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THE EFFECTS OF MULTINATIOINAL CORPORATION INDUSTRALIZATION OF NIGERIA ECONOMY (A CASE STUDY OF PATERSON ZOCHONIS (PZ) INDUSTRIES PLC)

(Accounting)

THE EFFECTS OF MULTINATIOINAL CORPORATION INDUSTRALIZATION OF NIGERIA ECONOMY

(A CASE STUDY OF PATERSON ZOCHONIS (PZ) INDUSTRIES PLC)

ABSTRACT

In order to counter the need fluctuations in the prices, demand, supply and income fro primary products, to reduce the risk of over dependence on primary production and to modernize the economy and increase employment opportunities, most developing countries have adopted a policy it is widely behaved that bring high standards of living, it increase economic flexibility by making more occupation. Goods and services available and also the industrial; sector tends to have more linkage effects with or growth – promoting impact on the general economy than any other sector. Perhaps, it is for these reason that industrialization holds and most mystic fascination for Nigeria, as it does for the rest of the developing world.

Thus trying to be incorporated into the world of industrialization, if becomes pertinent to fall back on international resources due to lack of economic ability to take off, hence the activities of multinational corporations.

In this research , Pz Pz industries PLC is chosen as the case study. The choice is influenced by the fact that if contributes to some of the identifiable industrial viable in Nigeria such as manpower development, employments, finance capital, technology development and transfer and linkage which provides a good sample for assessing the effects of multinational corporations in the industrialization of

Nigerian economy.

The research process involved identifying problems to be given attention, objectives to be satisfied and reviewing the body of existing knowledge on the subject matter. The research implored a systematic content analysis to elicit thus

            The study showed that baring the limitation posed by death of infrastructual facilities, the multinational corporations have helped in the development of Nigerian economy.

TABLE OF CONTENT

CHAPTER ONE

1.0       Introduction

1.1         Statement of problems, and objectives of the study

1.2         Rational of study

1.3         Significance of the study

1.4         Background Information about the study

1.5         Definition of terms

CHAPTER TWO

2.0       Literature review

2.1         Theoretical Framework of analysis

2.2         Multinational Corporations and foreign capital

2.3         Multinational Corporation and Technology  development and

2.4         Multinational corporations and employment.

2.5         Nigeria’s Economic Policy towards industrialization

2.6         The Origin and purpose of Economic policy.

2.7         The policy of import substitution industrialization Empirical Review

2.8         Contributions of Paterson Zochonis industries.

2.9         Capital contribution to Nigerian industrial development

2.10      Linkage effects on industrial development in Nigeria

2.11      Provide of Employment.

2.12      Manpower development and training

2.13      Education

2.14      Health and Welfare scheme

2.15      Technology development and transfers to Nigerian Industrialization

CHAPTER THREE

3.0       Hypothesis, Methodology, sources of Data

Limitation of study

3.1         Hypothesis of study

3.2         Methodology of study

3.3         Sources of data

3.4         Limitations of study

CHAPTER FOUR

4.0       Data Presentation, Analysis and discussion of the result

4.1         Presentation of data

4.2         Analysis of data

4.3         Discussion of the result

CHAPTER FIVE

5.0       Summary, Conclusion and Recommendation

5.1           Summary of the entire work

5.2           Conclusion

5.3           Recommendation on the work

Bibliography

Appendix

CHAPTER ONE

INTRODUCTION

            International business as a filed of study and practice activities that affect the persons or conditions of more than one nation, state, colony or territory. Experience has shown that domestic production of consumer goods is usually replaced by the  import of consumer goods in a developing economy. This is because the power over the national wealth was largely in the hands of foreigners, the finance capital generated by past wealth producing activities was not used to maintain much less to expand the local economy. 

            This process gave rise to an increasing demand for intermediate and capital goods required to produced the consumer goods. If a country is poor in wealth producing structures (Capital Stock) if is because whoever, controlled wealth in that country dead to invest their financial capital in something or somewhere else. The domestic scarcity of these intermediate and capital goods led to increasing exports, imports then are restrained due to their effects on the balance of payment. The not outflow of finance capital from the under developed societies (wealth depletion) weakened their capacity to develop the knowledge to produce wealth and this further decreased their bargaining power. Thus, the process of industrialization is checked. However, the next step is for a country to start to produce those intimidate and capital goods required for production of the needed consumer goods. But in many of these industries, the muumuu scale of output at which production is economical is very large and beyond the scope of mot African countries with their population an low per capital income. It because necessary then to group those economies of scale, external economies and linkage effects a well as make if possible to   produce  the intermediate and capital goods which are basic necessities for industrialization.

