CULTURAL FACTORS AFFECTING THE PERFORMANCE OF MULTINATIONAL CORPORATIONS IN NIGERIA (A STUDY OF MULTINATIONAL CORPORATIONS IN RIVERS STATE OF NIGERIA)
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CULTURAL FACTORS AFFECTING THE PERFORMANCE OF
MULTINATIONAL CORPORATIONS IN NIGERIA
(A STUDY OF MULTINATIONAL CORPORATIONS IN RIVERS
STATE OF NIGERIA)
ABSTRACT
This study examined cultural factors that affect
the performance of multinational corporations in Nigeria. Data were collected
from managers in some multinational corporations in Rivers State. The
statistical tools used in analyzing the data were the simple percentage and
frequency tables, and the spearman rank order correlation coefficient. The
result revealed that there is significant relationship between cultural factors
and the performance of multinational corporations. Also, it was found that
significant relationship exists between cultural attitudes/behaviour and the
performance of multinational corporations. From the findings, it is concluded
that cultural factors such as norms, customs, values, beliefs and attitudes
affect the performance of multinational corporations. Based on this, it is
recommended that multinational corporations in Nigeria especially those in
Rivers State should take the cultural factors into consideration while
formulating and implementing policies as it would enhance their performance.
TABLE OF CONTENTS
PAGE
Abstract i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of Contents vi
CHAPTER
ONE: INTRODUCTION
1.1 Background
of the study 1
1.2 Statement
of the problem 4
1.3 Purpose
of the study 5
1.4 Research
questions 6
1.5 Research
hypotheses 6
1.6 Significance
of the study 7
1.7 Scope/limitation
of the study 8
1.8 Definition
of terms 9
1.9 Organization
of the study 10
CHAPTER
TWO: LITERATURE REVIEW
2.1 Introduction 13
2.2 definition
of multinational corporations 13
2.3 characteristics
of multinational corporations 16
2.4 objectives
of multinational corporations 20
2.5 strategies
of multinational corporations 21
2.6 challenges
multinational company 35
2.7 performance
of organization 39
2.8 concept
of culture 43
2.9 the
cultural environment 44
2.10 cultural
factors affecting the performance of
multinational
corporation in Nigeria 47
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Introduction 52
3.2 research
design 52
3.3 population
of the study 53
3.4 sample
size determination and sampling and procedure 54
3.5 data
collection method 55
3.6 questionnaire
design 55
3.7 operation
measures of variable 56
3.8 data
analysis technique 57
CHAPTER
FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Introduction 59
4.2 questionnaire
administration collection 59
4.3 Analysis
of data 60
4.4 testing
of hypotheses 64
CHAPTER FIVE: DISCUSSION OF FINDINGS, CONCLUSION
AND RECOMMENDATION
5.1 Introduction 74
5.2 Discussion
of findings 74
5.3 Conclusion 75
5.4 Recommendation 76
Bibliography
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In
business environment, the most single influence no organizational policies and
the strategies is the cultural factor. Culture is seen as the historically
developed and learned pattern of beliefs and customs of the people, which forms
the basis for the formulation of attitude from which the people’s pattern of
social behaviour emerge (Nwokoye and Ahiazua, 2006). Taylor (2002) noted that
culture is that complex whole which includes; knowledge, belief, moral, laws,
customs, values and other variables acquired by man as a member of the society.
These values, customs, beliefs, norms, etc are known as cultural determinants.
These cultural factors have made organizations more complex. Since
organizations such as multinational companies have barely been exceeded in
complexity, turbulence and rapidity of change, the cultural environment has
brought with it a greater impact on human attitudes and behaviour. Therefore,
it becomes imperative for multinational corporations to pay more attention than
ever to the cultural factors effecting organizational performance.
According
to Nnedu (2002), cultural factors provide constraints in which management of
multinational firms must pay attention to. The people (workforce) in any
organization grow up in a particular society and culture and these shape their
basic beliefs, values and norms. They absorb almost unconsciously, a world view
that defines their relationship to themselves, others, institutions, society at
large, nature and the cosmos. However, culture is much more persistent and
often times outline the generations of men.
