The impact of corporate social responsibility on strategic management of reputation risk: The case of the petroleum industry

Evangelia Fragouli, Sasa Seidu

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Abstract

The petroleum industry is institutionally complex and its operations are integrated across the entire supply chain. In case of accidents, there are always major economic losses and serious environmental consequences which can damage the reputation of the companies. This makes reputation risk management very important and a major priority for the petroleum industry as it has the potential of erasing the business of any company in the industry. As a policy strategy, CSR plays significant role in shaping the perceptions of stakeholders about the activities of companies, hence has the potential of protecting companies against reputational crises. This study aims to critically examine the role CSR plays in Reputation Risk Management in the petroleum industry. It investigates and critically analyses Reputation Risk Management policies and the influence CSR initiatives have on stakeholders. After a general background introduction to the petroleum industry, it discusses the nature of reputation and reputation risk management, highlighting the existence of policy issues and the approach adopted in managing reputation risk in the petroleum industry. The study combined both quantitative and qualitative research methodologies. The findings reveal that reputation is driven by regulatory compliance, strong financial performance, employees and customer satisfaction, good corp orate governance and leadership. It findings also show that being corporate responsible and insuring effective communication can drive reputation. A further investigation reveals that CSR programs implementation lead to the generation of these driving factors. However, analyses of responses show that reputation management depends on these benefits indicating that CSR as a policy strategy plays a significant role in RRM. In this regard, the study concluded that CSR initiatives can positively influence the desire to manage the reputation of companies in the petroleum industry. The study in it capacity as an empirical research recommends CSR as a holistic approach capable of building an everlasting reputation for companies within and outside the petroleum industry and therefore calls on companies to fully adopt CSR as a risk management strategy.
Original languageEnglish
Pages (from-to)1-29
Number of pages29
JournalInternational Journal of Advances in Management, Economics and Entrepreneurship
Volume5
Issue number5
Publication statusPublished - May 2018

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