COVER PAGE

IMPACT OF MULTI – NATIONAL COMPANIES IN ECONOMIC DEVELOPMENT OF NIGERIA
A CASE STUDY OF TEXACO NIG. PLC

BY

-----
BAM/PTE/H2001/005

DEPARTMENT OF PART TIME BUSINESS ADMINISTRATION & MANAGEMENT INSTITUTE OF MANAGEMENT AND TECHNOLOGY (IMT) ENUGU.

JANUARY 2017.

 

IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF HIGHER NATIONAL DIPLOMA (HND) CERTIFICATE IN BUSINESS ADMINISTRATION AND MANAGEMENT. 

DEPARTMENT OF PART TIME BUSINESS ADMINISTRATION OF MANAGEMENT AND TECHNOLOGY (IMT) ENUGU.

JANUARY 2017.

APPROVAL PAGE
This project has been approved for the Department of part time Business Administration & management for the Award of higher National Diploma (HND) certificate.

 

By
……………………………….                     ………………………………
MR. U.T.UGWU                                        DR. E.E. OGILI
PROJECT SUPERVISOR                          HEAD OF DEPARTMENT
PART TME

________________________                             ______________________
DR.E.E OGILI                                            EXTERNAL EXAMINER
DIRECTOR SDLCE

 

 

 

DEDICATION
This project is dedicated to my beloved family, who are the greatest source of my inspiration.
I Love you all.

 

ACKNOWLEDGEMENT
I sincerely than God for preserving my life and giving me the determination to complete this course of study in IMT despite the set – backs that I feced during the period.
I also wish to thank my supervisor --- Ugwu for the pains which he took while guiding me through this project work, and my Director, ... for providing a condusive academic environment for us to learn in the school and also for his fatherly advice on this project.
Thank to my family for their co-operation and assistance throughout the period of my struggle to pass through the school. I also wish to recognize the contributions of my good Friends in my set.
My God almighty continue to bless and keep us all, Amen

TABLE OF CONTENTS
COVER PAGE:……………………………………….   i
TITLE PAGE……………………………………………   ii
APPROVAL PAGE:…………………………………… iii      
DEDICATION PAGE:………………………………… iv
ACKNOW LEGEMENTS:……………………………v
TABLE OF CONTENTS:……………………………vi
LIST OFTABLE :……………………………………….vii
ABSTRACT:……………………………………….       viii

CHAPTER ONE
INTRODUCTION

• BACKGROUND OF THE STUDY
• STATEMENT OF PROBLEM
• OBJECTIVE OF THE STUDY
• RESEARCH QUESTIONS
• HYPOTHESIS
• SIGNIFICANCE OF STUDY
• DEFINITION OF TERMS

CHAPTER TWO
MULTINATIONAL CORPORATIONS AND ECONOMIC DEVELOPMENT OF NIGERI A THEORETICAL REVIEW

• THE CONCEPT OF ECONOMIC GROWTH & DEVELOPMENT OF MULTIRATIONAL COMPANIES IS NIGERIA.
• DEFINITION OF MULTINATIONAL CORPORATION AND BRIEF HISTORY OF MULTINATIONAL CORPORATION IN NIGERIA
• THE MOTIVES OF MULTINATIONAL CORPORATION
• MANAGEMENT OF MULTINATIONAL CORPORATIONS AND FOCUS ON OIL COMPANIEL
• LESSONS FROM THE TEXACO EXPERIENCES
• SUMMARY OF RELATED REVIEWD LITERATURE.

CHAPTER THREE

• METHODOLOGY
• DESIGN OF STUDIES
• AREA OF STUDY
• POPULATION OF STUDY
• SAMPLE / SAMPLING TECHNIQUE
• INSTRUMENT FOR DATA COLLECTION
• VALIDITY / RELIABILITY OF INSTRUMENT
• METHOD OF DATA COLLECTTION
• METHOD OF DATA ANALYSIS

CHAPTER FOUR

• TESTING FOR THE RELATIONSHIP BETWEEN THE MNSC AND THE GROWTH OF THE ECONOMY USING THE CORRELATION TECHNIQUE.
• TEST OF HYPOTHESIS USING THE 2-TEST TECHNIQUE (NULL HYPOTHESIS TESTING)

