GLOBALIZATION: THE ROLE OF MULTINATIONAL CORPORATIONS IN NIGERIA

0
98

ABSTRACT

This research work titled “Globalisation: The Role of Multinational Corporations in Nigeria” was necessitated by the controversy about the role of multinational corporations in Nigeria.  Hence, this study will attempt to resolve this controversy by determining their contributions to the econ9omic and technological development of the country.

The research work is divided into five chapters.  Chapter one introduces the topic under discussion.  Here effort was made at giving a brief but general history of globalization, the activities, operations and roles of MNCs in Nigeria.  The problem of the study was stated as well as the objectives.  Also in this chapter, the research questions were formulated and terms defined.

Chapter two reviews some literature of relevance to the study.  Chapter three discusses research methodology, where the procedure for data collection and analysis were stated.

The data collected from the field were presented, analysed and interpreted in chapter four.

Chapter five is the concluding chapter.  Here, the findings of the study were highlighted and discussed. A summary of the study was given, recommendation was made and a conclusion of the findings drawn.  The suggestions for areas of  further study/research was made.

TABLE OF CONTENT

Title page                                                                                                                    ii

Certification                                                                                                                iii

Dedication                                                                                                                  iv

Acknowledgment                                                                                                       v

Abstract                                                                                                                      vi

Table of contents                                                                                       vii

CHAPTER ONE:  INTRODUCTION

  1. Background of the study                                                                                1
  2. Statement of the Problem                                                                               7
  3. Objective of the Study                                                                                   8
  4. Research Question                                                                                          9
  5. Research Hypothesis                                                                                       9
  6. Scope of the Study                                                                                         11
  7. Limitations of the study                                                                                 11
  8. Significance of the study                                                                                12
  9. Definition of terms                                                                                         14

References                                                                                                      14

CHAPTER TWO: REVIEW OF RELATED LITERATURE

  • The Concept of Globalization                                                            15
  • Brief History of Multinational Corporations in Nigeria                    17
  • Inducement factors into Multinational Corporations                21
  • Entry Strategies into Multinational Business                         22
  • Environmental Factors affecting MNCs                              22
  • Globalised Economic Environment                                      
  • Social and Cultural Environment                                                               26
  • Political and Legal Environment                                                              29
  • Technological Environment                                                                      31
  • Application of Managerial Functions in Globalisation of MNCs   31

2.7.1    Planning in the MNCs                                                                               32

2.7.2    Organisation of the MNCs                                                                       33

2.7.3    Staffing of the MNCs                                                                               33

2.7.4    Controlling in the MNCs                                                                          35

2.8       Management Policies and Strategies of the MNCs                                 36

2.9       Benefits of MNCs to host countries                                                       36

2.10     Criticisms of Globalisation and MNCs in Nigeria                                 38

2.10.2  Summary of the Review of the Related Literature                                40

References                                                                                             43    

CHAPTER THREE:  RESEARCH METHODOLOGY

  • Introduction                                                                                                    45
  • Research Design                                                                                             45
  • Population of the study                                                                                  46
  • Sampling procedure                                                                      47
  • Sources of Data                                                                                              48

3.5.1    Primary Data                                                                                           48

3.5.2    Secondary data                                                                                   49

3.6       Data Presentation and Analysis                                                  49

3.7       Validity of Data                                                                                              49

3.8       Reliability of Data                                                                                          50

            References                                                                                                      51

CHAPTER FOUR:  DATA PRESENTATION AND ANALYSIS

  • Introduction                                                                                                    52

4.2       Presentation of Data                                                                         52

4.3       Interpretation of Data                                                                  53-60

            References                                                                                                      61

CHAPTER FIVE:   SUMMARY OF FINDINGS,  RECOMMENDATIONS

 AND CONCLUSION

  •     Summary of findings                                                               62

5.2      Discussions                                                                                                      63

5.3       Recommendations                                                                             65

5.4       Conclusions                                                                                     67

5.5       Suggestions for further studies                                                       68

            Bibliography                                                                                                   70

CHAPTER ONE

INTRODUCTION

1.1     CONCEPT OF GLOBALISATION

Globalization refers to the process of the intensification of economic, political, social and cultural relations across international boundaries. It is principally aimed at the transcendental homogenization of political and socio-economic theory across the globe. It is equally aimed at “making global being present worldwide at the world stage or global arena”. It deals with the “increasing breakdown of trade barriers and the increasing integration of World market (Fafowora, 1998:5). In other words, as Ohuabunwa, (1999: 20) once opined:  Globalisation can be seen as an evolution which is systematically restructuring interactive phases among nation

ns by breaking down barriers in the areas of culture, commerce, communication and several other fields of endeavour.

