The University of Southampton
University of Southampton Institutional Repository

Evaluating stakeholder theory in a developing country context: a case of the upstream sector of the oil and gas industry in Nigeria

Evaluating stakeholder theory in a developing country context: a case of the upstream sector of the oil and gas industry in Nigeria
Evaluating stakeholder theory in a developing country context: a case of the upstream sector of the oil and gas industry in Nigeria
Since Freeman’s seminal work on stakeholder theory, there has been increased scholarly focus on developing the stakeholder concept as a theory of the firm. While the stakeholder concept is an established theory, the approach has been instrumental with much attention on the needs and responsibilities of the firm; leaving little consideration for other stakeholders (Wood, 2010). Scholarly work that focuses on the perspectives of stakeholders instead of the firm alone would help enhance the normative and strategic basis of the theory. Informed by seventy-five semi-structured interviews, this study elucidates broad and specific stakeholder perspectives using the upstream sector of the oil and gas industry in Nigeria as the context. The research finds that some of the assumptions underpinning stakeholder theory are Western-centric and cannot be applied unchanged in a developing country context. Based on the insights generated from the data collected, this research suggests a refined stakeholder framework which has society at its centre and focuses on all stakeholder objectives (including that of the firm), hence, not only focusing on that of the firm’s objectives as is presently the case.

A synthesis of the findings from the stakeholders interviewed for this research revealed that focusing on the wellbeing of all stakeholders in society as the overarching goal would lead to symbiotic outcomes for all stakeholders. Also, interviewees argued that focus of all stakeholders in the society would result in an unconditional consideration of each stakeholder’s rights and responsibilities, plus safeguard each stakeholder’s survival. One section of the society that this research focuses on is the local community (and to a lesser extent temporary employees). This focus was informed by the empirical data, which revealed that local communities were consistently ranked as the most negatively impacted stakeholders in the oil and gas industry in Nigeria.

The limitation of assuming that stakeholders have a consensus as to what standards of values are considered to confer legitimacy is addressed, providing insights into a normative approach to understanding stakeholder theory particularly as it relates to developing countries. This research has revealed that multinational oil companies have strong control of Nigeria’s oil and gas industry via partnerships with many influential stakeholders, such as the government, some civil society organisations and the press. The drivers of multinational oil companies power (such as historical hangover and intra-stakeholder conflict) which result in the local communities’ vulnerability are discussed. The imbalanced power differential informed the need to consider an alternative conceptualisation of stakeholder theory which has society at its centre.

A second research outcome is contextual. Although anticorruption laws exist both in Nigeria and in the home countries of the multinational oil companies, the opaque nature of the oil and gas industry allows high levels of corruption to thrive in the industry and has an impact on stakeholder expectation and engagement. The existence of stakeholder relativism or double standards in multinational oil companies’ practice in Nigeria, compared to their operations in developed countries, is articulated.

Thirdly, this research highlights the need to extend past academic studies, which have focused only on corporate social responsibility to include a conceptualisation of stakeholder responsibility. A theoretical underpinning of stakeholder accountability is necessary due to some stakeholders, such as some Government officials, some Naval officers and certain members of local communities being accussed of sabotaging, stealing and engaging in illegal mining of oil products from oil facilities operated by the multinational oil companies. This research has revealed that stakeholder social irresponsibility could also lead to more corporate social irresponsibility and vice-versa.

The implication of this research for practitioners and policy makers is that it offers insights into how not to allocate scarce resources in a developing country context. Another implication of this research for practitioners and policymakers is that it discusses the institutional and managerial challenges relating to engaging stakeholders and how they could be addressed in a developing country context. Also, some of the findings of this research could be useful for managers and policy makers in developed countries, if and when they experience crisis situations in their home countries (e.g. terrorist attacks, wars or natural disasters) and/or decide to expand their operations into Sub-Saharan Africa.
Abubakre, Alim
abd4a2e7-3807-4a95-b605-b70402b683af
Abubakre, Alim
abd4a2e7-3807-4a95-b605-b70402b683af
Harwood, Ian
8f945742-3e33-445e-9665-0f613f35fc5b
Baden, Denise
daad83b9-c537-4d3c-bab6-548b841f23b5

Abubakre, Alim (2015) Evaluating stakeholder theory in a developing country context: a case of the upstream sector of the oil and gas industry in Nigeria. University of Southampton, Southampton Business School, Doctoral Thesis, 420pp.

