Category: Business

Multinational companies are large business companies that operate all over the world due to globalization. These companies are registered, as well as run their operations, produce and sell goods and services in more than one country. These companies are located in geographic regions that are favorable to their operations. Most of the multinational corporations are profit oriented; they are willing to do anything in order to make profits and live the “American dream”. Therefore, these companies do not care about the natural environment (Sawyer & Gomez, 2012). This paper will examine one of the multinational corporations operating in Africa and the impact that the company has had on the natural environment, both at the local and international level. Multinational corporations lie to emerging countries and take advantage of their labor laws and the availability of cheap labor, as well as exploit natural resources in the host country for their own profit gains (Sawyer & Gomez, 2012).

The Royal Dutch Shell, which is commonly referred to as Shell, is a multinational Anglo-Dutch oil company that operates in many countries, such as the United Kingdom, Nigeria, several countries in the Middle East, with the headquarters located in the Hague, Netherlands. The Shell company is the second largest company globally in terms of revenue. It is one of the six companies that major in oil and gas. By January 2013, Shell topped the fortune 500 list of largest companies in the globe, with the income of up to 555.8 billion US dollars, which is equivalent to 84 per cent of the Netherlands GDP (Hawken, 2010). Shell deals actively with all aspects of the gas and oil industry, starting from the oil and gas exploration, production, refining and distribution, as well as petrochemicals, marketing, power generation and trading (Jain & Vachani, 2006). It also deals with renewable energy activities, such as biofuel, but to a lower scale compared to the oil and gas. Globally, Shell operates in more than 90 countries, produces about 3.1 barrels of oil in a day and has approximately 44,000 service stations all over the world. In the US, Shell is subsidiary and one of the biggest businesses (Sawyer & Gomez, 2012).

In Africa, Shell began its oil drilling in the 1950s - in Nigeria in 1958 to be exact. It also operates in the upstream oil sector in Egypt, Algeria, Gabon, Ghana and Libya among others. Shell searches for crude oil and natural gas, liquefies and then transports gas. It operates in the midstream and upstream infrastructure required to deliver gas and oil to the market (Hawken, 2010). Its operations are organized predominantly within geographic units, with the exception of several activities managed across the industry and delivered through support units (Sawyer & Gomez, 2012). Shell also manages manufacturing, marketing and distribution activities for oil products and chemical. This includes refinery, shipping and supply of crude oil.

The Shell company in Nigeria has several issues regarding illegal activities taking place in the company’s business. There was reported a stealing of crude oil from the Shell pipeline running in the ocean. The company warned of siphoning of crude oil from their pipeline as a “massive and growing” problem. The crude oil siphoned is loaded to ships and transported to foreign countries. Recently, the losses resulting from the stealing of crude oil estimates to 7 billion US dollars in a year. All thieves steal an estimated amount of 60,000 barrels of oil a day from the Shell in Nigeria. In order to curb this problem, the Shell company appeals to all governments to investigate refiners, middlemen and foreign ships that maybe peddling its crude oil (Jain & Vachani, 2006).

In November, 2012, the Shell oil company and Sunoco Inc. were sued by the state of New Hampshire for allegedly adding MTBE to gasoline. The lawsuit claimed that the company should pay up to 35 million dollars for the MTBE substance that contaminates ground water supplies, travels fast and is difficult to clean (Sawyer & Gomez, 2012). There have been several oil spills in the Gulf of Mexico, with the Shell being suspected of being responsible. In April, 2012, it was suspected that a 10 mile oil slick in the Harbor of Mexico resulted from the Shell oil wells. This led to a sharp drop on the shares sold by 4pcs in London. This year, thousands of gallons spilled from a pipeline in Texas, causing Shell to shut down their west Columbia Texas pipeline in April. Allegedly, about 30,000 gallons of crude oil were spilt during this incident (Sawyer & Gomez, 2012).

Oil spills have devastating effects on the environment. In 2008, in Bodo, Nigeria, for instance, there were oil spills because of a faulty Shell pipeline that a caused massive land pollution, affecting approximately 60,000 people living in the Niger Delta. The spill was not stopped by Shell until the 7th of November; 72 days after the start of the spill. This frustrated farming and fishing which were the main occupations of the people living Bodo. It led to poverty, lack of food and clean water (Sawyer & Gomez, 2012). These people were exposed to the health risks of petroleum hydrocarbons coming from consuming fish, breathing air and bathing in contaminated water. For this spillage, the Amnesty International asked Shell to clean up oil spills to a standard that is internationally accepted, not only apologize, but pay an adequate compensation to the affected by the environmental pollution. It is also necessary for land and water systems to be rehabilitated, which can be achieved by working with the local community and other stakeholders. The company is required to fully inspect all its infrastructural assets to ensure their safety and make all these findings public (Davis, 2013).

