An Evaluation Of Strategic Contingency Planning Commerce Essay

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All organizations are at risk of events that could tarnish their reputation. These events range from pollution to natural disasters, poor management to poor governance. In developing countries, several large multinational conglomerates have time and again, been blamed of causing conflicts and other environmental issues with their operations. As a result, these multinational companies are frequently targeted by activists (Frynas, 1998: 23) and so, an organization must show that it has proper resources and systems in place, and that priorities and responsibilities are clear during a business crisis situation.

Albrecht (1996) describes a business crisis as an event-specific episode that can force an organization into bankruptcy, as the gravity of the crisis is the potential for impact or damage on an organization's customers, peoples or operations. The chairman of Lloyd's insurance market, Lord Peter Levene (cited in Said, 2004:1), assert that a good number of global corporations do not have plans to manage crisis despite the fact that about 40 percent of corporations that cannot fully recover from a disaster will fizzle out within five years.

This study is aimed at addressing key areas of business crisis and business continuity management. It will critically examine how the security strategies of the biggest transnational oil corporation in Nigeria, Shell Petroleum Development Corporation (SPDC), has evolved and adapted to the growing tensions in the Niger Delta region of Nigeria. The study will lay emphasis on the Ogoni crisis and how Shell Petroleum has managed to survive and sustain its businesses in the Niger Delta and Nigeria, despite its involvement in the Ogoni crisis that was particularly criticized, gained huge international recognition and almost marred its operations in the country. The research will also draw on an array of literature addressing corporate social responsibility (CSR) and the civil society.

1.2 Background of the Problem

On the 10th of November 1995, the military regime of Nigeria under General Sani Abacha executed Ken Saro Wiwa and eight other principal activists of the Ogoni people of the Niger Delta. Shell Petroleum was implicated in the murders. It was reported that Shell had provided financial support and supplied guns to the military task force that destroyed communities and massacred the Ogoni's in their hundreds (ICR, 2008) The Ogoni people were angry that they were not accorded a real stake in the billions that Shell Petroleum realized from oil production on their land, and the environmental degradation from the company's operations (Saro-Wiwa, 1992). The Ogoni people began mass protests against Shell. When the events following the protests made the international community to respond with outrage, and which was displayed in protests against Shell worldwide, the corporation reacted with an immense strengthening of its spin machinery by announcing a new blue print of its version of corporate social responsibility and devised methods to rebrand its image in the Niger Delta to be able to continue its business in the region (Olowu, 2011). Between 1996 and 2009, Shell Petroleum published various reports of its commitment to improved environmental practice, and contribution to national development (Olowu, 2011).

The problem this study intends to address is that of an intense need for leaders of organizations to have in place, business continuity plans (BCP) in the event of a crisis or disaster, as business continuity management has become a boardroom agenda (Gallagher, 2006). Gallagher (2006) point out that leaders of corporations can improve their recovery odds only if they implement the necessary measures before and after a crisis as without a plan in place, they may not be able to fully recover from a catastrophe. Bearing in mind the vast wealth of scholarly literature that has been published in relation to the Niger Delta crisis, it will be of no value to revisit the existing volumes of written work. Instead, the focus of the thesis is rather on the business continuity plans of Shell Petroleum in the aftermath of the Ogoni crisis, and the significance of the corporation's transition to the dynamic challenges of reconciliation.

1.3 Significance of the Research

Organizations from the private, public and not-for-profit sector face the risk of events that could disrupt their operations and have impacts ranging from short-term disruption, to the very destruction of the corporation (Shaw, 2004). Organizational functions that support business disruption preparedness, prevention, response and recovery such as crisis management, contingency planning, risk management, emergency response, and business recovery should be established based on the perception of the organization of its environment and the risks within those environments. The September 11, 2001 attacks of The World Trade Centre in New York brought to the forefront of many corporate leaders' priorities, the subject of crisis management and business continuity. Lasecki (2009) is of the opinion that business continuity and crisis planning is presently being studied on a larger scale due to the insecurity of global relations between countries.

In the world of business today, the reality is that increased natural, human and technological induced threats, government regulations, corporate governance requirements, business complexities, and public and media scrutiny demands an integrated and comprehensive approach to business crisis and continuity management (Lasecki, 2009). Classic technological, human and natural induced events such as the Tylenol poisoning case (1982), the Bhopal chemical release (1984), the Exxon Valdez oil spill (1989) and the World Trade Centre attack (2001) have provided lessons that stress the need for effective BCCM measures (Lasecki, 2009) The implications for businesses that are indirectly or directly impacted by physical events further lay emphasis on the need for broader coordination of the numerous functions supporting business continuity and crisis management (BCCM). Therefore, the results of this research study will further contribute to an understanding of the organizational functional areas that supports the management of a crisis or disruptive event, and continuity of operations.

The measure of success of this research work is` developing, validating and presenting a summary of competencies (skills, knowledge and abilities) required to successfully structure and manage a business crisis and continuity management program to meet organizational specific requirements, and also to present guidelines to leaders of organizations with business crisis and continuity management responsibilities. This study does not intend to explore additional organizational characteristics e.g. risk preferences, culture, economic health, political structure, etc. which may influence a corporation's commitment and focus to a BCCM program. Therefore, the thesis is limited in its scope to the development of competencies that are essential components of an integrated and comprehensive BCCM program.