            Today, there are many corporate group which could promote linkage groupings to take advantage of the economies of scale and external economies among African countries. These corporations or groups are not merely concerned with baying and selling of goods  and services across national frontiers but they are “Multinational corporations “MNCS or “Transitional corporations” TNCs or “Global corporations” in that they organize productive, distributive as well as service centres in a number of foreign local. This world large enterprises can command enormous financial resources for investment, both internally capital market and by tapping various and financial institution. Not only do they have access to finance, they often have privilege and can obtain funds on better terms than other firms.                 

            Industrialization is very important in Nigeria because the markets for her local exports expand too slowly, while imports tend to use faster. If growth is to be continued and accelerated, the economy has to diversified. Such diversification entail progress on several fronts such as science and technology and its application, manpower planning and development, provision of capital and its proper investment, the general encouragement of an industrial climate and adoption and putting into practice at all levels a policy which promote the actual establishment of industries. Rapid industrialization also involves pursing pollicies in accordance with the precepts the new international division of labour amend  at increasing global output.

            This in try my to increase this gobal output, it becomes pertinent to harness international resources in the form of foreign capital. This has resulted to the  pervasive penetration of the MNCs throughout every key sector on the economy of the country.

            In Nigeria however, foreign capitals have been subjected to considerable resignations especially by the enterprises promotion decree of 1991 and 1992, however, this could not stand the test of time. The government had with effect from January 1,199 repealed in its entirely the Nigerian enterprises promotion Decree 1989 as amended. This repayment was not unconnected with the small local elicits closely tied to foreign capital. Whatever their ideology or their politics may be, have succeeded to change the rules of the game for the realized that their own economic and political survival depended upon it. These to some extent , have national durability, inspiration and confidence in hammering our diverse and potential wealth and resources for composite development of the country.

STATEMENT OF THE PROBLEM

            The public academics and politicians look at MNCs in a variety of radically different ways. To some, MNCs have the financial capacity to raise the social status of a few members to the society to the determent of the others. Others in contrast regard MNCs as the most modern and efficient form of company organization and therefore indispensable beneficial vehicles for economic and social progress.          

            In Nigeria, however, many people believe that MNCs have never been good to this country and that they under price primary goods, cause technological distortion, cultural degradation, repatriate their profits and consequently leaving the country worse off. They also argue that the MNCs have not brought any beneficial effects to Nigeria and brought any benefits they might to Nigeria and whatever benefits they might have brought have been overshadow by their negative effects while others believe that they  have been overshadowed by their negative effects while been believe that they have been able to play an important in the economic affairs in bringing healthier, happier  and more productive lives to people everywhere in the country.

            Thus, the claim that the MNCs are engineer of development is becoming increasingly important to established its legitimacy and on the other hand it is becoming more of a challenge to establish such a claim are such assertions valid, or on the country, are they stereotypes ? we can judge their claims only if we know what development track they are on. This is obviously on major are which this these will seek to address by  examining one particular MNCs i.e. Patterson Zochnis industries.

RATINALE OF THE STUDY

            The main purpose of this study is to use MNC, namely Paterson Zochous (PZ) industries PLC to established a good understanding of the operations of MNCs in Nigeria. The  operations of MNNCS in less developed countries (LDCs) are considered similar in principle except for ranations caused by the difference in types of products they engage in. By so doing, it null help us to ascertain if MNCs are merely economic “ Multi –headed “ hydias, or an enticer which grabs, sucks and devour  her host countries on one hand. And or an agent of industrialization through the transfer of technology, employment, sources of foreign capital and developed in the course of its operations and helping o improve the primary sector.

SIGNIFICANCE OF THEY STUDY

            A lot of economic benefits are expected by Nigerians from MNCs including PZ industries PLC such as employment, transfer of technology, source of foreign capital and development and so n. This study null give a focus on how to better judge the operations and contributions of PZ industries in enhancing industrialization in Nigeria and also provide reference point for further studies on relate fields.   

BACKGROUND INFORMATION ABOUT THE STUDY

            The information contained in this study was obtained from company’s employees Handbook and General condition of service.