In terms of the media and communication, Royal Dutch Shell has invested considerably in the Internet and different forms of advertisements. For instance, the company has a website, “Shell Global”, where one can get the latest information about the company, especially their price information, news, as well as the progress of their shares in the stock market. This is convenient for customers, considering that almost all of them can access the Internet on various devices, especially on mobile phone (Davis, 2013). This means that a customer can access any information he or she needs from the website at any time anywhere. There is a section on the website, where anyone can contact the company, and this allows them to gather information from customers and other people from all over the world (Sawyer & Gomez, 2012).

In the past, when nobody had crossed the continental borders and sailed overseas, human beings could interact with each other from far distances in numerous ways; one of the reasons is economic interactions (Hawken, 2010). They could conduct business despite numerous challenges such as communication. Today, it is possible to carry out business transactions with people from anywhere in the world. The term “Globalization” can be used to describe different aspects of dealings done at a global level, ranging from social, technological and political interconnectivity of people around the world. Today, there are many multinational companies that operate on more than 100 countries such as the Shell company discussed in this paper (Davis, 2013). The process of globalization has made it easy and manageable to operate in more than one country or continent. It is possible to monitor business progress of a multinational company from a central point (the headquarters) using the communication technology and the Internet. Anyone can collect, process and transmit different forms of data from anywhere to anywhere. It has enable people from all over the world to buy products and services online. This online business has allowed companies to offer convenient products and services, especially by allowing customers to “serve themselves” in their own way according to their preferences and tastes and meeting the needs of their customers (Davis, 2013).

As multinational corporations find materials, clients and labor from all over the globe (outside one’s own culture), they create interactions across nations. These interactions occur at an individual level and happen instantaneously. For these interactions to happen effectively among people with different cultural backgrounds, a universal culture, which all involved parties understand and embrace, grows over time. Globalization has in this way created some degree of universalization and homogeneity, which overshadow the traditional idea of embracing diversity as every country observes its native culture. With this trend, the drive to preserve the exceptional qualities of different cultures in the face of globalized world might be lost (Davis, 2013).

On a different note, globalization is promoting diversity in interests, values and demands. With the presence of multinational companies all over the world, it implies that they market and communicate with different people of different cultures in different countries. Communication and culture are inseparable, since the way people communicate is inherently tied to the culture, in which they grew up. This does not automatically get lost in people involved in international businesses; therefore, multinational businesses cannot be blamed for the loss of the cultural value. For example, some multinational companies with mother companies in America assume that their business models, which are successful in the US, will succeed in other parts of the world. Most of them end up failing because of some nations, like in the Middle East; culture does not only determine the behavior, but also requires variable avenues for success within diverse environments. Thus, due to cultural differences, people cannot take for granted that practices in one country may bring around the same outcome in another (Davis, 2013).

From the research conducted in this paper, if a multinational cooperation does not understand the fundamentals of intercultural communication or simply resolves to ignore them, its plans will most likely face obstacles and may not be able to attain its targets. As globalization brings about a divergence effect, cultures will just be as unconsidered as other businesses if they do not let their dealings with the world stage bring about some degree of change. As the digital age advances, and emerging economies join with the rest of the world in this trend, the multinational corporations will take advantage of the situation to appeal to and exploit various abroad markets. As this happens, these markets’ cultures will not only exist alongside the multinational corporations, but will find a way to become a part of globalization.

Globalization is being viewed in some parts of the world as a challenge, because it may have caused nationalism, as well as religious and ethnic conflicts. In some places, modernization resulting from globalization gets associated with the expansion of warfare. Some people perceive globalization as having destroyed the local, regional and national boundaries by overlaying international and co-operating networks on them. This has brought about mafias and organized crime, as well as multinational corporations that are powerful enough to bribe governments and exploit the country’s natural resources, causing environmental devastations as witnessed in some African countries, like Nigeria, where there is an oil extraction, but also high levels of poverty (Davis, 2013).

The process of globalization is taking over the modern world. Looking back at the days when there were little technological advancements, changes that have come along with globalization seem to be inevitable. It is not possible to reverse these changes that are taking place in the globalization process. It is impossible to reverse technological inventions and advances, although it is possible to reclaim, for example, the land destroyed during the activities of multinational companies such as precious stones quarries and abandoned minefields (Sawyer & Gomez, 2012). Rehabilitation of minefield helps to minimize the effects of open mining and make the land economically useful again. It can help in healing the natural environment from the ailments inflicted on it by the multinational corporations and other profit oriented human activities (Hawken, 2010).

Prev:

Related essays