THE APPRAISAL OF MULTI-NATIONAL CORPORATION TO THE CONTRIBUTION OF COMMUNITY DEVELOPMENT ( A CASE STUDY OF EXXON MOBIL OIL COMPANY, EKET) AKWA-IBOM STATE.

CHAPTER I

INTRODUCTION

1.1 BACKGROUND OF THE STUDY:

Multinational Corporation is used by people both in the business and non business sectors, to some people it means a Fairly big firm that has about five or six branches in a state, while others see it as a big firm that has branches in all the states or divisions of a country. According to Prasad & Shetty, (1976) “Multinational corporations are firms that operate effectively under different national sovereignties”. They further stress that multinational corporations are such firms that must cope with wide variations in economic conditions, different values and cultural systems and wide geographical separation.

This definition, multinational corporations are large firms that operate in different parts of the world, but most of the times have one acclaimed headquarters, situated in a place it was first established. There are various multinational corporations both in Nigeria and abroad.

However, For the purpose of this research works, the researcher is using Exxonmobil oil producing Nigeria at Eket, Akwa-Ibom State. it is of note to mention that multinational corporations operating in foreign hands must respect the tunes and dictates of the host government or face expropriation. By the nature of their operation, multinational corporations must cope not only with more complex organizational structure but with far more elaborate and sensitive array of environment variables than domestic operations have these corporations are seen as giants amongst economic entities and primarily because of their size, economic power, efficiency, stability, dynamism, flexibility and quite often a technological oligopoly. Elwood (1979), said that the size and scope of multinational corporations within many developing nations often bring about significant social changes that disrupt or counteract social programmes and goals of host government.

Multinational corporations are known for their exploitative tendencies in developing countries. There has been lots of accusation by concerned African countries that these corporations are only out to suck dry the natural and human resources of poor African countries without correspondingly compensating them or showing appreciation in return. Despite the fact that these corporations exploit these African countries and realize huge profits from their business operations, it is difficult for saying they satisfy the yearnings and aspiration of the communities where they operate in terms of business social responsibility.

Offlang (1980) asserts that, going by the concept of imperialism and dependency as characterized by the exploitation of the developing countries by the west and as manifested by the infiltration of western capital into poor African countries, one can categorically say that the contribution of these multinational corporations to the community development is not encouraging. This is evidenced by public out-cry for compensation by Communities where these corporation arc operating due to the 1ct that these communities provide the needed raw materials for that operation.

At times these communities after waiting patiently for these. corporations to meet their social demands without any response, take the law into their hands to show Their resentments. It is note to stress that the oil producing communities are the ones which are supposed to benefit more From Multinational Corporation involve in oil exploration in such areas. Intact these oil exploration corporations should provide lots of social amenities like pipe bore water, electricity, good roads, recreational facilities and host of others to these communities. The corporation social activities to these communities should extend to the areas of employment, scholarship and other incentives.

In further expressing my view on the fact that the oil producing communities should benefit more from oil exploration multinational corporations that are operating in such of the pollution and other hazards caused these communities due to oil drilling. These are cases, which due to oil spillage a lot of aquatic animals die and the seawater becomes bad and poisonous thereby causing untold hardship on such communities.

1.2. STATEMENTOFTHE PROBLEM

As a result of the hazards and exploitation of multinational corporations on the communities in which they are operating, it is important for them to show a serious concern in terms of being socially responsible to these communities.

However, it is difficult for one to. Say that a particular corporation

has contributed adequately to the development of a particular

Community because development encompasses many things ranging from the provision of infrastructural facilities, employment, scholarships and .a lot more. Communities cry out of neglect, lack of appreciation and insufficient compensation by corporations that are operating in their areas.

The corporations on their pa refute- this claim by saying that they have responded adequately to their social needs. The researcher also notice a problem of disparity between the corporation and the community as to who have fulfill his promise of providing social infrastructures and economic benefit (or) whether the community is satisfied with what the corporation has so far done to the community.

1.3. OBJECTIVEOFTHESTUDY;

The main objective of the research work is to appraise the contributions of Multinational Corporation towards community development. 11

 

The specific objectives of the study are:

  1. To analyse the difference in opinion between the corporations and host

Community.

  1. To evaluate the level of social responsibility Carried out by Exxonmobil Oil Producing Nigeria.Plc in Eket.
  2. To determine to what extend Exxonmobil have Contributed towards the

development of Eket.

D To investigate what the corporation has actually done in the community in

terms of infrastructural growth.

  1. To examine the benefit of Exxonmobil to the people of Eket.
  2. To highlight the problems caused to Eket community and environment due

to the existence of Exxonmobil.

