COMMUNITY RELATIONS & ITS ROLE IN CORPORATE IMAGE-A case

study of SPDC
BY

www.projects.page4.me

(08034883821 08188988835)


CHAPTER ONE
1.1 BACKGROUND TO THE STUDY
The world is constantly becoming sophisticated, complex and
dynamic. Public relations as a Profession have continued to play
tremendous revolutionary roles in changing the face of the earth. As the
human society becomes more challenging and complex, people become
more enlightened and aware of their fundamental human rights. This
has led to series of crisis and face off among business organizations and
their host community.
There is no doubt that most of the activities of these organizations
constitute a nuisance to the host inhabitants and put their health at
great risk. The paramount objective of every business organization is
profit maximization. This would not be achieved without serene business
environment.


The concept of community relations is fundamental for effective
public relations practice in every organization. The survival of any
organization is contingent upon the measure of cordiality and continued
acceptance it enjoys in its business premises. A company whose policies
do not reflect the desires and aspirations of its host inhabitants is
seriously inviting reprisal attack from the community. It is only through
good community relations programme that company can improve the
quality of life of the host inhabitants.
Community relations entail creating and sustaining environmental
friendly programmes and actions of mutual benefit to both the
organization and its host community. In business parlance, the
transaction of these needs and expectations is regarded as Corporate
Philanthropy (Nweke, 2001:20).
Corporate social responsibility is a business philosophy which is of
the view that organizations in the pursuance of their profit motive ought
to be responsive to the needs of the society by meaningful contributing to
the socio-economic development of that society.
Organizations that are socially responsible are always rewarded
with favourable serene business environment. Thos that are insensitive
and dont live up to expectation are faced with reprisal action. The
favourable business atmosphere will make the responsive organizations


to flourish, whereas the insensitive ones are distracted by the hostile
attitude exhibited by the host community. Their prosperity and progress
are stifled.
Good community relations ensure a well planned and sustained
corporate identity which inversely plays a paramount role in shaping the
corporate image of an organization.
In Nigeria today, community relations is growing very fast and more
interest is being taken by organizations and corporate bodies in this
aspect of public relations. This is so because of some important factors
(Osuji, 1999:951-99).
Today Nigerias economic survival is dependant on petroleum.
Since the exploration and exploitation of crude oil which give the
country major percentage of its income are carried on in rural
communities with its attendant numerous risks, it becomes
imperative that public relation practitioners in those organizations
should give more attention to community relations.
Secondly, the oil installation and gas flaring that are located in
these communities make the people vulnerable. It becomes
important that adequate measures should be taken to reduce the
risk of this vulnerability. The surest way is by designing and
executing a good community relations strategy.


Thirdly, the constant leadership tussles, conflicts and youthful
violent outburst among youths and community leaders could have
carryover effect resulting to misdirected aggression against oil
companies. Maintaining good rapport with these groups through
excellent channel of communication which invariably must be a
concomitant of effective community relations strategy.
This study therefore, will look into the concept of community relations
and the role if has played on the corporate image of Shell Petroleum
Development Company of Nigeria (SPDC).

1.2 STATEMENT OF THE RESEARCH PROBLEM
People like Bittner (1989) argue that in a bid to ensure good
community relations, organizations expend shareholders money, cut
down workers salaries, waste precious time which should be used for
other profitable things. He calls it a fundamentally subversive doctrine
which offers insoluble practical problems.
While Nweke (2001:220) is of the view that compliance and non
compliance with the idea of corporate philanthropy determine the
measure of goodwill, cordiality and continued acceptance an organization
enjoys in its business premises.


The problem of this study is to ascertain the role Shells
Community Relations has played on their corporate image. The reasons
behind the negative or positive public perception, about SPDC.
As well as whether this is a result of its compliance or non
compliance to the business philosophy of corporate philosophy and the
positive or negative attitude of the management and staff members
towards the money expended on community relations.
Moreso, it will examine the extent to which these perceptions and
attitude are capable of affective the success or failure of the organization.


1.3 OBJECTIVES OF THE STUDY
The central goal of this study is to find out the role community
relations has played on the corporate image of Shell Petroleum Company
of Nigeria (SPDC); with the aim of evaluating their corporate philosophy,
its benefits and peoples attitude towards SPDC. This would be achieved
through the following objectives:
i. Assessing the community relations programmes of SPDC.
ii. Finding out peoples opinion and attitude toward SPDC as a
corporate entity.
iii. Probing into the reasons for such perception about SPDC.
iv. Assessing the programmes of SPDC for enhancing the lives of
its host community members in order to forestall crisis.


v. Making recommendations based on the research findings for
effective community relations programmes /projects for SPDC.

1.4 SIGNIFICANCE OF STUDY
This study is not only significant but absolutely essential, because it will
help students or practitioners of public relations in diverse organizations
to understand the usefulness of good community relations in the life of
every organization.
Since public perception is very crucial in every organization, the
study will help SPDC in understanding peoples feelings towards its
community relations practice. Other organizations will see the findings
useful as they will help them in ensuring good community relations in
their host areas. The study will help in furtherance of knowledge in the
areas of community relations and the emergent business ethnics of
corporate social responsibility.

1.5 RESEARCH QUESTIONS
The following research questions will be answered through the study:
1. In what ways have SPDC maintained good relationship with its
teaming publics and host community?
2. How do people, the stakeholders and staff, perceive there sources
expended in ensuring good community relationship?


