i. Summary

Royal Dutch Shell is a Dutch and British based company that in 2009 was named the world’s largest corporation by Fortune and world’s second largest corporation by Forbes. Stuck in a quagmire of violence and political issues in Nigeria, Royal Dutch Shell’s challenge was to establish socially responsible business practices to enable the company to sustain and expand its operations in Nigeria and the Niger Delta in particular. A conflict resolution and public policy consultant was brought in how to develop some constructive ideas on how best to address the problems Royal Dutch Shell faced in Nigeria. This case is intended to introduce students to some of the complex the complex issues faced by multinational corporations in developing countries. Although Shell is very lucrative company that makes millions of dollars a day, they would be very hurt to lose business operation base in Nigeria. Shell went from an egoistic operation in Nigeria to a benevolent and principle based operation. If Shell even took on a larger sense of social responsibility, they would have gained a larger competitive advantage over the competition.

ii. Chronology 1. This case begins when Benjamin Aaron, a conflict resolution and public consultant, receives a request from one of his important clients, a potential new member to the board of Royal Dutch Shell, to provide advice on how to address the problems that Royal Dutch Shell faced in Nigeria.
2. The case goes on to review the turbulent political history in Nigeria, and taken to establish socially responsible business practice in Nigeria.
3. The case focuses on the oil-rich Niger Delta region, and describes how violence and corruption has led to social unrest in the region.
4. Despites Royal Dutch Shell’s significant foreign direct investment in Nigeria, the social benefits to the local people have been largely unrealized.
5. Instead, oil prices are growing higher and the local communities are in uproar. Royal Dutch Shell’s challenge is to help improve its image and maintain its long term economic viability in Nigeria. iii. Key issues

Shell forced Ogoni citizens to live in poverty and poor health while the Shell Oil Company made millions. Operations in Nigeria have contaminated the land with oil and brought about the devastation of acid rain to the land.

iv. Answers to the question.

1. The facts that Royal Dutch Shell has such a large investment in Nigeria are beneficial because the world’s demand for oil has been increasing. This automatically puts Shell in a potentially valuable position, as they stand to reap extraordinary profits by providing the majority supply from this region, to meet this demand. It also places Royal Dutch Shell at greater risk because the stakes involves in extracting their product in this region are higher.
2. Royal Dutch Shell faces a host of political issues in Nigeria. Ranging in scope and complexity. They must deal with the national government, local people and tribes, and powerful NGOs. Furthermore, in Nigeria there are overarching inadequacies in terms of corruption, bribery, and overall weak legal system.
3. It would be quite difficult for Royal Dutch Shell to pull out of Nigeria at this point, because the investment made in Nigeria creates a strong tie and motivation to remain in the region. And also, the opportunities for profit in the oil and gas markets are simply too valuable to walk away from.
4. It should be clear that the role of government and the multinational corporation are distinctly different. The multinational corporation responsibility to the shareholders, while the government has responsibility to the people within their jurisdiction.
5. Benjamin Aaron’s observation and recommendations should address the challenges that are growing more complex for Shell in Nigeria, especially the joint venture operation. He should propose that Shell take an integrated and long-term approach to reduce risk and restore credibility.