Sense Making and sustainability in Petroleum industry - Dissertation Example

The emergence of globalization along with a fast information exchange and cross cultural amalgamation has led business dynamics to incorporate several new aspects within it (Weiss et al, 2008, p.377). No doubt, the companies are making new ventures in foreign territories for optimizing their profit port folios, but the social and environmental aspects of international productions form a crucial part which forms the main trajectory of several new aspects as stated above. Relying only on maximizing profits and generating mammoth revenues will fetch only short run gains with dynamic decline.

In order to become a dominant player in this globalised market with a goodwill establishment, the companies have to first of all become good corporate citizens. They have to incorporate the notion of Corporate Social Responsibility (CSR) with various codes of conduct which will ensure socially responsible business practices within the business and its overseas as well as domestic operations. But applying the attributes of CSR is not at all an easy task. Several challenges are faced by the management of companies in its proper implementation and maintaining the proper code of conduct.

Geographical, economical, legal, cultural and political barriers act as hindrances in the proper implementation of CSR policies. Adverse conditions like agency problems, moral hazard, corruption and malpractices creep into the system which results in non compliance of the rules and regulation implementation and leads to sub optimal results.. Geographical, economical, legal, cultural and political barriers act as hindrances in the proper implementation of CSR policies. Adverse conditions like agency problems, moral hazard, corruption and malpractices creep into the system which results in non compliance of the rules and regulation implementation and leads to sub optimal results.

In case of non compliance the initiator will face negative customer sanctions, capital loss, damaged brand values and so on (Pedersen & Andersen, 2006, p. 228). The oil industry bears a historical trend of malpractices, corruption and violent activities (Beri & Sinha, 2009). The prime agenda with oil is that it is generally scarce and the companies have a tendency to explore it wherever it is available. Thus in the oil companies, there has been a natural trend in participating within a global business paradigm and the emergence of CSR practices becomes a more robust parameter in conducting business in an ethical manner (Spence, 2011, pp.59-60). High vulnerability comes in short term and long term ways.

In the short term, there may occur natural hazards like that of oil spills as well as improper sewage of excess natural gas and so on. The long term vulnerabilities include social risks like poorly paid labor, inadequately maintained equipment and threat to the indigenous people at stake facing atrocities and negligence and in some cases they are even killed (Multiple uses of the coastal zone, n.d.). Thus the historical evidences backed by this obnoxious phenomenon have urged the oil and gas TNCs (Transnational Corporations) to play a pioneering role in developing strong leadership roles in the development of good corporate practices as well as rules of behavior in the place of work and engagements in diverse