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The total quality of management is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes. This study examined how multinational corporations use total quality management to penetrate different layers of the economy and the effect of product quality maintenance in the demand of their product. The major findings from the study show that the studied multinational corporations take total quality management seriously because it is what makes their brand unique and different from any other brand in the market. And the quality of their product affects the demand of their products. In conclusion, if multinational corporations ignore the important of TQM in their corporation, the employees will fail to rethink what they do and they will fail to be more involved in workplace decisions thereby creating low quality even producing below the standard.
1.1 BACKGROUND OF THE STUDY
Multinational Corporation is any organization that odes manufacturing and marketing in many different countries William G. (1999). A Multinational Corporation is any firm with foreign subsidiaries, which extend the production and marketing of the firm beyond the boundaries of any one country Eze (1998). The first multinational corporation (MNC) established with a global orientation grew out of a merger in 1929 between margarine unie, a Dutch Firm and Lever Brothers, a British Company. The company became Unilever and it has since become one of the largest companies in the world with over 500 subsidiaries operating in about sixty nations throughout the world.
The operation of multinational companies in their host countries are independent due to the different requirement of
customers of different countries. They operate autonomously each catering to the special requirements of it’s own national market requirement. In pursuing a national responsiveness strategy, the primary competitive advantage of MNCs was grounded in its ability to transfer technology, manufacturing know-how, brand name, identification and marketing and management skills from country to country. Standardized administrative procedures helped multinational companies to minimize their overhead costs in managing subsidiaries in the host country. They always negotiate with governments of the host countries before embacking on any production activities, this will now give them the ability to determine the opportunities and threat face with their establishment.
During the 1970s, Multinational Corporation began to lose their effectiveness due to the change in the customers needs. Competition broke out on a global scale in more and more companies. Japanese, European and U.S companies pursued international expansion because their home market can no more consume the quantity they produce in their countries.
Many companies changed their operational and corporate strategy in order to match the requirement of foreign market. They try to gain household name in their host country by offering lower prices, higher quality goods, which will be attractive to the consumers.
Coca-cola, general motors, ford, IBM General Electric, Gulf Oil, Lever Brother, John Holt, UAC, Julius Berger, RCC and similar others, which produce consumer goods and manufacturing of products started using total quality management in their organization. They started controlling the economic activities in the developing countries due to hi-technology use by their companies. In the same vein, the control of most of the meaningful economic activities in developing countries by multinational corporation give them very wide jurisdiction on the manipulation of the economic policies and circumstance of the host countries, Odike (2001).
There are different categories of Multinational Corporations base on their area of specialization in the business they
engage in, as well as the way they perform their business activities strategically. But there is something, which is common to all multinational corporations. They are companies or business, which take their capital along with their technology abroad in order to get sources of cheap labour and market for the ready consumption of their manufactured goods. Corporations today are increasingly multinational in their business activities. Host countries have started to think the effect of these companies to their environment, the moral responsibilities they have for them. Fiscal and monetary policies of the developing countries can be seriously thwarted or badly influenced by the economic power of these multinationals; Prasad S.B. (1976). These things in many instances have brought political and economic disruptions in many countries like in the Niger Delta of Nigeria.
Globalize strategies offered these multinational corporation opportunities to choose any strategy to enter any developing country. They identify the requirement of the market and analyze the environment (political, cultural, economic etc) in
order to know the opportunities and threat that are facing their company. Multinational Corporations exploit differences in tax rates; choose appropriate entering strategy, which will maximize the profit of their company. They may decide to use direct export, indirect export, joint ventures, licensing and direct investment depend on the human and material resources that will help to the effective production of the goods and services of MNCs. As a consequence of these advantages, it became increasingly difficult for a company that produced and sold it’s product in only one country to succeed in an industry populated with aggressive competitors in lent on achieving global dominance.
During the 1980s, another source of competitive advantage began to emerge by using the strategic fit advantages of related diversification to build stronger competitive positions in several related global industries simultaneously. Being a diversified multinational corporation became competitively superior to being a single – business multinational corporation in cases where strategic fits existed across global industries.
Related diversification is most capable of producing competitive advantage for a multinational company where expertise in a core technology can be applied in different industries (at least one of which is global) and where there are important economies of scope and brand name advantages to being in a family of related business. It has been indicated that Honda’s strategies in exploiting gasoline engine technology and it’s well known name by diversifying into a variety of products with engines.
First World Multinational Corporations (MNCs) are both the hope of the Third Word Countries and the source of their strength. Third World Countries frequently seek to attract American multinationals for the jobs, they provide and for the technological transfers they promise. Yet when American multinational corporations locate in Third World Countries, many Americans condemns them for exploiting the resources and workers of the Third World. While MNCs are a means for improving the standard of living of the underdeveloped countries. Multinational corporations are blamed for the
poverty and starvation, such countries suffer. Although multinational corporations provide jobs in the Third World, many criticize them for transferring these jobs from the United States. American MNCs usually pay at least as high wages as local industries, yet critics blame them for paying the workers in underdeveloped countries less than they pay American workers comparable work.
Finally, it is good to differentiate the multinational corporation from globalization. Since Multinational Corporation is any company that does manufacturing and marketing in many different countries, globalization is a company that manufactures the component parts of a product in different countries. They use global strategy, which involves i
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