Corporate Social Responsibility (CSR) activities and Supply Processes (SP): a case of CNOOC Uganda Ltd.’s suppliers.
MetadataShow full item record
The recent discoveries of oil and gas (O&G) in Uganda have so far been characterized by International Alert (2014) with ‘oil exploration scramble.’ Many oil exploration companies are rushing to Uganda to secure oil blocks. They have thus put a lot of attention to securing supplies which will enable them produce oil and the related services. Less attention is put to corporate social responsibility (CSR) considerations yet O&G companies have complicated supply processes which should be highly effective if social and environmental unrests are to be avoided. Henceforth, this study was set out to examine the role of Corporate Social Responsibility (CSR) activities in ensuring effectiveness of Supply Processes (SP) within Oil and Gas business. So using a quantitative cross sectional research design, a sample of 73 prequalified CNOOC suppliers /companies as at 31st July, 2015, were studied. Data from these companies was collected using a structured questionnaire, through face-to-face interviewing & emailing of respondents. Results from the correlation indicated that there is a significant positive relationship between community responsibility and Supply Processes (r = .574**, P <0.01). Additionally, there is a significant positive relationship between market place responsibility and Supply Processes (r = .518**, P <0.01). Findings further reveal that there is a significant positive relationship between environmental responsibility and Supply Processes(r = .473**, P <0.01). Furthermore, community social responsibilities were found to be the most priority determinants of Supply Process followed by Environmental responsibilities and lastly Market Place Responsibilities. Additionally, regression analysis revealed that CSR activities (a combination of community responsibility, environmental responsibility, and market place responsibility) positively and significantly predicted up to 47.5% (see, Adjusted R square 0.475) of the variance in the supplier chain processes (SP). This implies that 52.5% of the variance in SP is explained by other factors outside the model used. On this basis, I conclude that communities and various stakeholders (including employees) of suppliers to oil companies are increasingly looking beyond salaries and benefits that accrue to supply process participants. They are also seeking out employers (suppliers and their chains) whose philosophies and operating practices match their own principles. Hence, in order to have effective supply process, companies (that is, supplier to oils companies and their supply chains) should think of ways of improving working conditions, community relations as well as active stakeholder engagements. Also, there is need to build local supplier chain capacities to create awareness of the social and environmental responsibilities. This will instil confidence in the local communities about business activies in the Oil and Gas sector.