The Impact of Multinational Enterprise (Mne) on the International Market and Nigerian Economy.
Over the years, Multinational enterprise have matured and developed into large companies that they are now part of our everyday lives. Form the use of mobile phones to the cars, personal computers and their software and even the beverage we drink, most of these products are supplied by Multinational companies. Their existence has great impact on our lives. In the world today, Multinational enterprises are powerful companies and they own resources in excess that most host countries possess. These companies are so powerful that they turn out to be power centers that can manipulate the host countries and even international organizations and at times the affairs in its home country.
The setup of Multinational enterprise can take different models. (1) The headquarters is based in one country and the production company is based in another country. This is a common model and it allows companies to take advantage of the local firms and also allows for cheap cost of production and services. (2) The parent company is based in one company and the subsidiaries work from another country. E.g. Nestle Nigeria Plc. This kind of model operates differently independently from the parent company except from the basic ties to the parent company. (3) The headquarters is based in one country which supervise different conglomeration that stretches to other different company. This kind of model includes affiliates, subsidiaries and they give account directly to the headquarters (Tatum 2010). It can be said that the aim of an MNE is maximization of profit at the lowest viable cost. The idea behind investing in a foreign land is to take advantage of the resources of the host country to better the home country. Such action has produced a vile reaction from many scholars. Onimode 1982, a Nigerian economic scholar said MNE are monsters that have constantly and steadily crippled the Nigeria economy. MNE in Nigeria have the protection and support of the Nigerian government which has lead to the
The setup of Multinational enterprise can take different models. (1) The headquarters is based in one country and the production company is based in another country. This is a common model and it allows companies to take advantage of the local firms and also allows for cheap cost of production and services. (2) The parent company is based in one company and the subsidiaries work from another country. E.g. Nestle Nigeria Plc. This kind of model operates differently independently from the parent company except from the basic ties to the parent company. (3) The headquarters is based in one country which supervise different conglomeration that stretches to other different company. This kind of model includes affiliates, subsidiaries and they give account directly to the headquarters (Tatum 2010). It can be said that the aim of an MNE is maximization of profit at the lowest viable cost. The idea behind investing in a foreign land is to take advantage of the resources of the host country to better the home country. Such action has produced a vile reaction from many scholars. Onimode 1982, a Nigerian economic scholar said MNE are monsters that have constantly and steadily crippled the Nigeria economy. MNE in Nigeria have the protection and support of the Nigerian government which has lead to the
References: Shenkar, O. & Luo, Y (2008) International Business, Sage Publications, Inc The impact of Multinational corporations on international relations- A study of American multinationals (http://etd.lib.metu.edu.tr/upload/12608016/index.pdf) Onimode, Bade (1982) - Imperialism and underdevelopment in Nigeria: the dialectics of mass poverty, London: Zed Press; Westport, Conn., U.S.A.: U.S. distributor, L. Hill, 1982. ii, p. 258. http://www.nestle .com Equity Research Report: Nestle Nigeria Plc, expanding to capture additional markets, August, 2010(http://proshareng.com/admin/upload/reports/Nestle%20PLC-%202010.pdf)