International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org || Volume 6 Issue 5 || May. 2017 || PP—58-60
www.ijbmi.org 58 | Page
Human Resources Management Practices and Productivity of
Selected Mncs in Emerging Market - A Case of Nigeria.
Professor K.S Adeyemi1
, Dr. Mrs. Bisayo Oluwatosin Ilori2
1
Kwara State University, Malete College of Humanities, Management and Social Sciences School of Business
and Governance Department of Accounting and Finance
2
Kwara State University, Malete College of Humanities, Management and Social Sciences School of Business
and Governance Department of Business and Entrepreneurship
Abstract: This study investigates the mode of entry of multinational corporation and their performance
Nigerian market. Research on the entry mode of multinational companies (MNCs) to Nigerian market has been
one of the major topics in the international business, and the performance factor has been regarded as one of
the major factors to explain the entry mode selection of MNCs. Based on the developing nature of the Nigerian
market, MNCs can enter a market with Franchising, Licensing agreement, Exporting, joint venture or a wholly
owned subsidiary, and Turnkey. This study test reasons for entering in the Nigerian market, modes of entering,
challenges faced by multinational during entry and finally the impact of mode of entry of MNCs and their
performance in the Nigerian market. The research adopted the survey method, with the use of the
Questionnaire. The results from the analysis on the first hypothesis show that a MNCs come into the Nigerian
market for different reasons with different modes peculiar to their organization. The second hypothesis
indicated that there are various challenges MNCs faced when entry into Nigerian market. And the third
hypothesis was supported indicating significant influence of mode of entry on the performance of MNCs in
Nigerian markets.
I. Introduction
Foreign market entry modes of multinational corporations differ in degree of risk they present, the
control and commitment of resources they require and the return on investment they promise. Entry strategy is
the method used by a company to start doing business in a foreign country (Shama, 2000). Entry strategy is an
institutional arrangement that makes possible the entry of firm‟s products, technology, human skills,
management, or other resources into a foreign country (Karkkainen, 2005). The decision of how to enter a
foreign market can have a significant impact on the results. Companies enter foreign markets because of
different motives such as gaining global reputation, assurance of long term growth, increase of profitability,
reaping the economy of scale and for other reasons such as saturation of internal market, intensity of
competition in internal market and pressure of governmental rules and regulations. In international competition,
a proper and creative entry strategy guaranties a long term presence in the market and leads to the success of the
company in international markets. The Firms that want to expand across their geographical frontiers must decide
on a fitting mode of entry into a foreign market in order to make the best use of their resources. There are
different modes of entering into foreign markets. And each mode has its strengths and weaknesses. However,
firms will be more attracted to a mode of entry depending on their backgrounds, nature of the company,
strategic objectives, structure as well as their resources. In some cases, there are many obstacles confronting
companies while deciding to enter other markets, for example; safety, environmental factors, packaging,
labeling, patents, trademarks and copyrights, are factors that businesses depend on being successful. Companies
can expand into foreign markets via the following four mechanisms: exporting, licensing, joint venture and
direct investment. All of them have their advantages for the firm to explore as well as disadvantages which must
be considered by the firm‟s top management.
Cateora and Graham (2002) stated there are six basic strategies for entering a new market:
export/import, licensing and franchising, joint venturing, consortia, partially-owned subsidiaries, and wholly-
owned subsidiaries. Generally, these represent a continuum from lowest to highest investment and concomitant
risk-return potential. In choosing a particular strategy, a company constructs a fit between its internal corporate
risk “comfort level” and the externally-perceived risk level of the target entry market. Two companies may
perceive different risks as they evaluate the same market and therefore choose different entry modes. Two
companies also may perceive the same risks in a country but still choose different strategies because of their
firm‟s differing tolerances of risk. More specifically, the different market-entry strategies can be encapsulated as
follows (Cateora& Graham 2002). The selection of markets to enter should be a strategic orientation that treats
market entry selection as part of the firm‟s overall strategy. Selecting an international market can impact on the
other activities of the firm since a firm needs to be aware of its internal capabilities, competencies and

Human resources management practices and productivity of selected MNCs in emerging market - A
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restrictions in order to select appropriate foreign target markets. International market entry barriers may include
trade barriers such as tariffs, quotas, or local content requirements, exchange rate volatility or lack of currency
convertibility, host country industrial policies that favour domestic firms, the existence of dominant competitors
in the domestic market, or natural barriers such as geographical distance, transport accessibility, or language. It
is very important for companies whether in domestic or international, large or small, that want to conduct
business to take into consideration the political environment of the country where they intend to operate
(Cateora& Graham, 1999). It is imperative for the international marketer to understand the various types of legal
systems as well as the various threats the company may encounter as it is open to global business. Marketers
need to be very aware of the cultural sensitivity and issues that are very sensitive to one‟s culture. This study,
therefore, examined the modes of strategies and their impact on performance.