The
Nigeria nation as a multi-cultural dimensions made up of many ethnic groups,
call for managers in multinational corporations to be culture conscious as they
analyze the environment for planning purpose. The multifaceted nature of the
Nigeria cultural environment has resulted in different values and attitudes.
Therefore, managers and strategies in multinational companies must pay
attention to the changes in values, attitudes, etc if they are to achieve their
corporate objectives.
Understanding
the cultural factors and taking them into consideration when formulating
polices and strategies, has become a pre-requisite for the attainment or
organizational culture. However, it has remained one of the major problems
facing multinational corporations.
According
to Baridam (2001), multinational corporations in Nigeria today are under a
challenge as a result of the break with tradition authority, the growth of
socialist ideology, economic affluence and consequent changes in needs and
behavioural pattern. This is silent crisis between people and multinational
organizations. The survival of Multinational Corporation however, depends on
how well they acknowledge and understand this crisis (cultural factors).
Cultural
behaviour is not universal. A Nigeria worker may behave differently from the
way a British worker behaves in an organization. This is however due to the
socio-cultural influences on him/her. Therefore, multinational corporations in
Nigeria must plan ways of understanding the Nigeria culture. Any attempt not to
understand the Nigeria culture will have a negative impact on the organization
performance. Nwokoye and Ahiauzu (2006) argued that the nature of the society
and culture of the people (employee) virtually affect the manner in which
business operations are conducted. They contended that it is very important to
understand the nature of the society first before embarking on business
ventures because culture and its elements influence organization’s plan and
decision making in the environment in which they operate.
Cultural
factors such as the norms, values, attitudes, beliefs and behaviours have
significant influence on organizational polices and strategies. Each of the
cultural elements is important and multinational corporations should do well to
take it into consideration when formulating and implementing policies and
strategies. Failures to consider these cultural factors will adversely affect the
performance of multinational corporations in Nigeria. This study therefore
examines the cultural factors affecting the performance of multinational
corporations in Nigeria.
1.2 STATEMENT OF THE PROBLEM
Cultural
factors affecting performance has been singled out for special emphasis in
recent years. Culture influences and helps to direct multinational firms in
planning and decision making. It has been observed that a good plan enhances
business performance. A great deal has been said and written about the role of
culture in multinational organizations, and most often, it has been treated as
a problem. Some writers see it as a human relations problem, or as problem in
language and social skills.
For
multinational corporations in Nigeria to cope with the environment, they must
recognize the effect of culture on the performance of their organization.
Culture is merely a way of life of the people in an attempt to meet with the
challenges of their environment. Cultural factors have been cited as the root
of the problems encountered by multinational corporations in their day-to-day
human activities. The problem of culture, for instance, has been given as the
explanation for most industrial conflict.
Apparently,
there are numerous cultural problems inhibiting multinational corporations in
Nigeria. These cultural problems are known to have affected the performance of
multinational corporations in Nigeria. This study therefore is to identify the
cultural factors affecting the performance of multinational corporations in
Nigeria using selected multinational manufacturing corporations in Rivers State
as a survey study.
1.3 PURPOSE OF THE STUDY
The
purpose of this study is to examine the cultural factors affecting the
performance of multinational corporations in Nigeria. In order to achieve this,
the study intends to attain the following objectives;
1. To
identify the cultural factors affecting the performance of multinational
corporations.
2. To
ascertain the extent of which the cultural attitude and beahviour of indigenous
workers affect the performance of multinational corporations.
3. To
find out whether the beliefs of indigenous works affect the performance of
multinational corporations.
4. To
ascertain the extent to which the cultural norms, customs and values in Nigeria
affect the performance of multinational corporations.
5. To
find out whether multinational corporations consider cultural factors when
formulating and implementing policies and strategies.
6. To
provide the necessary recommendations for the study based on the findings.
1.4 RESEARCH QUESTIONS
In
order to effectively address the objective of study, the following questions
are put forward:
1. What
are the cultural factors affecting the performance of multinational
corporations?
2. To
what extent does cultural attitude and behaviour of indigenous workers affect
the performance of multinational corporations?
3. Does
the cultural belief of indigenous workers affect the performance of
multinational corporations?