            The company was incorporated in Nigeria on 14th December, 1948 under the name of PB Nicholas and company limited. Paterson Zochonus and company of Manchester (PZ) subscribed 75.5% of the company’s issued share capital and has since directly or through subsidiary companies, retained the controlling interest.

            PZ itself was incorporated in England in 1884 and became a public company quoted on the London and Northern Ireland stock Exchanges in 1953. Its principal activity was that of general merchants in West Africa and it has been established in this capacity in Nigeria since 1899.

            In 1951, Mr. P.B. Nicholassold out his interest in the company to PZ. Two years later, the company changed its name to Alagbo industries limited and in 1960 adapted the name Associated industries limited. Within the same year, the company achieved its first indigenous Nigerian equity participation and by the end of 1972, it had sold 40% of its share capital to indigenous Nigerians. That is, it became a public company and was quoted on the Nigerian stock exchange.                     

            In accordance with the Federal government’s directives (indigenization Act) it sold another 20% of its shares to Nigerians in 1976, thus bringing the equality share participation to 60% infarour of Nigerians.

            Following the merger of PZ and company Nigerian limited and Associated industries limited in 1976, the company changed its name to Paterson Zochonis industries limited, and incompliant with the companies and Ailed Matters Decree of 1990, it adopted its present name of paterson Zochnis industries PLC.

            After incorporation in 1948, new factory bulging were erected and modem soap making equipment installed at Aba thereby creating one of the earliest major industrial manufacturing facilities were further developed during the 1960s both by addition to the soap making capacity and by the introduction of a wide range of perfuming, cosmetics and medical products.

            During the years 1967 1970, manufacturing operations at Aba factory were disrupted and in consequence the company opened in rented premises in Lagos a factory which enabled it to maintain supplies of all but its soap products to its customers. This manufacturing unit eventually more to modern, purpose – built and equipped factory premises on company property in the Ilupeju industrial Estate, Lagos. The company range of products include bar and toilet soap, perfuming, cosmetics, condextionery, medicaments and phamacenticals all of which are distributed throughout Nigeria with buffer stocks held at strategic centres.

            The company is well know through its duck, premier, joy imperial leather and canoe soaps, venus de melo range of cosmetics, Danfulanl pomade and yet hair cream, Elephant and jet Blue detergents, A.P.C, Roberts, Alagbin, Zubes Heatol and Rob ontments and Minta supermints. The company also manufactures and distributes air conditioners, refrigerators, deep freezers and air consumer goods.

            In addition,  the company has significant export of glfcerin and oil cake by products of the soap making process which utilizes substantial tomatoes of palm oil and other vegetable oils purchase locally.                  

            The increasing popularity of detergents indicated by market surveys and the close end – use association between the company’s existing soap products and detergents gavense to a decision to extend the range of products to include detergents. Factory premises for this purpose were erected at Ilupeju and in 1973, one more major products was added to the company’s wide range.

            In pursuance of its expansion policy, a modern detergentifactory complex was constructed at Ikorody in 1983 with production capacity of over 50,000 tons per annum.

            PZ interests now include industrial ventures in Nigeria, Gamba, Ghana, Sieiva Leone etc. and textile wholesaling in the united Kingdom.

DEFINITION OF TERMS MULTINATIONAL CORPORATION

            An international corporation with headquarters in one country but breach offices in a wide range of both developed and developing countries whose control and key decisions emanate from the pareal

 company or headquarters.

INDUSTRALISATION

            A process of economic development in which a growing part of the national resources is mobilized to develop technically up – to date diverse filed domestic structured characterizes by a dynamic manufacturing sector and capable of assuring a high rate of growth for the economy as a whole and achieving economic and social progress.   

DEVELOPMENT

            An increase in human control over the national environment to improve the total well – being of the people through use of appropriate and affordable means and methods that null retain regard and enhance their dignity and freedom.  

FOREIGN DIRECT INVESTMNET

            A capital investment made in a foreign country in which the investor has significant control.

TECHNOLOGY

            This is the systematic application of scientific knowledge, an action usually of industrial process but also applicable to any recurrent activity using tools and techniques in carrying  it out.

LESS DEVELOPED COUNTRIES

            Poor countries with low income per head of population, little industrial developments and limited economic and social infrastructure.

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