1b. Statement of the Problem
The choice of entry mode has become a crucial strategy decision for firms wishing to enter
international markets, as it will have an important influence on their future business success. If a company
selects a poor market entry mode of international market entry at the beginning stage of international expansion,
it can become a threat for its future international market entries. But, there is no right international market entry
mode that can be seen as a suitable choice (Hollensen 1998). However, the strategies of mode of entry by
various Multinational Corporations have been identified and studied, but the results are mixed with regard to
identifying successful or unsuccessful strategies. Sample selection, methodology, and the confusing effects of
strategies employed simultaneously have led to these results. Also, previous studies have generally neglected the
link between modes of entry and performance. In Nigeria, there is a little or no research work made on the
particular challenges that MNCs face on selection of market entry mode and more specifically, theresultants
effect on performance. This study examined the impact of mode of entry of multinational and their performance
in the Nigerian market.
1c. Objective of the Study
The main objective of the study is to examine the mode of entry of Multinational Corporations and their
performance in the Nigerian market in the course of their business transactions.
1d. Research Question
What are the reasons for entering the Nigerian market by Multinational Corporations?
1e. Research Hypothesis
H
0
: There is no significant difference in the mode of entry of Multinational Corporations into Nigerian market.
H
1
: There is a significant difference in the mode of entry of Multinational Corporations into Nigerian market.
II. Conceptual Framework
This chapter explores relevant literature on Multinational Corporations‟ modes of entry and their
performance in the Nigerian market. This consists of the conceptual, theoretical and the empirical frameworks.
Conceptual framework is described as a set of broad ideas and principles taken from relevant fields of enquiry
and used to structure a study. It is intended as a starting point for reflection about this research and its context.
Theoretical framework is used to limit the scope of relevant data by focusing on specific variables which
involves the frame and content of the data being analysed. It also involves understanding the concepts and
variables based on the given definitions, and the relevant theory. Empirical framework is the summary of
researches on modes of entry of Multinational Corporations‟ and their performance in the Nigeria Market.
Multinational Corporation
There is no unique definition of a Multinational Corporations. However, it is generally accepted that
Multinational Corporations consist of a firm with foreign subsidiaries that extend the firm‟s production and
marketing beyond the boundaries of a single country. International production is therefore a value adding
activity, owned or controlled, and organized by a firm or group of firms outside its national boundaries
(Dunning, 1998). A Multinational Corporation owns and manages its business in two or more countries (Jacob
2005).
Multinational Corporations are „those enterprises which own or control production or service facilities
outside the country in which they are based. Multinational Corporations are corporations registered and
operating in more than one country at a time, usually with its headquarters in a single country. A firm‟s
advantages in establishing Multinationals include both vertical and horizontal economies of scale (reductions in
cost that result from expanded level of output). Multinational Corporations are enterprise operating in several
countries but managed from one country. Generally, any company or group that derives a quarter of its revenue

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from operations outside of its home country is considered as a Multinational Corporation. There are four
categories of multinational corporations: (1) A multinational, decentralized corporation with strong home
country presence, (2) A global, centralized corporation that acquires cost advantage through centralized
production wherever cheaper resources are available, (3) An international company that builds on the parent
corporation‟s technology, (4) A transnational enterprise that combines the previous three approaches.
III. Theoretical Framework