Record type: Thesis (Doctoral)

Abstract

Since Freeman’s seminal work on stakeholder theory, there has been increased scholarly focus on developing the stakeholder concept as a theory of the firm. While the stakeholder concept is an established theory, the approach has been instrumental with much attention on the needs and responsibilities of the firm; leaving little consideration for other stakeholders (Wood, 2010). Scholarly work that focuses on the perspectives of stakeholders instead of the firm alone would help enhance the normative and strategic basis of the theory. Informed by seventy-five semi-structured interviews, this study elucidates broad and specific stakeholder perspectives using the upstream sector of the oil and gas industry in Nigeria as the context. The research finds that some of the assumptions underpinning stakeholder theory are Western-centric and cannot be applied unchanged in a developing country context. Based on the insights generated from the data collected, this research suggests a refined stakeholder framework which has society at its centre and focuses on all stakeholder objectives (including that of the firm), hence, not only focusing on that of the firm’s objectives as is presently the case.

A synthesis of the findings from the stakeholders interviewed for this research revealed that focusing on the wellbeing of all stakeholders in society as the overarching goal would lead to symbiotic outcomes for all stakeholders. Also, interviewees argued that focus of all stakeholders in the society would result in an unconditional consideration of each stakeholder’s rights and responsibilities, plus safeguard each stakeholder’s survival. One section of the society that this research focuses on is the local community (and to a lesser extent temporary employees). This focus was informed by the empirical data, which revealed that local communities were consistently ranked as the most negatively impacted stakeholders in the oil and gas industry in Nigeria.

The limitation of assuming that stakeholders have a consensus as to what standards of values are considered to confer legitimacy is addressed, providing insights into a normative approach to understanding stakeholder theory particularly as it relates to developing countries. This research has revealed that multinational oil companies have strong control of Nigeria’s oil and gas industry via partnerships with many influential stakeholders, such as the government, some civil society organisations and the press. The drivers of multinational oil companies power (such as historical hangover and intra-stakeholder conflict) which result in the local communities’ vulnerability are discussed. The imbalanced power differential informed the need to consider an alternative conceptualisation of stakeholder theory which has society at its centre.

A second research outcome is contextual. Although anticorruption laws exist both in Nigeria and in the home countries of the multinational oil companies, the opaque nature of the oil and gas industry allows high levels of corruption to thrive in the industry and has an impact on stakeholder expectation and engagement. The existence of stakeholder relativism or double standards in multinational oil companies’ practice in Nigeria, compared to their operations in developed countries, is articulated.

Thirdly, this research highlights the need to extend past academic studies, which have focused only on corporate social responsibility to include a conceptualisation of stakeholder responsibility. A theoretical underpinning of stakeholder accountability is necessary due to some stakeholders, such as some Government officials, some Naval officers and certain members of local communities being accussed of sabotaging, stealing and engaging in illegal mining of oil products from oil facilities operated by the multinational oil companies. This research has revealed that stakeholder social irresponsibility could also lead to more corporate social irresponsibility and vice-versa.

The implication of this research for practitioners and policy makers is that it offers insights into how not to allocate scarce resources in a developing country context. Another implication of this research for practitioners and policymakers is that it discusses the institutional and managerial challenges relating to engaging stakeholders and how they could be addressed in a developing country context. Also, some of the findings of this research could be useful for managers and policy makers in developed countries, if and when they experience crisis situations in their home countries (e.g. terrorist attacks, wars or natural disasters) and/or decide to expand their operations into Sub-Saharan Africa.

PDF
Final PhD thesis - Alim Abubakre.pdf - Other
Download (2MB)

More information

Published date: May 2015
Organisations: University of Southampton, Southampton Business School

Identifiers

Local EPrints ID: 392644
URI: https://eprints.soton.ac.uk/id/eprint/392644
PURE UUID: 575dc41e-a202-4fa2-bc53-73064f52c097
ORCID for Ian Harwood: ORCID iD orcid.org/0000-0002-8647-2169

Catalogue record

Date deposited: 12 May 2016 12:33
Last modified: 06 Jun 2018 12:51

Export record

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of https://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×