1. A Case of Stakeholder Management by Oil & Gas
MNCs in Nigeria: An Illustration
Nnadozie Izidor
(PhD Research Student, UCLan, UK)
Communication, Marketing & PR Division.
A Lecture Presented at Harris Building,
University of Central Lancashire (UCLan),
Preston, UK. March 14, 2013

2. Discussion Outline
• Who are Stakeholders?
• What are their Stakes?
• What are the Stakeholder Challenges facing MNCs in Nigeria?
• What are the current strategies for community engagement
in Nigeria?
• A recommended approach for MNCs?

3. Who are Stakeholders?
What is a Stake?
• A Stake is an expressed interest or a share in an undertaking.
• It is an expression of right of ownership of something, (such as legal or moral rights).
Who is a Stakeholder?
• A Stakeholder is someone (or a group) that holds a Stake in an undertaking.
From the Scholars Point of View
• Freeman (1984) - A stakeholder is any group, organisation or individual who ‘can’
affect or is affected by the achievement of the organisation’s objectives.
• Donaldson and Preston (1995) – Based on its legitimate interest in the organisation,
a Stakeholder is any group or individual whose interest has at least some
fundamental values.
• Carroll and Nasi (1997) - A Stakeholder is any group or individual that has a valid and
active stake in the organisation’s activities.

4. Who are Stakeholders? (Contn..)
Stakeholders of the Business
Broad Grouping
• Internal
• External
• Mediante*
Identification and Prioritisation
These are based on whether Stakeholders are either:
• Primary or Secondary
• Active or Passive
• Economic or Social
• Core, Strategic or Environmental, etc
*Mediante Stakeholders are
both inside and outside the
organisation at the same time;
they possess some confidential
information about the
organisation which are always
protected in a contract, and
provide services that support the
organisation to achieve its
objectives. It is both a French and
Italian word, meaning ‘come
between’ and originates from the
Latin word ‘Mediare’ meaning ‘Be
in the middle of’.
*Online Communities are
emerging stakeholder groups
from the social media networking
sites. They can add value to an
organisation, and they also have
the power to pull down an
organisation in a matter of hours.

5. Who are Stakeholders? (Contn..)
Stakeholder Structure in the Nigerian Oil & Gas Industry

6. Who are Stakeholders? (Contn..)
Prioritising for Stakeholder Management (Power -Interest Matrix [Gardner et al, 1986])
Oil MNCs in Nigeria and Stakeholder Mapping (Power vs Interest)
A – High Power, Low Interest (Keep Satisfied)
Could be encouraged into a Coalition (Allies)
B – High Power, High Interest (Manage Closely)
Deserve sustained management attention
C – Low Power, Low Interest (Monitor Less)
Though passive, but still a potential stakeholder
D – Low Power, High Interest (Keep Informed)
Can influence future activities and happenings

7. What are Stakeholders’ Stake?
• A Stakes is an interest or demand that Stakeholders express to the organisation,
which could be moral or legal, or a combination of both.
• Stakeholders and Organisation express certain interests to one another at every
point in time.
• Those interests are expectations both have for each other in fulfilling their
contractual and moral obligations.
In Nigeria, the main Expectations of Host Community People are:
• Employment Opportunities
• Provision of Social Amenities
• Environmental Concerns
• Patronage of Local Businesses and Expertise, etc
For the Oil MNCs, their main Expectations have been:
• A Favourable Lower Levying System (e.g. taxes, royalties)
• A Safe and friendly environment to operate and meet business objectives
• Community to respect company’s legal rights to operate
• A favourable industry regulatory practices, etc

8. What are the Stakeholder Challenges
Facing MNCs in Nigeria?
• Level of Development
• The current legislation and the role of
Government
• Not understanding the institutional pattern of
local communities
• Lack of proper engagement

9. What are the current MNCs’ Strategies for
Community Engagement in Nigeria?
The Royal Dutch Shell Approach

10. A Recommended Stakeholder Management
Process (SMP)
• Identify all stakeholders
(Mapping)
• Assess all stakeholders needs
(Stake)
• Analyse stakeholders Influence
(Power) and Interests
• Manage stakeholders
demands (Expectations)
• Decide the best strategic
action (Engagement)
• Continue to Review, Improve
and Repeat the process
To achieve effectiveness, SM has
to be a continuous review process