Mba 240 Rds Case Assignment

Ali Burke

Professor Vieregger

MBA 240

25 February 2019

RDS Case Assignment

1. What do the terms best, merit, and fair mean in the context of RDS’s diversity and inclusion (D&I) policy in the case? After defining the terms, analyze how each term would be viewed within (a) the economic model of CSR and (b) the stakeholder model of CSR --- drawing on the definitions and examples in HDM Chapter 5, using page citations.

Best, merit, and fair are all terms that are up for interpretation and could have varying meanings based on the context of their application. Diversity can be a complicated issue to analyze in that regard. In this particular circumstance, the terms are referring to the process by which RDS implements their diversity and inclusion policy – what candidates they hire, which employees receive technical and educational training, who is promoted, etc. If the company is following specific diversification guidelines, are they hiring the best applicant for the job, do they qualify based on merit, is the application process fair? The company says that they are a “meritocracy”, meaning that they select their employees based on ability. Again, is that completely possible if it is highly suggested or in some cases or countries required that certain targets are met? When given a survey regarding the Diversity and Inclusion Program, one of the statements read “the decisions leaders in my organization make concerning employees are fair” and only about 50% of the respondents agreed (RDS Case, pg 21). So, in regards to the D&I program, the employees clearly don’t find it to be completely just.

As discussed in previous cases, the economic model of CSR “holds that businesses’ sole social responsibility is to fulfil the economic functions they were designed to serve” (HDM, pg 181). Further, the textbook argues that “Managers have a primary responsibility to pursue profit within the law” (HDM, pg 181). Based on this model, the Diversity and Inclusion policy would not be necessary. If the managers’ main goals or responsibilities are to be profitable, then they will want the best employees with appropriate merit; it won’t matter to them if the candidates are diverse. Fairness will not be an issue the managers are concerned with; their priority is making money. However, under the economic model, “they [the managers] are expected to obey the legal mandates established by the society” (HDM, pg 182). In this scenario, if the government or local community requires a diverse workforce, as was the instance in the case study, the managers would be expected to follow the regulations.

On the other hand, stakeholder model of CSR says that, “business exists within a web of social and ethical relationships… managers have responsibilities to all those who have a stake in the success or failure of the company” (HDM, pg 185). Under this model of corporate social responsibility, managers would be more likely to need to implement and follow the D&I policy put in place by RDS. Diversity and Inclusion are ethical issues that companies must take into consideration. The organization has several stakeholders, including: management, shareholders, local communities, employees, job candidates, governments, and more. RDS has a responsibility to each of these groups under the stakeholder model. The D&I program holds the company accountable to their stakeholders.

1. Identify five different stakeholders who are impacted by RDS’s D&I policy --- describe the impact of the policy on each stakeholder.

RDS’s “commitment to achieve a diversified workforce and an inclusive environment” is integral to their business and public image. This policy has an impact on several different stakeholders of the company. A few include:

Management – Shell’s management is actively involved in the D&I policy, from initial implementation by executive leaders to continuous execution on a day to day basis. On several occasions, the case study mentions the senior leaders or senior managements responsibilities in the program. For example, “Senior leaders were asked to embed D&I in all formal communications” the reason was to “exhibit sufficient reference from the top of the house so that people are confident that D&I is a priority” (RDS Case, pg 10). Our textbook constantly mentions the importance of the tone at the top of an organization. Chapter 4 has an entire section on both effective and ethical leadership. RDS clearly understands this concept based on their strategy of putting D&I into practice. Further, the case brings up the “targets, not quotas” that managers were suggested to follow. These requirements pushed the managers and influenced many of the decisions they made. It’s important to note that the “D&I targets were not linked to managers’ bonuses” (RDS Case, pg 6). This is opposite of Wells Fargo’s major flaw and could be a reason for some of the success the D&I program has experienced. Finally, it is necessary to recognize that the restructuring plan will eliminate a significant number of staff at senior levels and in managing positions. Even though they’re the ones enforcing the policy and making changes to their teams, the managers are not necessarily “safe.”

Employees – RDS’s employees are definitely stakeholders that are impacted by the events described in this case. First and foremost, as mentioned in the previous section, because of the changes within the company and its market performance, thousands of employees were taken off of the payroll. Specifically, the employees are effected by the Diversity and Inclusion policy. They are able to partake in mentoring programs, technical and educational courses offered, an understanding environment, and promotional opportunities within the company. Those employees that are diverse obviously benefit most from the policy and are presented with the most favorable circumstances. The company definitely wants to be seen in the best light possible so that their employees will stay at the organization long-term and bring the most value to the business.  Based on Exhibit 9 and the feedback given by RDS’s workforce on the inclusion program, it appears that overall it has been fairly successful (RDS Case, pg 21).

Local Communities – RDS has a presence in almost 100 countries around the world (RDS Case, pg 2), with around 102,000 employees, including their downstream and upstream businesses. With that large of a “footprint”, the company clearly makes an impression on the communities and areas in which their organization is located. RDS is focused on diversity and inclusion, at times this means transferring employees to “remote” or different locations than they are used to. These employees must first find places to live and then will spend their hard-earned money at local businesses – this helps the economy of those cities. The case gives an example of this in the development and mentoring section. The company sent “an unmarried woman, traveling alone, to live in a remote location and work in a male dominated industry… we arranged her accommodations and made sure she understood the reservations that people might have” (RDS Case, pg 9). With these actions, and the nature of the business, RDS effects the local communities, making them a stakeholder.

Job Candidates – Another stakeholder impacted by RDS’s Diversity and Inclusion policy are those that are applying for jobs and promotions within the company. Clearly the company is committed to hiring a diverse workforce. The case states that “Shell set guidelines for the recruitment of young graduates: every business or country should recruit at least 28% female graduates in technical positions and 50% in all commercial positions” (RDS Case, pg 7). Further, it reads “you may have qualified staff, but they might be white male Americans. You’re going to reach down, pick somebody up and put them in a job that they might not be ready for” (RDS Case, 8). This means that there could be several candidates that are the better fit for a position, but the more diverse applicant is the one that gets the job. This decision and the overall policy at RDS influences the lives of the job candidates that do and do not get the final offer.