SHALLEM MINING COMPANY CHALLENGE

Stakeholder
A stakeholder is defined as any individual or group who can affect or is affected by an
organisations achievement. Similarly, another school of thought explains it as a group
without whose support an organisation would cease or exist. The above definition can be
argued differently, however, the basic point that can be established is that the stakeholder
plays an important role in the establishment and running of an organization. Some groups
of stakeholders include employees, investors among many others. That said, stakeholders
can be classified under internal or external as well voluntary or involuntary.
In the Shallem case study, the stakeholders of the organisation are the people in the
community in which they operated. These stakeholders are external as well as involuntary.
This is because they do not form an integral part of the organisation and do not have a choice
of accepting or declining to be stakeholders due to their geographical location relative to the
company.
Stakeholder theory
This theory states that all stakeholders must be considered in the decision making process
of the organisation.
This theory somewhat legalizes the activities of Corporate Social Responsibility of
organisations. This is because instead of starting with a business and looking out into the
world to see what ethical obligations are there, stakeholder theory starts in the world. It lists
and describes those individuals and groups who will be affected by (or affect) the company’s
actions and asks, “What are their legitimate claims on the business?” “What rights do they
have with respect to the company’s actions?” and “What kind of responsibilities and
obligations can they justifiably impose on a particular business?” In a single sentence,
stakeholder theory affirms that those whose lives are touched by a corporation hold a right
and obligation to participate in directing it. This lists out three reasons why this theory is of
paramount important:
 It is morally and ethically correct way to behave
 It benefits the company
 It reflects what actually happens in an organisation

One way to think about the work developed under the banner of stakeholder theory is to see
it as providing a normative justification for the theory and its associated activities. Such an
activity is usually thought of as the domain of philosophers, who seek to develop complex
and sophisticated arguments to show how a given idea or activity can be defended using
normative reasons—notions of what should be the case. Stakeholder theory is a genre of
theories capable of encompassing a variety of normative cores. Normative cores are an
explicit effort to answer two questions facing all corporations. First, what is the purpose of
the firm? And second, to whom does management have an obligation?
The Shallem case study clearly depicts that the organisation consulted the Chief of the town
as well as the DCE in carrying up of mining activities. The company took the pains in
organising meetings with the heads in order to find out how to contribute their quota to the
community. This is a practicality of what the stakeholder theory seeks to achieve.
The entirety of the theory was not considered however, the theory clearly states that ‘’all’’
stakeholders need to be considered. Thus it only holds when every stakeholder’s view or
consent is obtained before a decision is taken. Shallem overlooked the existence of the
Protectors of our Heritage (POH) group even though they form part of the stakeholder. The
adherence to a theory is either in its totality or not at all. These stakeholder activities taken
in a holistic manner raises the trust level of beneficiaries, the trust of the POH group was
not attainable due to they being neglected in decision making, this prevented the group from
vouching for the company during their times of hardship.

Sustainable Development
Sustainable development can be defined as the act or process of growth that meets the needs
of the present without compromising the ability of the future generation to meet their own.
Sustainable development is about integration: developing in a way that benefits the widest
possible range of sectors, across borders and even between generations. In other words, our
decisions should take into consideration potential impact on society, the environment and
the economy, while keeping in mind that: our actions will have impacts elsewhere and our
actions will have an impact on the future.

Sustainable development is also a means for considering the relationships of things to each
other in order to propose viable solutions. It is a way of forcing ourselves to look at factors
we might rather ignore in favour of short-term benefits, it might be useful, then, to see the
advent of sustainable development as a significant change in how people and governments
perceive their activities, their roles and responsibilities: from primary emphasis on
increasing material wealth to a more complex, interconnected model of the human
development process. Sustainable development is therefore: a conceptual framework: a way
of changing the predominant world view to one that is more holistic and balanced; a process:
a way of applying the principles of integration – across space and time – to all decisions;
and an end goal: identifying and fixing the specific problems of resource depletion, health
care, social exclusion, poverty, unemployment, etc.

At the core of sustainable development is the need to consider “three pillars” together, these
are: society, the economy and the environment. No matter the context, the basic idea remains
the same – people, habitats and economic systems are inter-related. We may be able to
ignore that interdependence for a few years or decades, but history has shown that before
long we are reminded of it by some type of alarm or crisis. The fact of the matter is that we
depend on ecosystems and the services they provide in order to do what we do: run
businesses, build communities, feed our populations and much more. Whether we consider
the more obvious, immediately vital examples – the need for soil that can grow food or for
clean water to drink – or the less obvious but equally significant things like oxygen
production during photosynthesis or waste processing by bacterial decomposers, we cannot
avoid the conclusion that we depend on the environment for our existence. If we damage or
destroy the capacity of the environment to provide these services, we may face
consequences for which we are completely unprepared.

How Shallem’s activities contradicts the principle of Sustainable Development

 Deterioration of land due to improper waste management

The inability of the organisation to provide proper waste management in times of
accidents such as oil spillage left some part of the land infertile thus rendering it
useless for any farming activities for current and future generation.

 Lack of maintenance of infrastructure projects

The organisation after putting up infrastructure for the use by the town folks did not
see to its maintenance neither were there trainings on how to carry out these
activities in order to preserve them. This led to the destruction of these projects and
could not suffice for future.

 Misuse of land reserves for organisational activities

The land reserves that were left for farming activities after the mine has exceeded
its mine life was used for the organisational activities. This would greatly affect the
community’s future in terms of their farming activities.

 Lack of beneficial training projects for town folks

The alternative livelihood activities that the company introduced to members of the
community were not in its sense beneficial. These activities generated money for a
short period of time thus neglected generations yet to come.

Averting Shallem’s negative outcome

In the case study, Shallem took certain actions and inactions that led to its collapse. Some
of these could have been done in a different manner so as to prevent these consequences.
Some of the ways include:

 Acknowledging the presence of POH

In the early periods of the organisation, management should have taken it upon
themselves to win the trust of the members of POH. This is because this group was
bent on revealing the scheming activities of the organisation. However, if activities
and decisions taken were passed through members of the POH as well, they would
have identified decisions that were beneficial and relevant to the community.

 Investing more in the youth of the town

As the saying goes, the future tomorrow lies in the hands of the youth. It was
therefore very pertinent of the organisation to recognise and involve the youth in
their activities. Most of the CSR activities should have been invested in developing
the youth. If this was done, the youth of the town would have gained more
knowledge and skill to take up work opportunities in the company.

 Interaction with all members of the town and not only chiefs and DCE
The major mistake of the management of this company can be said to be its sole
involvement with the Chief and DCE. It is customarily right for these leaders to be
 consulted however, the involvement of the entire town would have spoken volumes
of the organisation. Thus, the trust of the people would have been obtained and
better decisions would have been taken to avert the collapse of the company.

 Resorting to an amicable way of settling discrepancies

The decision taken by the organisation to arm themselves was the last straw that
broke the camel’s back. Violence solves no problem it rather creates more as no
constructive decision can be taken in the heat of violence. The company could have
had a meeting with members of the town and their leaders and settled the
misunderstanding instead of resorting to violence.

 Carrying out proper PR activities

The company should have made it a point to address the company openly during
the time of hardship and difficulty so as to restore the hope of the people. Their
inability to address the people led to various interpretations of the issue at hand thus
the cause for fear and panic.

 Making organisational activities transparent to town folks

In the bid of the company to be fully accepted by members of the town it would
have been of great help for their activities to be as transparent as possible. This helps
eliminate any form of shadiness from the minds of the people.