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Multinational Corporation As a Catalyst Of Nation Building In The Third World Countries. (The Nigeria’s Experience)

Abstract

This study was on multinational corporation as a catalyst of nation building in the third world countries ( the Nigeria experience). The total population for the study is 200 staffs of selected multinational companies in Lagos state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made HRMs, production managers, administrative staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

Chapter one

Introduction

  • Background of the study

Multinational corporations (MNCs) have acquired a number of nomenclatures through the years, such as “transnational enterprise” (corporation) (Poon & Sajarattanochote, 2010, p. 291; UNCTAD, 2002, p. 291), “international corporations” or firms, “global corporations” (Wang, and Chen, 2015, p. 78; and “denationalised corporations” “supranational” and “cosmocorporations” (Kuşluvan, 1998, p.163). Despite the varying descriptions, there is near consensus among scholars that MNCs have existed for several years, dating back to the 18th century, and that they are enterprises that own or possess income-generating assets in more than one country. They include firms with both equity and contractual involvement in more than one country, as businesses have become more diffused in a globalising world in which the trend and emphasis is a knowledge and technology-driven society. A general conceptualisation of a multinational is an enterprise which has some equity investment or contractual involvement such as management contracts, franchising, and leasing agreements in more than one country (see Kuşluvan, 1998, p. 168). Scholarly discourse on MNCs revolves around a number of themes, however, the focus of this study in on the effects of multinational activities on host countries’ skills development as exemplified by Nigeria.  A typical multinational corporation normally functions with a head quarter that is based in one country, while other facilities are based in the host country.  In   some circles, a multinational corporation is referred to as the multinational enterprise (MNE) or a transnational corporation (TNC) (Tatum, 2010).  They enter host countries in different ways and different strategies.  Some enter by exporting their products to test the market and find out whether the existing products can gain sizeable market share. For such firms, they rely more on export agents. These foreign sale branches or assembly operations are established to save transport costs. This is because there is a limit to what foreign exports can achieve for a firm owing to tariff barriers and quotas. Most of the firms are encouraged by low wage rates and other environmental factors.

During the past three to four decades, the world has experienced the growth of an economic phenomenon the multinational corporation (MNC). Hicks and Gullet (1981), maintain that MNC are involved in the international business, through one exporting, licensing, franchising, joint venture, foreign branch or wholly owned subsidiaries. Whole the MNC is not new, its importance, power and consequences have come to be appreciated fully only recently. For instances, consider the significant role that large Multinational Oil Companies are playing in the economic systems of the World in General and Nigeria in particular. To press home point, hear what a former Managing Director (MD) of NNPC L.A. Amu, said about Nigeria economy. “The Nigeria economy can largely be described as one with a strong petroleum industry superimposed over an undeveloped industrial base”. This is a kind of testimony of the positive role of Multinational Oil Company in Nigeria Economy. For without the oil companies, there would not have been an oil or petroleum industry in the initial place. According to Megginson, et al (1988) “MNC are more than just giant business firms, for they tend to have social, and even political effects as well as economic ones in their host countries”. KINARD (1985) could not agree with this vie, when he said that huge corporations like MNC, play not only economic roles but also important political and social roles in their environments. For obvious reasons multinational business has its own peculiarities. It involves different countries. Hence, it is influenced by different environmental factors in these countries. Therefore international business management or multinational management is equally peculiar and challenging. Multinational managers have to formulate or device separate policies and strategies to survive in the different environment. Though it is the responsibility of a country government, like that of Nigeria to imitate programmes and actions for her socio-economic growth and development, but governments’ resources more often than not appear inadequate to discharge those obligations effectively. Megginson et al (1988) maintain the “MNC are more than just giant economic units. In many cases, they are nearly a form of government, richer and more powerful than some of the countries in which they are operate. For example, in a typical year, the combined sales of Exxon, General Motors and Royal Dutch Shell Group exceeded the GNP of most industrialized nations of the World”. Hence, it is not out of place for society to expect and press these MNC to assume a key role in the socio-economic development of their host countries. At least if for nothing else, they should endeavour to live up to their corporate social responsibilities. Meginson et al (1988) puts it this way. “Today’s international business firms are expected to contribute to the host nation’s economic growth and development as well as to produce a profit for the owners’. What they are saving is that MNC should not only be interested in profit maximization in their host countries, rather, they should equally assume other roles that will benefit the society as well. Multinational corporations have been praised by many people are agents of social, economic and technological development of their host countries on the other hand, however, other people feel an regards MNC as instruments of exploitation in their host countries. These two views are based on the extent to which the MNC have met the societal expectations and demand as well as business expectations and demands, in their environment

Statement of the problem

However the role of multinational companies includes contribution to government revenue through the payment of corporate tax, the non statutory role which they discharge sometimes as a public relations effort to come across good corporate citizens, community, contribution to foreign exchange earnings through export drives or the provision of some infrastructure eg schools, health services etc, decrease in unemployment problems and in equal of income distribution, improvement in balance of payment, increase in foreign earnings, transfer of technology, improvement in standard of living, capital accumulation, changing pattern of tertiary industries, a shill of the labour force away from Agriculture growth in the manufacturing segment up to the point that per capital income increases. These results are possible because of the immense resources available to these multinational corporations in their operations across national boundaries and will be of immense benefit to countries who have developed policies and enacted laws, regulations and rules to control and to attract these companies and their investment.

Objective of the study

The objectives of the study are;

  1. To ascertain whether the multinational corporation in Nigeria are social responsible.
  2. To examine the role of multinational corporations towards economic growth of Nigeria.
  3. To identify the factors determining the growth and success of multinational corporation in Nigeria.
  4. To ascertain the role of multinational corporation in nation building

Research hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: There is no role of multinational corporations towards economic growth of Nigeria.

H1: There is role of multinational corporations towards economic growth of Nigeria.

H02: There are no factors determining the growth and success of multinational corporation in Nigeria

H2: There are factors determining the growth and success of multinational corporation in Nigeria

Significance of the study

 This study will be a great significance because; it will put improper focus and will create awareness on the real role of MNC in Nigeria. It will show whether they are helpful or harmful to the nation. The findings will be useful to both government and the management of MNC in future development planning. Also it will be beneficial only social researchers, environmentalists, but students in international business management and academicians generally.

Scope and limitation of the study

The scope of the study multinational corporation as a catalyst of nation building in the third world countries (the Nigeria experience). The researcher encounters some constrain which limited the scope of the study;

  1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
  2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 DEFINITION OF TERMS

Multinational corporations (MNCs): Multinational corporations (MNCs) and multinational management. Kinard (1988) defined multinational corporations (MNCs) as business firms that produce and 24 market goods and services in more than one country. They include giants such as shell, UTC, Royal Dutch, Coca-cola etc.

Economic development: – A term used to describe the growth of aggregate output of a country and the growth in per capital output of a nation.

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