The social responsibility of the Chevron Company
Social Responsibility of Chevron Company
According to the Chevron’s Corporate Fact Sheet, Chevron is stated as the second largest integrated energy company in the United States, behind the Exxon Mobil. Besides, Chevron is also considered to be one of the largest corporations in the world, and one of the six major oil companies, based on market capitalization as of December 31, 2009 (Corporate Fact Sheet, 2010). Headquarter of Chevron is located in San Ramon, California and they are currently conducting their business worldwide in over 180 countries and having their business activities around the world. There are three major operational business areas in which they are engaged Chevron to the crude oil and natural gas industry, including exploration and production, manufacturing, marketing & transportation, and some other businesses such as chemicals manufacturing and sales, geothermal, and power generation. Moreover, they also invest in renewable energy resources advancement and focus on the development of technologies that they believe will help them to improve the chances of finding, developing, and producing more crude oil and natural gas in the future (Chevron, 2010). For the business model of Chevron, it is the long-term business model which mainly focusing on the rise of renewable energy, since the governments from worldwide grants to Chevron and they are one of the companies that have also been subsidized to renewable energy companies.
Chevron has a very long and rich history. The business first started operating on September 10 1879, by a group of explorers and merchants. Through over 130 years, Chevron has been retaining the main purpose of the business that is to provide the energy that drives human progress. However, behind their business strategy, Chevron has always been operating their businesses with the concepts of safe, reliable, efficient, and environmentally. Another word is that Chevron is keeping the light on for their businesses by caring of environment in every aspect of what they are doing, contributing the goodness to the communities where they live and where they operating their businesses, and concerning over the concept of social responsibility by integrating into the business strategy. These are not just only the words in the air because they have stated that they would try very hard to complete every task in the right way at the right time. According to John S. Watson, the Chairman and Chief Executive Officer of Chevron stated, “Today more than ever, global economic prosperity and quality of life depend on supplies of reliable, affordable energy. Developing that energy safely and responsibly is an imperative. It's an honor to lead Chevron into a future that builds upon a tradition of producing energy in a safe, environmentally sound and socially responsible manner” (Chevron, 2010). For Chevron, social responsibility is one of the most important tools that help them produce and deliver energy to human being. According to the management textbook, there are 4 types of social responsibility strategies, which are Obstructive, Defensive, Adaptive, and Proactive. (Naylor J., 2004). However, Chevron follows a proactive social responsibility strategy because they always bring the goodness and concerning not only to their people but also to the society and to those who are interacting with their organization. There are two areas that the company focuses for their social responsibility which are the economic & community development, and the environmental development. Firstly, which is the economic & community area, Chevron focuses on three primary areas for community investments, which are improving to basic human needs, supporting education and training opportunities, and promoting sustainable livelihoods. These are the activities that Chevron believes that it will help and enhance communities to build up a better society and since humans are the most important resources for the wealth of communities; therefore, Chevron has been supporting on the educational aspect more than any others because for Chevron, education is empowering. Secondly, which is the environment area, Chevron develops energy with a commitment that they will also protect the environment at same time. They are managing the environmental stewardship by applying Operational Excellence Management System, which is to process the life-cycle impacts of each project that they are going to invest on. By following these processes together, it can help Chevron to create the improvements in safety, health, the environment, reliability, and efficiency (Chevron, 2010). In recent decades, the concept of social responsibility has turned out to be a vital strategy, which could help the companies to survive in the unstable market environment; in a condition where market’s shift and customers’ preferences become unpredictable, complicated, and complex. However, there are six forces that would help to increase the importance of social responsibility strategy. First of all, the globalisation of markets, consumer preferences’, supplies chains, and financial flows. Some business leaders consider globalization as a revolution for their company, not simply a trend, since it is having hard effects on the economies of all countries and on corporations in most sectors. Secondly, increasing intensity of competition where the global competition and number of competitors are raising everyday. Thirdly, changing in technological advancement, which they have effected to the markets, and contributing to high labour displacement. Modern information technology makes it possible to decentralize decision-making and to introduce more flexible and less hierarchical structures within the organization. Fourthly, changing in demographical, which will not only fail the sustainability of our planet but it also creates unbalancing between jobs and suitably-trained workers, and between present educational systems and the needs of a knowledge and information-based economy. Fifthly, the effects of environmental which caused by pollution. Business leaders are the one who need to be responsible for all of these matters and challenges and they are playing the most important role of the company. Lastly, the changing value systems because each people are having differences of life styles and expectations on the part of employees, customers, and communities as a whole (Palazzi M. & Starcher G., 2006). At least the company can have a back up strategy for the survival and profitability if the worse thing encountered to the company. Social Responsibility became more and more popular especially when there are the forces that I have mentioned earlier. Many of the companies are beware of integrating social responsibility strategy into their businesses from all over the world. It is obvious that organizations are increasingly committing themselves to act responsibly more than the past. Social Responsibility is a concept of integrating the concern over social and environmental into the business operations with the involvement from the stakeholders, shareholders, employees, and customers. Many businesses all over the world, especially in the European countries are attempting to the social responsibility concept by including the social responsibility into their annual report of many major companies. They are now more seriously to take an action by involving and engaging the concept into their businesses because organizations would not survive without the caring about the environments (Mullins L., 2007). However, over the long term, this approach can generate more profits and growth. when the companies have done something back to the society and some of social responsibility activities, definitely when you are bringing back the good things to the society, there will be many of benefits that come back to your organization such as increasing the trust from people who would like to become one of the investors, building of good reputation to the company, receiving the positive attitudes from the people in the societies and communities, helping and protecting the environments, and even saving money of the company itself (Business Link, n.d.).
In conclusion, social responsibility (SR) is about the concept of understanding your business' impact on the broader point of view and considering how you can use this impact in a positive way in order to benefit your organization and company. Social Responsibility can benefit to your bottom line as you can see from the Chevron’s ways of operating their businesses under the strong concept of social responsibility. As a result, besides the good image and the good reputation of the company, there are many kind of benefits that your company will generate back once you have given the goodness to the societies and the communities. Every of us can create the sustainable businesses by having the best and strong relationships with your communities, stakeholders, shareholders, customers, and employees. As you can see that there are many companies became to focus more and work harder in order to make a positive impact on society and the environment through their operations, products or services. It is clearly that business itself does not exist alone nor is it simply a way of making money. However, all of your employees are depending on your business. Customers, suppliers and the local community are all affected by your business and what you do. All aspects are having an impact on the environment; therefore, it is important to be responsible by integrate the social responsibility strategy into your company which is the better way if doing business.
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