CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Industrial societies are changing at an unprecedented speed, influenced mainly by globalization

and global interdependence. They are also influenced by technology, education, commerce,

social networking and so on. In the heart of these changes are businesses which have continued

to grow unhindered even in the midst of all sorts of adversities. The more they grow the more

they build immunity around them to prevent failures. As they grow, they acquired enormous

political clout and power. They go into Mergers and Acquisition M&A (mergers and acquisitions

M&A, are the area of corporate finances, management and strategy dealing with purchasing

and/or joining forces with other companies), and some of those M&A are hostile. The influence

of the big businesses is so pervasive that even if you don‟t want them, you may find that sooner

than later their products would find you. This is influenced by the convergence of ideologies,

tastes, technologies, free and easy movement of people and capital, and international political

cooperation. Young people nowadays identify more with products more than with countries.

Coca-Cola products are in every nook and cranny of the planet. The same can be said of many

other products such as cars, computers, etc.

However, all these products could be as a result of the operations of the Multinational

Corporations (MNCs) from one country to another. Walter and Areskong (1981) argued that any

company that manages, owns or controls production facilities in several foreign locations

qualifies as a MNC. “Since the World War II, international business has undergone what is

probably the most important economic phenomenon of the latter half of the twentieth century,

the MNCs (Shapiro, 1986).

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MNCs have been projected by western economists such as Smith (2005); Todaro, (1977); Ulmer

(1980) etc. as the first lasting solution to problems of development to Less Developed Countries

(LDCs). It has been contended by these western economists that developing countries should

engage in inter-trades, attract direct foreign investment for a range of manufacturing industries

and to export raw materials to developed countries in order to establish their own economic

structure. With the technology and financial resources available in developed countries notably;

USA, Britain, France, China etc. it is argued that MNCs will through their investments in LDCs

help these poor countries reach their economic goals of development, most especially in the

aspect of Corporate Social Responsibility (CSR). One initiative most companies engaged in,

most especially MNCs, is the activities of Corporate Social Responsibility. CSR is all about

“responsibilities to society beyond that of making profits for the shareholders”.

CSR is significant for almost all MNCs, regardless of country of origin, size and sector. CSR is

an increasingly essential element in the business world. The first impression many people have

towards corporations is that businesses are taking advantage of consumers and society. In their

minds, they think businesses are all about profit-making, and they care less about society, the

environment, and human rights issues.

Many multinational companies have established well-developed CSR programs and adhere to

their code of conduct to do businesses ethically, help the economy grow, create larger job

markets, protect the environment, raise public attention on certain issues, and more areas to bring