  1. A suggestion that Exxonmobil should principally develop Eket as her host

community.

1.4. SIGNIFICANT OF THE STUDY

The study focuses on the contribution of Multinational Corporation to host community when properly articulated, it will be of tremendous benefit to many interest groups Exxonmobil and the people of Eket are at variance over the issue of the firms satisfying them infrastructural and otherwise. The people feel the corporation has not adequately compensated them and as such their yearnings and aspirations are yet to be satisfied. The study would be useful to engender efficient and effective human relation among stall ci the corporation and host community, the study will help to discover the corporation and the people because of the difference in their claims. This study will be useful to erase the disparity, call for a compromise, and also counter the possibility of frequent contribution between both parties.

However, the researcher is convinced that not only the people of Eket, the government of the Federal Republic of Nigeria and staff of Exxonmdbil but also the general leader would find this study valuable. The research work will be beneficial to researchers and prospective researchers in the area of the study. It will serve as a guide for future researches.

1.5 SCOPE OF THE STUDY:

This research study is to assess the contribution of multinational corporations to community development by Exxonmobil to the people of Eket. It focuses attention on the provision of social amenities and other forms of assistance the firm assisted the people with, the study is limited to Eket Local Government Area of Akwa-Ibom State, and covers the firms social responsibilities to the people.

REFERENCES

Elwood, M. (1979) Accounting Problems of Multinationals Enterprise.

Lexington Books, D.C. Health and Co. U.S.A.

Ofiong, D.A. (1989) Community And Change in some traditional

Societies of Nigeria Ahmadu Bello University Press Ltd. Zaria, Nigeria.

Shetty, K. F & Prasad, S.B.: (1976), Air Introduction to Multinational

Management Prentice Had Inc. New Jersey.

1.6 RESEARCH QUESTIONS

To enable the study to achieve the stated objectives, the

Underlisted research questions were formulated.

  1. Has Exxonmobil provided social amenities to the people of Eket?
  2. What Economic benefit Exxonmobil has to the Eket community?
  3. Does the multinational consult the people of Eket base on their
  4. How can Multinational Corporation contribute toadward Us community development?

1.7 RESEARCH HYPOTHESIS

To enable the researcher to achieve the stated objective, four hypotheses were formulated arid they are as follows;

(HO) That Exxonmobil has not provided social amenities for the people of Eket. –

(HL) That Exxonmobil has provided social amenities for the people of Eket.

  1. (HO) That Exxonmobil has not benefited the Eket community economically.

(HI) That Exxonmobil has benefited the Eket community

economically.

  1. (HO) That the multinational corporation does not consult the people of Eket based on their needs. (HI) That the multinational corporations consult the people of Eket based on their needs.
  2. (HO) That multinational corporation has not contributed towards the development of their host community.

(HI) That multinational corporation has contributed towards

the development o their host community.

1.8 LIMITATION OF THE STUDY

In the course of conducting the researcher came face to face with some practical problems. One of the constraints was uncooperative attitude of respondent as some respondent felt the question were made to expose the community‟s backwardness in terms of social/economic development. Certain information which ought to have appeared in this study were denied the researcher by the personnel of department of the corporation.

Another constraint was the task of moving from one community to another in order to administer the questionnaire, which was very strenuous due to distance and transportation difficulties. It was also difficult to elicit information from illiterate villages whom in most case resisted interview.

The researcher did not find it easy to continue with the researcher work due to the large work in class. A research work of this magnitude requires quite a time for a meaningful work to be done.

 

1.9 DEFINITION TERMS

  1. SPDC: Shell pipeline Development company
  2. EIA: Environmental investigation Agency
  3. MOSOP: Movement of the Survival of Ogoni people
  4. MNE: Multi-National Enterprises
  5. EPZ: Export Processing Zones
  6. FDI: Foreign Direct Investment
  7. R & D: Research and Development
  8. CENDAL: Centre of the Development of Africa through law
  9. PAT: Profit After tax
  10. EKET: A local Government in Akwa-ibom state one of the resourcefully endowed regions of the state.
  11. HETEROMORPHIC: It has to do with different in shapes, size, appearance or structures.
  12. HOMEOMORPHIC: This is the mathematical relationship between geometric shapes.
  13. MNC: Multinational corporations 11
  1. POLYCENTRIC: it has to do wish purchasing multi domestic strategies that treat each country as a separation competitor .
  2. GEOCENTRIC: it has to do wish making decision from a global perspective
  3. NDA: Niger Delta Areas
  4. MILITANTS: They are Ex-military men who come together to disturb the operations of the country through their terrorist Activities
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