The Influence Of Multinational Companies In The Economic Development Of Nigeria

 

ABSTRACT

 

 

The main focus of this research work is to examine the influence of multinational companies in the economic development of Nigeria.  MNC’s are agent of development in the sense that they constitute the source of capital investment, employment for the people, technological transfer etc.  However, many detest their existence because they are agents of exploitation of the people they came to develop.

In this regard, the objectives of this work is to ascertain the extent of involvement of multinational companies in the economic development of Nigeria using indices like employment provision, transfer of technology and to determine the political, socio-economic implications of their existence in Nigeria.  All these were discussed in the chapter one.

 

In chapter two, related literatures were reviewed.  The literature encompasses of people’s view on the activities of multinational corporations.

 

Chapter three consists of research design and methodology.  The source of data used were primary and secondary sources.  The primary sources include the use of oral interview and questionnaire while newspapers, journal, textbooks, symposia where sources of secondary sources.

 

In chapter four, the information collected were presented and analysed and the hypothesis were equally tested in which it was discovered that the MNC’s are not interested in Nigeria economic development but are interested exploiting the Nigeria’s economy.

 

In chapter five, the recommendation made, is that Nigeria should develop her own indigenous technology that will aid her in her search for economic development.

TABLE OF CONTENTS

 

 

 

Title page

 

Approval page

 

Dedication

 

Acknowledgement

 

Abstract

 

Table of content

 

 

 

CHAPTER ONE

 

INTRODUCTION

 

1.1            Background of the study

 

1.2            Statement of the problem

 

1.3            Purpose of the study

 

1.4            Significance of the study

 

1.5            Scope and limitation

 

1.6            Research question

 

1.7            Definition of terms

 

References

 

 

 

CHAPTER TWO

 

2.1            Review of related literature

 

2.2            Concept of multinational company

 

2.3            School of thoughts about multinational company

 

2.4            Impact of multinational company in the Nigerian Economy

 

2.5            Some problems of multinational companies

 

Reference

 

 

 

CHAPTER THREE

 

RESEARCH DESIGN AND METHODOLOGY

 

3.1            Design of the study

 

3.2            Selection of population

 

3.3            Sample size

 

3.4            Research procedure

 

 

 

CHAPTER FOUR

 

Presentation, analysis, and interpretation

 

4.1            Presentation, analysis, and interpretation

 

4.2            Test of hypothesis

 

 

 

CHAPTER FIVE

 

5.1     Summary of finding

 

5.2            Implication of findings & conclusion

 

5.3            Recommendation

 

5.4            Bibliography

 

5.5            Questionnaire

 

 

 

 

 

CHAPTER ONE

 

 

 

INTRODUCTION OF THE STUDY

 

In third world countries most people associated multinational companies with non-colonialism.  While the Euro-American nations described multinationals as the engine of growth in the underdeveloped countries.  These two opposing views about multinationals will help to examine what multinational corporations are all about.

 

To define multinational company Walshi L.S. made us to understand that a multinational company produces and sell at both home and abroad.  In fact, the essence of multinational is international production.  It involves a corporation in the establishment of subsidiaries.  From the foregoing, it become clear that there are several approaches in defining a multinational company.

 

 

 

Approach 1:        This approach tries the definition by emphasizing structural criteria such as the number of countries in which a firm is doing business, ownership from many nations, composition of the top management being nationals etc.  Another school of though in this approach defines it through stressing performance characteristics such as absolute control, relative earnings of shares, sales, assets, employees committed to foreign operation etc.

 

 

 

Approach 11:      Different schools of though in this approach address the issue by suggesting an evolutionary process of international to multinational, transitional and supranational organization, which can be diagrammed as follows:

 

 

 

 

 

 

 

International:      An organization is classified as international when the organization engages in foreign business but has made no direct investment.

 

Multinational:     A multinational organization is one that allocates resources without regard to national frontiers.  However, the organization is naturally based in terms of ownership and top management.

 

Transnational:    This is a multinational organization managed and owned by persons of different nationalities.

 

Supranational:    This is a transnational firm that is legally denationalized by becoming incorporated through an international agency.

 

Some of these multinational companies are General Motors, Guinness Nig. Ltd, Nigerian Breweries, Oil Companies, Nigeria Bottling Company, Beecham, M & B, UAC, and a host of others.  These above mentioned corporations have their headquarters in the United States of America and Europe with huge capital and assets based and technical skills extended to their respective countries where their branches are located.

 

The local branches are mere subsidiaries and are located mainly in under developed countries of the world.  The impact of these multinational have contributed to the improvement of the economics of such countries where they have their subsidiaries.  These corporations are believed to be facilitating the transfer of technology to the less developed countries, Nigeria in particular.  Ake (1981) is of the view that “the multinational scarcely have the appropriate technology to transfer” while Offions (1980) admits that they are capable of contributing to development.  He however argues that their malpractices wiped away any contributions that they have made.  This is why we say in “management that the multinationals blessings in disguised.

