INTERNATIONAL BUSINESSS MANAGEMENT – AN ASSESSMENT OF THE ROLE OF MULTINATIONAL CORPORATION IN NIGERIA
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INTERNATIONAL BUSINESSS MANAGEMENT – AN ASSESSMENT OF THE ROLE OF MULTINATIONAL CORPORATION IN NIGERIA
Chapter one
Background of the study
1.1 Introduction
Regardless of whether a firm is national or domestic, there is literally an entire world out there to deal with. Imagine if Coke (a Coca-Cola product) is sold all over the world.
American Motors builds Jeeps in Japan, and scores of Boeing jetliners fly for other countries’ airlines. Peugeot is built in Nigeria; you may carry a Sony portable radio, drive a Toyota, and wear Italian shoes in Nigeria or anywhere else in the globe. They all provide proof or evidence of international business.
Over the last three to four decades, the globe has witnessed the rise of an economic phenomenon known as the multinational corporation (MNC). According to Hicks and Gullet (1981), multinational corporations engage in international business by one or more of the following: exporting, licencing, franchising, joint ventures, foreign branches, or wholly owned subsidiaries.
Although the MNC is not new, its relevance, strength, and repercussions have only just become fully understood.
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Consider the huge influence that large multinational oil companies play in the global economy, particularly in Nigeria. To emphasise this argument, consider what L.A. Amu, a former Managing Director (MD) of NNPC, said about Nigeria’s economy.
“The Nigeria economy can largely be described as one with a strong petroleum industry superimposed over an undeveloped industrial base” . This is a testament to the positive impact of multinational oil companies in the Nigerian economy. Because without the oil firms, there would have been no oil or petroleum business in the first place.
As Megginson et al. (1988) put it “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) disagreed with this viewpoint, claiming that large firms such as MNCs play crucial political and social responsibilities in their communities in addition to economic ones.
For obvious reasons, global company has its own unique characteristics. It involves multiple countries. Therefore, it is
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influenced by several environmental elements in these countries. As a result, worldwide company management, or multinational management, is both unique and hard. To survive in a diverse environment, multinational managers must develop or devise distinct policies and tactics.
Though it is the role of a country’s government, such as Nigeria’s, to emulate policies and activities for socioeconomic growth and development, governments’ resources frequently look insufficient to carry out those tasks efficiently.
According to Megginson et al. (1988), multinational corporations are more than just large economic units.
In many situations, they function as a type of government, with greater wealth and influence than some of the countries in which they operate. For example, in a typical year, Exxon, General Motors, and the Royal Dutch Shell Group’s combined revenues exceeded the GNP of the majority of the world’s industrialised nations.”
As a result, it is not unreasonable for society to demand and press big multinational corporations to play an important part in the socioeconomic
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Development of their host country. At the very least, they should strive to meet their corporate social duties. Meginson et al. (1988) explain it thus way. “Today’s international business firms are expected to contribute to the host nation’s economic growth and development while also producing a profit for their owners.”
What they are arguing is that multinational corporations should not only be concerned with profit maximisation in their host countries, but should also take on other duties that help society.
As previously noted, these societal expectations and demands, as well as other complex difficulties in multinational business, present significant challenges for MNC management.
For example, any disruption to their operations caused by a conflict between the corporation and the host country/community, such as the Ogoni-Shell disagreement, will be detrimental to the company’s interests and those of other parties.
As a result, multinational managers must find a tough balance between meeting societal expectations and needs while still meeting other commercial obligations.
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Many individuals hail multinational corporations as agents of social, economic, and technological growth in their host nations; on the other hand, some consider MNCs as instruments of exploitation in those countries.
These two points of view are based on how successfully the multinational corporation has satisfied both societal and corporate expectations and demands in its setting.
There are numerous similar corporations functioning in Nigeria. They are primarily American, European, or Asian firms that operate in high-technology industries such as agriculture, construction, mining, and manufacturing.
Some of these include Coca-Cola, Mobil, and Julius Berger. Pfizer, Shell, GlaxoSmithKline, and KLM, among others. Expectedly, there are differing perspectives about their impact or position in the country.
As a result, the purpose of this research is to provide a clearer image of their actual function in Nigeria, which has been ongoing for some time. Regardless, Nigeria remains technologically underdeveloped.
Second, most MNCs have been reported to hire home-office personnel (expatriate managers) to fill critical positions.
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