A new operational paradigm for oil operations in sensitive environments: an analysis of social pressure, corporate capabilities and competitive advantage

Against the historical and sociopolitical backdrop of foreign oil operations in Latin America and the competitive drive for greater access to new oil fields in sensitive areas, the oil industry finds itself rethinking traditional approaches to operations in these particular locations. Some firms have separately designed a new operational paradigm that proactively addresses their social and environmental impacts. Adopting this approach, the companies developed new internal capabilities. These new capabilities are examined within the framework of the natural-resource-based view of the firm. This framework is extended to account for the particular capabilities acquired by adopting the new operational paradigm in developing countries. This extended framework demonstrates that these firms may earn sustained competitive advantage through these capabilities. Proactive multinational oil companies may have greater access to sensitive areas than their competitors due to enhanced reputation. (Author)