CHAPTER FIVE

• SUMARY OF FINDINGS
• CONCLUSION
• IMPLICATIONS OF THE STUDY
• RECOMMENDATIONS
• SUGGESTIONS FOR FURTHER STUDY
• LIMITATIONS OF THE STUDY
• REFERENCES
• APPENDIX

 

ABSTRACT
For a long time now, Nigeria has been experiencing many economic problems, which include high degrees of unemployment, inflation, unfavorable balance of payment etc,
Policies ( both fiscal and monetary) put in place by successive regimes love, due to a combination of various reasons, proved abortive in turning our economy, ground. Even the presence of so many multinational corporation does nor seem to be doing so much for the economy during all these year of multiple economic distress.
In view of the above, the researcher undertook a study to determine the whether or not these multinational are actually contributing to our economic recovery efforts and the extent and dimensions of these contributions (if any). The work is also meant to find out whether or not these MNCS did contribute to the Nations economic problems and if so, how?. This work became necessary because many experts believe that the MNC’S are very imports agents of economic growth and development, Lence the incessant clamour for more private foreign investment in Nigeria. Others, especially radical economists however, caution that these MNCS actually pose dangers to our economic recovery efforts. So, which side of the argument should we accept and work with?
At the end of the research work, it is expected that important discoveries that will positively influence future government’s polices on the issue of multinational companies would have been found out. Should this objective be met, then the researchers efforts will be judged as successful.

 

CHAPTER ONE

1.1     BACKGROUND OF THE STUDY
Developing countries like Nigeria, with weak economic base cortically require foreign investment in various forms in order to augment their local resources, as the struggle for economic development gathers momentum. Foreign investments could come in a number of ways: including direct and portfolio investments, grants. For economic development from foreign government or non – governmental organizations and individuals.
For the purpose of this research work however, we shall concentrate on direct foreign investment, which take place when foreign national acquire physical a recipient country. This type of acquisition may be total, in which case, the domestic company operates as a subsidiary of the foreign company, or it could be in partnership with other domestic investors. This is generally referred to as multinational or Transnational corporation. Control and ownership of the domestic e nterprises are largely vested in the parent company. The decision by a firm abroad to invest in another country is influenced by:

Prior to the 1980s, American Multinationals dominated global direct
investments in recent times however, their dominance has declined with the emergence of big Japanese and western corporations on the global scene. Today, there are more than 1,000 multinational corporations, with over 80,000 affiliates, which they effectively control all over the world. Most of them recorded gross sales, which are much higher than the GNP of many developing countries and indeed, a few developed countries. (AKAMIOKHOR, G.A. 1989).
Although the multinational corporations are created by private initiatives, with no political objective, they operate on such a large scale and amass such wealth with the resultant monopolistic practices (in some cases) to the extent that they become capable and indeed, do challenge the prerogatives and responsibilities political authorities. Mally, G (1993:13).
This work, will among other things examine the activities of the multinational corporations in Nigeria especially since independence, with a view to showing how they have contributed to, or stagnated the development of our economy. It is pertinent here to recognize that our experts in Economics never agreed on whether or not the multinational corporations are messials or stumbling blocks to the Nations economic development. According to Dr. Udeaba, S.I., the major objectives of those multinational corporations are profit maximization, economic exploitation and neo-colonial imperialism (S.I Udeaba: 1999, Pg 129).
Nwankwo A. 1981 Pg 107) agreed with the above assertion, when he noted that “All sectors of our economy Have suffered or degenerated in terms of efficiency,” and predicted that with this pace of development a century of independence will still leave us with poor infrastructure and weak industrial base, due largely to the negative influences of these multinational corporations.
Many Economists however agree that these multinational corporations assist in the growth of the economy, increasing our exports thereby boosting our foreign exchange earnings, providing experts in Technical and managerial skills, stimulating the employment of both men and materials in the economy and developing local technology with reduced production costs due to large scale production as well as increase revenue to government through taxation on the companies.
In the chapters, which follow, the activities of these MNCs will be critically appraised with a view to finding out which aspects of the fore – going arguments are true. Finally, the researcher will profer feasible solutions on how best to direct and use the opportunities provided by these MNCs in our National developments efforts, using Texaco (oil) Nig Plc as a case study.

The statements of problem of this study is to determine whether or
not the multinational corporations existing in Nigeria have contributed positively of negatively in developing the Nations economy. Due recognition is given to the factors identified below which the multinationals daim to be assisting to improve upon in the interest of the Nation’s economy.

