The Challenge of Balancing Ethical and Philanthropic Responsibilities by Companies in Extractive Communities

Abstract

The discourse on ethical responsibility of business has been elevated in the last couple of decades following some crisis, which calls to question the ability of business managers to make moral decisions. Consequently, pressure groups from around the globe have been sensitizing the public on unethical practices by business through awareness campaign, education, and social media platforms. This has increased the momentum that business should at the very least act responsibly. In this paper, we investigate how philanthropic responsibility undermines ethical responsibility in extractive communities in less developed societies. For example, international oil companies (IOCs) that operate in the Niger Delta Region of Nigeria (NDR) are not apprehensive of their ethical responsibility because they are dealing with an impoverished people, whose preoccupation is daily sustenance. Most extractive communities are beleaguered with poverty and the lack of basic infrastructure that make life meaningful. Therefore, the paper analysis how a CSR framework referred to as Global Memorandum of Understanding (GMoU) has diverted attention from ethical responsibility of IOCs in the NDR. The study finds that the GMoU framework aligns with the business case, where firms engage in activities that guarantee business continuity and profitability. Therefore, the framework establishes a correlation between philanthropic responsibility and poverty. It is also clear that poverty is a major reason why different stakeholders in the region are not vocal about the neglect of ethical responsibility by IOCs. While acknowledging some limitations; the paper strongly suggests the inclusion of ethical responsibility in the GMoU framework at the same time concedes to the transformational effect of the framework in host communities.

Keywords: Ethics, Immoral Management, Extractive Community, Philanthropy, Gmou