CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF STUDY

The activities of the MNSs have increased overtime in Nigeria in terms of investment and commerce. In the contemporary market society, corporations, particularly multinational companies (MNSs), are the motor of capitalism. Though created through law and numerous social contracts, corporations do not owe allegiance to any nation, community or locality (Bakan, 2004). It has been argued that governments and host communities may be interested in eradicating poverty, promoting education, health care and human rights, but corporations may not necessarily share such goals. They are essentially ‘private’ organisation and are required by law to prioritise the welfare of the shareholders (capital) above other stakeholders (Sikka, 2008). Corporation today are expected to conduct their operations responsibly with accountability to wider society.

To legitimise their social power corporations may acknowledge some social responsibilities, but they cannot buck the systemic requirement to increase profits and dividends to the benefit of capital. This has been accompanied by a variety of strategies to improve corporate earnings through financial engineering, cartel, money laundering, bribery and corrupt practices (Sikka, 2008; Bakre 2008ab, Otusanya, 2010, 2011). Though corruption is somewhat contentious to define, bribery and corruption remain major features of the world economy. In general, the practices involve attempts to gain competitive advantages and to enhance profits (Johnston, 2005; Otusanya, 2010). A large amount of corruption and bribery is also associated with the looting of countries by their rulers, a process that frequently carries the fingerprints of corporations (Sikka, 2008; Bakre, 2008ab; Otusanya, 2010). Corporation is all about creating wealth, and it is a highly effective vehicle for doing so. No internal limits, whether moral, ethical, or legal, limit what or whom corporations can exploit to create wealth for themselves and their owners (Bakan, 2004).

According to Sikka (2008), ‘such practices seems to be part of the ‘enterprise culture’ that persuades many to believe that ‘bending the rules’ for personal gain is a sign of business acumen’ (p. 270). Where gaining competitive advantages is considered to be an entrepreneurial skill, especially when competitive business environment link profit and market shares with meeting global business target.

1.2 STATEMENT OF RESEARCH PROBLEM                      

Economic and political developments are the goals of any modern state. The yearning for these goals has in recent time dominated the literature of the economies of the developing nations of which Nigeria is one. The lopsided arrangement of the world's capitalist order under which the third world economy and its periphery components constitute a major obstacle to economic growth and  development of these new nations in general.

In view of this, the project work is design to look into the performance of the economy and observe how the activities of the Multinational companies (MNSs) have contributed to an increase in the Gross Domestic Product (GDP) and political economy of Nigeria. Nigeria has been experiencing some problems in the area of transfer of technology, employment, economic inequality and balance of payments problems. This work will also aim at examining whether these problems are functions of the Multinational companies (MNSs) or whether there are intervening variable responsible for these problems. It is to this regard that the researcher desire to examine MNSs and political economy of Nigeria using Julius berger as the case study.

1.3 RESEACH QUESTION

The study came up with research questions so as to ascertain the above stated objectives of the study. The research questions for the study are:

1. What are the contributions of Julius berger as a MNSs to Nigeria political economy?
2. What is the relationship between MNSs and socio-economic development in Nigeria?
3. What is the effect of government policy on the performance of Julius Berger in Nigeria?
4. To what extent do multinational companies influence the political economy in Nigeria?

1.4 AIM AND OBJECTIVES OF THE STUDY

The main aim of the research work is to examine MNSs and political economy of Nigeria. Other specific objectives of the study are:

1. to determine the contribution of Julius berger as a MNSs to Nigeria political economy
2. to determine the relationship between MNSs and socio-economic development in Nigeria
3. to investigate on the effect of government policy on the performance of Julius Berger in Nigeria
4. to determine the extent to which multinational companies influence the political economy in Nigeria
5. to proffer solution to the above stated problem

1.5 STATEMENT OF RESEARCH HYPOTHESIS

H0: The MNSs and the Nigeria political economy nexus is low

H1: The MNSs and the Nigeria political economy nexus is high

1.6 SIGNIFICANCE OF STUDY

The study on the MNSs and political economy of Nigeria will be of immense benefit to Julius Berger as MNSs, the federal and the state government as the findings of the study will discuss more on the importance of multinational companies, and their contribution to the political economy of Nigeria. The study will also serve as a repository of information to students and other researchers that desire to carry out similar research on the MNSs and political economy of Nigeria. Finally the study will contribute to the body of existing literature and knowledge in this field of study and provide a basis for further research

1.7 SCOPE OF STUDY

The study on the MNSs and political economy of Nigeria will focus on Julius berger as MNSs, the study will cover on the importance of multinational companies and their contribution to the political economy of Nigeria

1.8 LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work

1.9 DEFINITION OF TERMS

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.

Undeveloped Country: A situation where some of the following feature. Absolute poverty, low per capital income, low rate of economic development, poor health, high death rate, high dependence on importation, balance of payment deficit eg Nigeria.

Economic Development: The process of improving the quality of all human living. It comprises the following economic growth, self esteem and economic freedom.

Capital Intensive: A method of production whereby capital proportion is relatively higher than labour or land.

Indigenization Policy: Measure aimed at localizing ownership and control of the economy by Nigerians. An example is the Nigerian Enterprises Decree of 28th 

February, 1972.

Balance of Payment: A statement of a national's financial transactions with the outside world over time period usually a year.

Cartel: A group of firms which enter into an agreement to set mutually acceptable prices for their products and this is often accompanied by output and investment.

Production Function: A technologically or Engineering relationship between the quantity of a goods produced and the inputs required to produce it.

Economic Growth: A process by which the productive capacity of the economy is increase over time to bring increase in the levels of national income.