Since these problems unfortunately still exist, many scholars persistently advise government to encourage the efforts of multinational corporations in these areas. Yet, (Onwuka R.I. and Sessay, 1985, Pg 149)
Posed a critical question which is relevant in this discourse “can Nigeria truly be independent when her mining, trading, banking, insurance constructions and distribution systems are virtually controlled by these multinationals?
Throughout this research work, the problem of how best to use the efforts of these multinational corporations for development purpose without posing real or potential danger to present and future well being of our economy will occupy the mind of the researcher.   

The objectives of this research are identified below:-

To what extent are the goals of these (MNCs) similar to that of
government in terms of sustainable economic growth and development

The Null and Alternate hypothesis of this study are as follows:-

Ho: The activities of the MNCs contribute to the Economic development of Nigeria.
2.  Ho:  Texaco Nigeria PLCs impact to total MNCs investment in Nigeria is significant.
Hi:       Texaco Nigeria PLCs impact to total MNCs investment in Nigeria is significant.

1.6  SIGNIFICANCE OF THE STUDY
Nigeria, like other countries within the sub-Saharan region, is a country endowed with both human and materials resources, and also like other, in going through some difficult economic situations. This study is significant because, realizing the above fact, various suggestions have been made on how to steer the economy out of its present pithole by using resources from the multinational corporations more effectively.
The work will also investigate and clear the air on some allegations usually brought against the MNCs, and throw more light on the need for more foreign capital inflow into the country. This work will be of benefit to:

1.7  SCOPE & LIMITATION OF THE STUDY
This research aims to appraise the activities of multinational corporations in Nigeria. But there are so many MNCs operating in this country, the researcher therefore will use TEXACO (oil) Nigeria PLC asd a case study.
This company is being used to serve as a parameter for determining the effectiveness of their activities in the economy.
The conclusions to be drqwn on this work will be based on the activities of this company during the period under review on the one hand, and other related materials to be drawn from other companies on the other Land.

 

1.8  DEFINITION OF TERMS

production inputs like tools, buildings, machines, money,  etc. they are usually invested for further production in future.

This is a process of economic development in which a growing part of the National resources is mobilized to develop technically up to data, diversified, domestic economic structure, characterized by a dynamic manufacturing sector, having and producing means of production ans consumer goods and capable of assuring a ligh rate of growth for the economy as a whole and of achieving enduring economic and social progress.

 

       This refers to the embodiment of useful scientific knowledge that has been effectively evolved and adopted applied for the purpose of meeting man’s immediate and future economic and social needs as determined by him.
9.    ECONOMIC GROWTH AND DEVELOPMENT
Economic growth erfers to increase in the output of an economy over a period usually a year.
This is determined by the GNP. Economic development may be understood mean economic growth plus the availability of social amenities (schools, water, hosing, health care, reduced unemployment, increase in living standard) etc to an increasing number of the population over a period usually one year.
10.  FOREIGN PRIVATE INVESTMENT (FPI)
This refers to the inflow of investments from rich foreign corporations and individuals. It may come in the form of the branch of a multinational corporation operating in a host country, or a foreign firm or individual may buy shares in an indigenous concern or may go into partnership with local or foreign investors by setting up a business in the host country.

       Any country which receives direct foreign investment especially a country in which a particular subsidiary or more than one subsidiaries are operating from abroad.
12.  HOME COUNTRY
Any country whose Nationals or residents make foreign direct investment in other countries, especially the country of origin of the company being described
13.  PARENT COMPANY
A company which owns wholly or majority shares and so controls direct foreign investment in other countries.
14.  HOME OFFICE
The headquarters of the parent company where ultimate and major policy decisions taken.
The home office may also be referred to as Head office, Headquarter, etc.
15.  FOREIGN SUBSIDIARY:
A branch of the  parent company in form of direct foreign investment, sometimes referred to as subsidiary or affiliate or local company.
16.  INTERNATIONAL DIVISION
The department in the home office or Headquarters with a foreign geographical responsibility most companies use various names for this.
17   INTRA COMPANY
This means “within the company” and is used to describe activities, which take place within a single multinational firm such as intra – company transfer of goods/services or loans or employee’s e.g. Texaco Ltd in Texas USA could give Loan or petrol tanks or export managers to Texaco Nig Ltd.    
18.  INTERNATIONAL MANAGEMENT

 

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