1.4 Research Aims and Objectives

This section presents the main aim and objectives of the research.

1.4.1 Research Aim

The main aim of this thesis is to investigate the strategies adopted by Shell Petroleum in the aftermath of the Ogoni crisis in which the corporation was implicated in. The research intends to explore the crisis, the involvement of Shell in the crisis, and the crisis management and business continuity strategies adopted for sustainable business operations.

1.4.2 Research Objectives

The problem statement and the research aim leads to the research objectives, of which when addressed, will answer the underlying issues of the study. The objectives of the research to be completed in order to achieve the aforementioned aim of the thesis include:

Critically evaluating to what extent the activities of multinational oil corporations in Nigeria, and in particular, Shell Petroleum, have aggravated conflict and crisis in the Niger Delta region of Ogoniland

how these activities have had an effect on the environment and lives of indigenes in the region

Identifying and examining Shell Petroleum's crisis management and business continuity strategy for coping with the consequences of the crisis

Proposing effective business continuity plans for organizations in the aftermath of disasters, emergency or crisis events.

The research study will contribute to the debate on the benefits of appropriate business continuity strategies of multinational corporations in developing countries.

1.5 Study Area of This research

The study area of this research is the Niger Delta region of Nigeria. The region is situated in the southern part of the country, covers about 70,000 km and includes nine states: Cross Rivers, Akwa Ibom, Abia, Bayelsa, Delta, Ondo, Edo, Rivers State and Imo (Okafor, 2011). The region is made up of mainly the Igbo's, Ijaw's, Ibibio's, Edo's and Yoruba's, and other several minority ethnic groups like the Urhobo's, Itseriki's and Ikwere's. In terms of political zoning, the region constitutes a few states from the south-west and south-east but is largely dominated by the south-south geopolitical zone states (Omofonmwan & Odia, 2009).

The Niger Delta region is blessed with abundant natural mineral resources and accounts for the larger percent of Nigerian's oil and gas reserves (SDN, 2010). This region is the third largest producer of palm in the world following Malaysia and Indonesia, and is bounded by the Atlantic Ocean (Omofonmwan & Odia, 2009). It holds over 90 percent of Nigeria's oil and gas reserves and is the harbour for Nigerian oil activities (SDN, 2010).The justification behind this region as the choice of study is because the Niger Delta is where almost all activities that relates to oil production in Nigeria takes place, and the region experiences majority of the impacts of these multinational corporations' oil practices: gas flaring impacts, oil pollution, insecurities, killings, socio-economical disturbances and conflicts.

1.6 Research Design and Limitations

This research involves the investigation of Shell's involvement in the Ogoni crisis. Using mainly secondary research, the specific threats of the crisis to Shell's business continuity in the Niger Delta will be examined. The empirical study will describe the said crisis and will attempt to show how Shell's management responded to and managed the crisis, identifying its management approach.

The major limitation of the research is the researcher's inability to travel to Ogoni land to get information from sources in the area due to funding, time and security constraints. As such, information transmitted by the corporation, activist groups, NGOs, government and civil society representatives will be of central importance. Therefore, it is important to recognize that this study is mainly based on secondary sources, although considerable effort has been made to examine an extensive range of interests and perspectives.

There are also other limitations. First, while several transnational corporations are functional in the Niger Delta, this research will only lay emphasis on Shell Petroleum policies. As observed by Omeje (2006: 216), due to its pioneer control during the era of colonial rule, the corporation heads Nigeria's onshore oil production and exploration. This has given Shell Petroleum more interaction with communities in the Delta than other transnational corporations and as Avant (2007) point out; its policies present a classic case for the development of strategies for corporate security. Secondly, while there have been several manifestations of civil society in the Niger Delta as Ikelegbe (2001: 442) argues, this research will identify issues that have posed the most severe challenge to Shell; specifically, the Ogoni crisis. Finally, whilst instability have stretched to other regions nearby (ICG, 2007: 7), this study lays emphasis on the immediate significance of the security strategies of Shell in the Delta itself.

1.7 Structure of the Dissertation

The research structure over the next few chapters is as follows:

Chapter 2: is a discussion on Nigeria's oil sector. The chapter discusses Oil and Nigeria's socio economic performance, Oil and intergovernmental relationships in Nigeria, Oil and the Nigeria Delta Crisis, and Shell Petroleum in Nigeria.

Chapter 3: is a literature review on business continuity and crisis management. It provides information on how studies were selected for the literature review such as the databases searched, keywords used and selection criteria of studies. The chapter will also discuss previous literature on Shell and its involvement in Nigeria.

Chapter 4: this chapter explains the research methodology used for analysis in this study. It discusses the research approach, research strategy and methods, and a conclusion of the chapter.

Chapter 5: Chapter 5 is a critical analysis of the Ogoni crisis and Shell's involvement in the crisis. This will be done by critically evaluating the issues preceding the crisis and the aftermath of events following the crisis. The chapter will then discuss major crisis management plans and business continuity measures adopted by Shell, and the opportunities and benefits for corporations to include adequate crisis management strategies in business policies and practices.

Chapter 6: is a conclusion of the research. It discusses limitations of the research, and proposed recommendations.