Question 1.4.

5 Royal Dutch Shell

The global company such as Shell should consider environmental and human rights groups before
making appropriate decisions.
It is undeniable that external skateholders exert a big influnence on the company. They receives
much media coverage, so they can take some very effective action against Royal Dutch Shell
through media, which can impair the image of the company and organize the customers to
boycott the product of Royal Dutch Shell, resulting in much reduced sales for the business. As the
Europe's largest energy and oil company, the negative news reported by powerful pressure group
like Greenpeace could cause a significant detriment on the profitability and reputation of Shell.
Besides, if Shell fulfils its cooperation social responsibility and gain the support of the pressure
group, then it will become more competitive in this market. Some workers and investors may
want to be linked to the business that act environment-friendly, so Shell may find it easier to
recruit the best workers and raise capital from investors, which could lead to a long term profit.
On the otherhand, allowing environmental and human rights group to exert a big influence on
the decision-making process may result in skateholder conflict, as this kind of behabiour would
cause some shareholder discontent. For shareholders, to maxmise dividends profits is their main
objectives. But the cost of protecting the environment or practice ethically could be exorbitant,
this will violate the interests of shareholders, leading to the internal conflict and lost of support
from some shareholders. But these problem could be solved by communicating.
Besides, it could be argued that it is not the role of Shell to protect the environment. If pollution
is a problem, governments should take the responsibility to pay to clean it up. Protecting the
environment can be expensive, which means Shell may leave the Fortune Global 500 list if Shell
pay for it.
Overall, I think the advantages of considering environmental and human rights groups before
making appropriate decisions overweigh the drawbacks. So Big companies should take pressure
groups' opinions into account when making decisions