The role of corporate social responsibility in an oil company's expansion into new territories

Abstract

The nature of the oil industry demands that it be proactive and socially responsible in addition to operating in an ethical and environmentally friendly manner. The aims of this study were to analyse the role of corporate social responsibility (CSR) in BP's overall business strategy and its practices in relation to oil developments in the Faroe Islands as well as examining the benefits of employing CSR as an integral part of business strategy when operating in new territories and cultures. The findings suggest that BP's awareness of the relationship between socially responsible investment and reputation, linked to their desire to have a positive impact on the societies in which they operate, mean that CSR is an important component of their business strategy. However, while BP perceive CSR as having a positive effect on their expansion into new territories and the host country may require licence bids to include social and environmental factors, these are secondary to operational performance and technical capacity in determining licence awards. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.