4. To what
extend do cultural norms, customs, and values in Nigeria affect the performance
and implementing polices and strategies?
1.5 RESEARCH HYPOTHESES
The
following hypotheses are formulated to guide this study.
H01:
There is no significant relationship between cultural factors and the performance
of multinational corporations.
H02:
There is no significant relationship between the cultural attitude/behaviour of
indigenous workers and the performance of multinational corporations.
1.6 SIGNIFICANCE OF THE STUDY
This
study is very significant in the sense that it would be useful to different
categories of persons and even organizations. First, this study would know the
cultural of the public who are interested in knowing the cultural factors
affecting the performance of the multinational corporations in Nigeria.
Secondly, this study would be useful to multinational corporations in Nigeria
especially those in Rivers State as its recommendations would help them in
discovering ways to address the cultural factors affecting performance.
Also,
managers and strategies in the various multinational corporations in Rivers
State would find the recommendations of this study relevant because it would
help them to identify measures of understanding the socio-cultural environment,
and advise them to take the cultural factors into consideration when
formulating and implementing policies and strategies.
Finally,
this study would be useful to students, authors, scholars, and other
academicians who may be interested in carrying out further research on this
topic, as it would serve as a good reference material for their study.
1.7 SCOPE/LIMITATION OF THE STUDY
The
scope of this study is limited to selected multinational manufacturing
corporations in Rivers State. The respondents constitute of top level managers,
middle level manages and lower level managers of the selected multinational
manufacturing corporation in Rivers State.
It
is hoped that the findings from this area covered would be used for
generalization to all the multinational corporations in Nigeria.
This
study suffered some limitations. The major limitations of this study include:
1. Time Constraints: Because this study
was carried out simultaneously with class lectures, there was limited time to
do a more extensive research in terms of covering wider areas.
2. Financial Constraints: This study is
expected to cover all the multinational corporations in Nigeria but the researcher
short of adequate financing which would have enhanced such coverage.
3. Lack of Co-Operation from Respondents:
In the course of carrying out this study, some of the respondents failed to
co-operate with the researcher on information dissemination.
4. Bureaucracy: This study was further
limited by bureaucracy. Getting approval for interview was not easy and when
such interview was finally granted, a lot of appointments were cancelled.
However,
the researcher was still able to collect reasonable amount of information
despite these odds.
1.8 DEFINITION OF TERMS
For
the purpose of clarification, the following terms are defined:
Culture
Culture
is seen as the historically developed and learned pattern of beliefs and
customs of the people which forms the basis for the formulation of attitude
from which people’s pattern of social behaviour.
Cultural Attitude
Cultural
attitude refers to an individual’s learned inclination to respond to a specific
stimulus in a particular way and values. It is also defined as an individual’s
social acquired judgment of the degree to which a particular stimulus is
desirable or undesirable.
Cultural Values
This
refers to ideas or concepts. It is value judgment on an individual but it gives
one the inclination or attitude to act in a certain way.
Multinational Corporation
These
are companies with subsidiary an operation in other countries of the world with
it does headquarter in its home country.
Organizational Performance
This
is the result of outcome of an organization from engaging in business
operations i.e. (achieving corporate goals). In other words, performance is the
extent to which an organization achieves its set target goals.
Cultural Factors
These
are those variables which are evident in the culture and which affect business
organizations. This includes norms, values, attitudes, beliefs, behaviour
customs etc.
1.9 ORGANIZATION OF THE STUDY
This
study is organized into five (5) chapters. Chapter one is the introductory
chapter, which consist of the background of the study, statement of the
problem, purpose of the study, research questions, research hypotheses,
significance of the study, scope of the study, limitations of the study
definition of terms and organization of the study.
Chapter
two is the literature review. In this chapter, articles, journals, textbooks, etc
were extensively reviewed to show what has been done on the problem area under
investigation.
Chapter
three is the research methodology which comprises of the research design,
sampling procedure, data collection method, and questionnaire design and data
analysis technique.
Chapter
four features the presentation and analysis of data
Chapter
five is the concluding chapter and it dealt with the discussion of findings,
conclusion and recommendations.
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