3. What are the expectations of the community members from SPDC in
their community relations effort?
4. What role have community relations played on the corporate image
of SPDC?


1.6 RESEARCH HYPOTHESIS
H1 SPDC maintained good relationship with its teaming publics and
host community.
H0 SPDC did not maintain good relationship with its teaming publics
and host community.
H2 The people, the stakeholders and staff did not perceive the
resources expended in ensuring good community relationship.
H3 Community relations played a role on the corporate image of SPDC.
H0 Community relations do not play a role on the corporate image of
SPDC.
H4 Community members expectation from SPDC in their community
relations effort.
H0 Community members do not have expectation from SPDC in their
community effort.




1.7 CONCEPTUAL AND OPERATIONAL DEFINITION OF TERMS


To clarify meaning, it is pertinent to present and explain some
terms used in the study to the level that will facilitate understanding of
the inherent ideas. The terms include the following:
CONCEPTUAL DEFINITION OF TERMS
Community Relations: It is a public relations activity that tends to
create and sustain environmental friendly programmes and actions of
mutual benefits to both the organizations and its host community. It
fosters and nurtures good neighbourliness in a reciprocal interest of both
parties.

Corporate Identity: This means and also includes the totality of what an
organization stands to its public and host community, how it does that,
its communication process and environment. It serves as the forerunner
to corporate image, it hits the soil for corporate image to grow without
problem. This is seen by the physical manifestation of good deeds the
organization does.

Corporate Image: This is the public perception of the organization. This
sums up the impressions formed about an organization based on its
corporate identity and general relationship with its public. It goes with
mental perception.



Corporate Social Responsibility: This is a business philosophy which is
of the view that organizations in the pursuance of their profit motive
ought to be responsive to the needs of the society, socially and
economically.
SPDC: It is an acronym for Shell Petroleum Development Company of
Nigeria.

OPERATIONAL DEFINITION OF TERMS
Crisis: Is any occurrence described as a turning point, for better or for
worse with both negative and positive effects.

Host Community: This is a group of peoples residing in an environment
where an organization operates.
Publics: These are various groups of people who may directly or
indirectly be affected by the activities of an organization. They include
the shareholders, employees, host community inhabitants and
contractors.

1.8 ASSUMPTION OF THE STUDY
Lets assume that Shell Petroleum Development Company of
Nigeria Limited is the pioneer and the largest hydrocarbon exploration
and production company in the country. Originally known as Shell
DARCY, SPDC commenced geological survey in 1937 and subsequently


was granted an exploration license precisely on the 4
th
of November,
1938. (2008 SPDC Immunization Campaign P.5)

After drilling several unsuccessful wells, Shell Nigeria in 1956
discovered the first commercial oil field in the country at Oloibiri, River
State (Now Bayelsa State). Later, Shell entered into a joint venture with
British Petroleum resulting in a joint venture operation known as Shell -
B.P.
In 1979, B.Ps share of participation in Shells operations was
nationalized leaving the NNPC/Shell Upstream joint ventures with an
80:20% split. Today, SPDC operated on behalf of a joint venture with
NNPC, Shell, EIF and Agip in accordance with the Joint Operating
Agreement (JOA) and within the legal and fiscal framework of the
Memorandum of Understanding (MOU) agreement with the Federal
Government of Nigeria.
(SPDC Briefing Note, 2008, p.45).
Shell Nigeria operations concentrated mostly in the Niger Delta
region of Nigeria and the adjoining shallow offshore, where they operate
in an oil mining lease areas of about 31,000 square kilometers.

The operational divisions of Shell Nigeria are:


The Eastern Division with Port Harcourt as the Headquarters,
Bonny in River State and Forcados in Delta State are its export terminals
with its corporate office at Lagos State. Ninety-five percent of their
workforces are Nigerians.
With the discovering of more oil wells in the country, the company
has continued to increase its oil product capacity from 6,000 barrels of
crude oil pre day in 1958, when the first cargo was exported, to millions
of barrels per day now.
Today, Nigeria is one of the highest oil producing nations in the
world. In 2001, the joint ventures accounts for some 39 percent of
Nigerias oil production and about 55 percent of the rations hydrocarbon
reserve base.

SPDC has over 6,000 kilometers of pipelines and flowline 87 flow
stations, eight gas plants and more than 1000 producing wells. The Joint
Venture involves the Nigerian National Petroleum Corporation (NNPC)
which holds 55 percent, Shell 30 percent, TOTALFINAELF 10 percent
and Agip 5 percent. The funding is in proportion to their shareholdings
(People and the Environment SPDC Annual Report 2008).




1.9 LIMITATIONS OF THE STUDY
This study is only limited to Shell Petroleum Development
Company of Nigeria. The researcher will not go into organizations as it
will be cumbersome. The result from the study are intended to be
generalized.

REFERENCES

Bittner, J. (1989). Mass Communication: An Introduction.
New Jersey: Prentice Hall Incorporation.

Nweke, O. (2001). Public Relations Practice: Concepts and
Strategies. Enugu: Hanson Pal Agency Limited

Osuji, C. (1999). Dynamics of Public Relations: Theoretical and
Functional Framework. Owerri: Dynamic Communications
Incorporation.


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