Corporate Social Responsibility at Saudi Aramco (Research Paper Sample)

Corporate Social Responsibility at Saudi Aramco Student’s Name Institution Corporate Social Responsibility at Saudi Aramco Introduction Saudi Aramco, Saudi Arabia’s largest government-owned oil company, is also the largest oil producer in the world with a production volume of about 10.7 million barrels per day (bpd) (Gamal & Paul, 2018). The company’s current oil refining capacity stands at 4.9 million barrels, a figure estimated to increase to about 8 million bpd by 2030 as the production capacity rises to more than 20 million bpd (Gamal & Paul, 2018; Saudi Aramco, 2017). Saudi Aramco also remains the sole producer of natural gas in the Kingdom of Saudi Arabia, reporting an average production rate of 12.4 billion cubic feet of raw gas per day (scfd) and the distribution of 8.7 billion scfd in 2017 (Saudi Aramco, 2017b). Saudi Aramco currently owns proved reserves with over 332 billion barrels of crude oil handled by eight refineries, both domestic and international, and supplied to the company’s three major markets: Europe, Asia, and North America (Saudi Aramco, 2017). In line with its contribution to the economic welfare of the Saudi Kingdom, Saudi Aramco has welcomed corporate social responsibility (CSR) on a diversified scale leading to a well-developed system of community empowerment within the Kingdom. One of the company’s oldest programs, the home provision incentive of 1951, has endeavored to provide homes to over 64,000 Saudi Aramco employees (Ramady, 2018). Further, Saudi Aramco has funded a series of outreach and development programs tailored to empower the country’s future innovators by emphasizing science, technology, engineering, and mathematics (STEM) skills. The most recent of the STEM interventions was a joint program between Saudi Aramco, Xiamen University, and China Daily to support students at this university to pursue their interests in clean energy, sustainable development, greenhouse gas reduction, and approaches in entrepreneurship (Saudi Aramco, 2017a). The company reported that this collaboration created a platform for students in Xiamen University to nurture their innovations in energy management and environmental sustainability. Through this program, Saudi Aramco hopes to transform design concepts and innovations into practical ideas ahead of the objectives highlighted in the Saudi Vision 2030 plan. Saudi Aramco also cultivates a culture of CSR by providing support to entrepreneurship and other economically viable startup ventures within the Kingdom. The Wa’ed was the company’s idea of an “incubator” for nurturing local enterprises through funding and training in the Saudi region. Founded in 2011, the Wa’ed project was fuelled by the fact that entrepreneurship is one of the key drivers for innovation, economic growth, and employment creation in the country (“About us,” 2019). As of 2015, the Wa’ed initiative had approved and funded 18 entrepreneurial projects. In addition to the Wa’ed program, Saudi Aramco has also invested in other forms of initiatives that have focused on assisting the industrial sector: these include the Rabigh Plus Tech Park and Plas Chem Park. Saudi Aramco has also focused on the incentive of local community health and awareness. The Johns Hopkins-Aramco healthcare association was established in 2014 with the objective of promoting community healthcare through a cultured environment focused on personal growth and learning. The program offers innovative and patient-centered healthcare interventions to the Aramco’s workers among other beneficiaries in integrated healthcare. The program intermarries Saudi Aramco’s universal healthcare delivery structure which houses about 360,000 people, and the world-class clinical and research proficiency of Johns Hopkins (“Johns Hopkins Aramco Healthcare,” 2019). The program’s extension into Saudi Aramco’s healthcare network was, in part, actively endorsed by Saudi’s energy minister Khaled Al Falih who had previously worked for the Ministry of Health in the Kingdom. Following the establishment of Johns Hopkins-Aramco healthcare, Saudi Aramco’s CSR efforts in providing better healthcare has continued to expand. The Shamah Autism Center was the first of its kind established by Aramco and was designed to provide multidisciplinary healthcare for autistic children within the Eastern Province of the Kingdom. Saudi Aramco has also contributed much to the education sector. The iDiscover Knowledge incubation program oversaw a professional tour to schools for training on new teaching techniques in science and mathematics. The outreach captured 1000 teachers and eventually spread out to 15,000 students. Aramco employed a similar concept in the iSpark and iThra Youth programs which provided workshop practice in STEM disciplines to over 63,000 students in total. Other similar educational packages include the FABLAB-Dhahran which taught three-dimensional printing and robotics, the establishment of the National Industrial Training Institute and Saudi Petroleum Services Polytechnic, and the establishment of a high-end construction school called the National Power Academy. Finally, Saudi Aramco initiated plans to establish the National Training Center for Facilities and Hospitality Management which aims to train 5000 trainees by 2021 (Ramady, 2018). Saudi Aramco boasts an extensive CSR catalog and has been a central figure in community-based responsibility in the Kingdom and elsewhere internationally. Analysis Saudi Aramco’s mission statement cultivates a vision of becoming a world leader in the production of energy and chemicals while also focusing on profitmaking and sustainable development of the Saudi economy. Galpin, Whittington & Bell (2015) attested to the power of using mission statements to portray a company’s CSR intentions. They noted that a proper statement will strike a balance between social welfare and all other aspects in the company’s objectives. Three of the five sub-goals presented in Saudi Aramco’s mission statement directly address CSR: sustainable development through opportunities, technological development and innovation to nurture talent, and community empowerment (Saudi Aramco, 2019). Saudi Aramco thus succeeds in advocating for CSR through its mission statements while also remaining afloat with financial performance goals. Most of the activities in the energy and chemical production sectors directly perturb key concerns in globalization today: resource depletion, disruptive innovation, economic backstabs, environmental degradation, and a certain level of societal expectation. Collectively, these factors create the need to uphold CSR for companies which have international recognition. To understand the structures of CSR at Saudi Aramco, it is imperative to understand the national view of the concept. Saudi Arabia, one of the fastest growing economic powers in the world, maintains a highly politicalized view of CSR. Perceptively, while it has been reported that CSR is largely a charitable and philanthropic course in much of the Arab world, Saudi Arabia retains a different view: that CSR is more inclined towards being government regulated than charitable (Abro, Khurshid & Aamir, 2016). In fact, one stipulation regarding CSR in Saudi Arabia is that social accountability is integral to government obligation. Therefore, Saudi Aramco, being state owned, has a CSR structure largely steered by government policies which implement CSR guidelines while maintaining ethical responsibility in the company. A consequential outcome of government enforcement of CSR in companies is the idea of organizational conformance. In a phenomenon termed as organizational culture “greening”, Porter, Gallagher and Lawong (2016) demonstrated how various factors affected the inauguration of the sustainability discourse into an organization. They highlighted issues such as performance beliefs, change resistance, and prevalent macroculture which affected the integration of sustainability values into organizational culture. Therefore, enacting CSR implies implementing sustainability values which then calls for a modification of organizational values – Galpin et al. (2015) noted that company values are the only way managers are...