 

Guinness Nigeria Plc is a brewery company with many branches nationwide and its headquarter office situated in Lagos.  The company have a staff strength of over 15,000 workers and a large number of casual workers.  They manufacture Guinness Stout, Harp Beer, Guinness Malta, and the rest of others.  According to a research made to the company the major aim of Guinness is to impart knowledge to Nigerians, technology transfers and skill development that Nigerians can set up their own brewery industries to manufacture their own brands of beer.  Above all, Guinness have contributed health wise by establishing an eye clinic in Anambra state with (250,000) and handed over to the Anambra State Government.

 

In addition to these contributions Guinness have helped in no small measure in solving the problem of unemployment by employing workers in their various disciplines.

 

In summary, it has become very clear that multinationals have something useful to contribute to developing economy going by their contributions earlier discussed.  The nature and quality of these contributions will be ascertained as this study unfold.

 

 

 

1.2            STATEMENT OF THE PROBLEM

 

This study is therefore aimed at identifying problems that might hinders the efficiency and effectiveness of Guinness Plc.  In performing the stated aims in Nigeria with the view to suggest strategies by which they can be enhanced to become useful to Nigerians.

 

 

 

1.3            PURPOSE OF THE STUDY

 

The aims of this is to:

 

1.                 Investigate the role of multinational corporations Guinness Nigeria Plc in the development of the country.

 

2.                 Highlights ways Nigeria could maximize the benefits from the multinational corporations and minimize their negative and anti-development objectives.

 

 

 

1.4            SIGNIFICANCE OF THE STUDY

 

Since 45 years after political independence, Nigeria still remains a mono product export economy exporting only raw materials and crude oil.

 

Since Guinness Plc’s aim is to develop the country, how far has it achieved this aim?

 

How many people acquired the technological skills which its claims to transfer to Nigerians.  This study will expose to the policy makers and economic planners both at private and publics sectors the negative and positive effects of the company’s activities.

 

It will also help the government to re-structure there relationship with multinational corporations.

 

 

 

1.5            SCOPE AND LIMITATIONS OF THE STUDY

 

This study will generalize the role played by the different multination companies but will focus attention on Guinness Nigeria Plc to enable the research have accurate and careful examination of the study.

 

This study will also go a long way to highlight the parts played by multinational companies by studying how they are financed, how they make their profits and how the profits utilized the extent they have transferred their technological skills to the host country.

 

Finally, how they have helped in solving unemployment and other social responsibilities problems in Nigeria.

 

Some of the limitations that may have affected the results of this study are described below:

 

1.                 The results of this study may not be generalized since it is only one of the corporations that was studies out of the whole lot in Nigeria.  However, a global qualification is not necessarily the best approach to this study since much of the data will always remain hidden.

 

2.                 The researcher had problems in obtaining relevant data.  The company did not give enough data and relevant information and there is no appends Nigeria body of laws that compels them to do so.

 

3.                 The researcher had to combine full time academic study with the research work and this slowed down the pace of work.

 

 

 

1.6            RESEARCH QUESTION

 

1.                 To what extent does Guinness Plc helps in the development of Nigeria?

 

2.                 To what extent does Guinness transfers their technological skill to Nigerians?

 

3.                 How has Guinness help in creating job opportunity in Nigeria?

 

4.                 What constraints will hinder Guinness in their contributions to the economic development of Nigeria?

 

5.                 To what extent does the company attract government assistance?

 

6.                 To what extent does Guinness Plc re-invest their profit in Nigerian Economy rather than repatriating it abroad?

 

 

 

1.7            DEFINITION OF TERMS

 

1.       Multinational National Enterprises (MNE)

 

This is a cross border national business organisation or aggregate of organization that are aggregate of organization that are characterized mainly by the disposal of their managerial ability among several nations.

 

 2.      LDC’s

 

Less developed countries of the world.

 

3.       Trans-National Company

 

This is a multinational organization managed and owned by person of different nationalities.

 

 

 

4.       Supernatural

 

This is a transnational firm that is legally denationalized by firm that is legally denationalized by becoming incorporated through an international agency.

 

5.       Parent Company

 

A company, which owns and control foreign direct investment.

 

6.       Head Office

 

The central organization of the firm as posed to the foreign subsidiaries.

 

7.       Foreign Subsidiary

 

This is the corporate form, which represents the foreign direct investment..

 

8.       International Division

 

This is the part of the head office with a foreign geographical responsibility.

 

9.       International Management

 

The used of executive from any country operating away from their own.