Globalisation, according to Ohiorhenuan (Ibid), is the broadening and deepening linkages of national economies into a worldwide market for goods and services, especially capital. As Tandon (1998B: 2) once opined, globalisation seeks to remove all national barriers to the free movement of international capital and this process is accelerated and facilitated by the supersonic transformation in information technology. It is principally aimed at the universal homogenisation of ideas, cultures, values and even life styles (Ohiorhenuan 1998: 6) as well as, at the deterritorialisation and villagization of the world. Expanding this argument, Gordimer (1998), argued, that it is principally concerned with the expansion of trade over the oceans and airspace, beyond traditional alliances which were restricted by old political spheres of influence. Thus, it presupposes the “making or remaking” of the world (Diagne and Ossebi. 1996) by creating “a basic change in the way in which major actors think and operate across the globe” (Biersterker, 1998). In other words, it connotes “the rapid expansion through giant multinational companies of capitalism and their “blood sapping principles” of “liberalisation”, “commercialisation”, privatisation” and “undemocratic and property-based democratisation” to several areas of the world including where it had hitherto been resisted or put in check” (Madunagu, 1999, 53).

Multinational Corporations

Oxford Dictionary of economics (2003:310) defines Multinational Corporations as a firm conducting business in more than one country, through branches or subsidiary companies. The Penguin Dictionary of economics (1980:315) defines Multinational Corporations as a company, or more correctly, an enterprise, operating in a number of countries and having production or services facilities outside the country of its origin. A commonly accepted definition of an MNCs is an enterprise producing at least 25 per cent of its world output outside its country of origin.

The ways Multination Corporations are conceptualised have important implications for the claims of stakeholders. This is more so in view of the growth of huge multinational corporations (MNCs) worldwide and the implications of their operations in different jurisdictions. This work focuses on non-shareholding stakeholders, employees and the community in particular; whose position in relation to the corporation as this work  demonstrates is largely dependent on the conception of the corporation. The work examines the role of MNCs in Nigeria against the background of the dominant theoretical construct of the corporation in the country. The work argues that because of their enormous economic power, which has been a subject of considerable debate, the dependency of the economy of the host country on their operations, their shareholding structure and because of the nature of the resources they exploit MNCs cannot justifiably be construed as private actors. This research further shows the consequences of the conception on corporations whose home states is in the E.U and therefore are largely construed as social institutions but when operating in an environment like Nigeria assumes a different role. 

The Multinational Corporations take its principal decision in a global context and thus, often outside the countries in which it has particular operations. The rapid growth of these corporations and the possibility that conflict might arise between their interest and those of the individual countries in which they operate have provoked much discussion in the recent years. While Multinational Corporations present some legal and organizational problems, many firms find it worthwhile. It brings them closer to the suppliers and the markets, they also take advantage of international difference in resource and cost, the benefits and development can be spread over wider markets, and it gives a wider spectrum  of risks. Multinational operations also improve their bargaining position in negotiating with national suppliers’ government, and trade unions.

          During the past three decades, the would had witnessed the growth of an economic phenomenon. The Multinational Corporations (MNCs), hick and through one of exporting, licensing, franchising, joint venture, foreign branch or wholly owned subsidiaries.

          While the MNCs is not new, its importance, power and consequences have come to be appreciated fully only recently. For instance, consider the role of Multinational oil companies in the economic systems of the world in general and Nigeria in particular. According to Megginsion, et al (1988:603), “MNCs 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 (1985:490) could not agree with this view more, when he said that, huge corporations like MNCs, 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 manager have to formulate or device separate policies and strategies to survive in different environments.

          Though it is the responsibility of a country’s government, like that of development, but government’s resources more often than not, appear inadequate to discharge those obligations, effectively. And Megginson, et al (1988) maintain that “MNCs 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 operate. For example in a typical year, the combined sales of Exxon, general Motors and Royal Dutch and 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 MNCs 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.

          These social expectations and demands and other intricate issues in multinational business, as stated earlier; pose great challenges to the management of MNCs. For example, any disruption to their operations as a result of crises between the company and the host country/community, like the Ogoni-Shell dispute, will be detrimental to especially the interest of the company and the other interest groups. Therefore, multinational managers have to strike a rather difficult balance between meeting societal expectations and demands.

          Multinational corporations have been praised by many people as agents of social, economic and technological development of their host countries. On the other hand, however; other people feel and regard MNCs as instruments of exploitation in their host countries. These two views are based on the extent to which the MNCs have met the societal expectations and based on the extent to which expectation and demands, in their environments.

          There are many of such corporations operating in Nigeria. They are mainly American, European, or Asian corporations and they are into high technology areas such as Agriculture, construction, Mining, Manufacturing etc. some of them are Cocoa-cola, Mobil, Julius Berger, Pfizer, Shell ITT, Glaxo, Klm etc. Expectedly, there are diverse opinions regarding their impact or role in the country. Therefore, this research intends to present a clearer picture of their actual role Nigeria.    

STATEMENT OF THE PROBLEM

GLOBALIZATION: THE ROLE OF MULTINATIONAL CORPORATIONS IN NIGERIA