are totally committed to a business strategy that generates profits while contributing to the well-being of the planet and its people. We see no alternative’.
(Tangent, 2003) Due to the accusations of human rights violations Company formed a twelve member Social Accountability Committee in 1997. The committee was responsible to review the policies and conduct of Shell companies on the grounds of human rights and social responsibility.In light of these reviews committee published human rights guide for Shell managers “Business and Human rights.
A Management Primer”. This guide gives balanced introduction to the human rights issues affecting its businesses; however it does not give guidance how to handle human right issues in the normal business. This guidance paper is actually aimed at giving guidance for the managers how to handle accusations of company’s non-compliance of human rights issues in different jurisdictions at the same time giving some degree of leeway to the corresponding managers of the operating companies.Shell claims that it does not collaborate with companies that fail to meet their standards on environment, human rights or child labor. According to the company more than 95 contracts were cancelled during 1997 because contractors did not meet the company’s standards.
(Tangent, 2003). This clearly gives the impression for the stake holders that company is strengthening its compliance with the grievances of the human rights actions groups and this has some degree of positive influence towards the reputation of the company.According to the Royal Dutch Shell – Sustainability Integration Case Study, Shell will consult with international and local stakeholders before making investment decisions and has also committed to provide full and elevate information to legitimately interested parties on its activities and Shell produce country or project specific environmental and social performance reports to enhance local stakeholder engagement.Stakeholder engagement is critical and Social Performance Management unit in the corporate centre provides expertise and support to projects and facilities in this area. In 2006, Shell selected Microsoft to provide Software powered unified communications to more than 100,000 users worldwide.
Shell started a pilot project in 2007 comprising 800 users of Microsoft Office Communications Server 2007. This project is aimed to increase efficiency and increase collaboration between the partners with reducing cost and business travels. (Systems, 2007).John Krebs, the Dutch Shell Group’s IT architect stated relating to this programs ” our primary aim in deploying Office Communications Server 2007 is to give greater flexibility to our key employees and add value to what they do the rough a better working environment”. Conclusion Royal Dutch Shell Pl is one of the largest companies in its kind in the world in terms of its revenue and return for shareholders which were founded in 1907.
The company was originated by the merger of two separate companies Royal Dutch and Shell Trading and Transport giving splitting stakes of 60:40 respectively.Shell has more than 90,000 employees and annual revenue reaching $470 billion at the end of 2011. Company was controlled by the Committee of Managing Directors consisting of 5 members, three from Royal Dutch and two from Shell Trading and Transport and they do not have autocratic powers unlike other oil majors which make it vulnerable and difficult to restructure. However events in 1 9905 make company to take drastic measures and restructure due to financial constraints. When company decided to sink its old Brent Spar buoy in 1995, Green Peace took occupied it for 3 week and lead to boycott following media reports.