Theory to Practice

Building projects for local communities

The adjustment of value share to the local needs, together with the just division of value is the best approach that can be adopted by multinational companies executing projects across the globe.

The context

The emergence of community inclusiveness practices actioned by organizations that operate in the petroleum industry in developing countries has been considered by multinational companies for a few decades, making value share the regular features of projects in petroleum industry and turning these multinational companies as the champions of community engagement.


But these practices are not always positively perceived by the local communities. In fact, as a result of local communities’ dissatisfaction from the value shared with them, in some parts of the world grassroots protests and resistance to organizations are escalating dramatically in terms of intensity and scale.


In investigating these trends, extant research is bounded with at least two limitations:


  • First, most studies adopt an organization centric approach. That is the extant research tends to make organizations vocal and under-represents the voice of stakeholders. Consequently our knowledge from the stakeholders setting is skewed: the voice of the stakeholders, in particular those with less power, ends up being unheard and underrepresented, yet we know a lot about what organizations want and do.
  • Second, organizations are always seen as autonomous entities, isolated from their surrounding environment and the stakeholders in there. By adopting this approach, the least powerful stakeholders are position in inactive roles, in which they have no chance to take part in decision-making processes that impact them directly. Among these stakeholders are local communities which often have undemocratic, non-negotiable development programs.


By adopting these approaches, organizations are routinely given more autonomy and power, while less powerful stakeholders, i.e. local communities, are marginalized.

The research

In my recent study, I adopted an approach that challenges the two assumptions that mentioned above and examined care-giving activities undertaken by organizations that operate in the oil and gas industry. The four cases I studied are located in three developing countries. I cross compared the lived experience of local communities of these four projects to understand how adoptation of autonomous or inclusive approach by the organizations can influence the lived experience of local communities of these projects.


My initial aim was to apply the stakeholder theory to explore how the behavior of organizations affects the way local communities perceive the development projects in question. However, my empirical observations on the activities of these two organizations, each with very different action plans, revealed that the viewpoints of local communities cannot be directly linked to the organizations’ stakeholder orientation.


This led me to interpret the empirical data through the lens of the ethics of care and ethics of justice, as theorized in Kohlberg’s model which holds that applying justice in moral reasoning necessitates developing the ability to think in the abstract. Borrowing again from Kohlberg, I used three levels of maturity that embody justice (here from the least to the most mature): moral constructs reflect individual needs; fairness in decision-making processes is anchored to a shared understanding of societal norms; and justice is embodied in certain universal principles.


Then I chose two organizations with two opposite and extreme orientations toward stakeholders: a multinational oil company (MNOC), headquartered in Europe, with extensive development plans for local communities backed by sizeable financial investments; and a national oil company (NOC), government owned, with no systematic development plan in the works.


For my methodology, I used triangulation to combine methods and data sources. Primary data consisted of 37 semi-structured interviews and visits in the field. I also ran an analysis on social media, searching for videos, news, tweets and articles on the cases I was studying.


Through contacts with activists, I reached out to members of the local communities, who preferred to answer my questions via voice recordings. Thanks to these interviews I learned about the conditions in the villages and relations with the organizations in question. Additional data sources included documents published by the organizations, notes from my field work, and articles and documentaries.


To make sense of my findings regarding the distribution of power between organizations and local communities, I analyzed empirical data while taking into account the hierarchical or decentralized structure of the organization at the local level.


My empirical analysis shows that the care process can be influenced by the power dynamics that dominate the stakeholder network. Through close communications with communities, the project decision makers at a local level find out what requests for care the local community has and report these requests to the organization, making it possible to develop more effective care services.

Conclusions and implications

  • This study underscores the success of a bottom-up approach when dealing with local communities, and casts light on the ability of large organizations to provide care for their distal stakeholders. In addition, my findings suggest that justice and care both have some useful characteristics which are complementary, socially constructed and not mutually exclusive.
  • I was able to observe that individuals with unequal power relationships such as employees and local communities are able to build a shared sense of belongingness to the community over time. By recognizing the multi-dimensionality of the organization, local communities and project personnel, and breaking down the predefined hierarchical roles into multiple identities, every individual was enriched. And every enriched individual got power from or gave power to other enriched individuals with similar relational selves.
  • The sense of belonging to a specific identity group brought stakeholders closer together, which resulted in power being more evenly distributed throughout the network.