Reciprocal effects of economic development and multinational corporate strategy.

Abstract

In this dissertation economic development is defined as meaning the social, political and institutional change necessary to generate and sustain economic growth. On the basis of this definition an assessment of the relevance of contemporary orthodox economic theory to the analysis of economic development is made. It is suggested that where countries such as South Africa and the dependent states surrounding it have yet to determine such fundamental issues as the nature of their future contributions, economic systems and social structures, it is not sufficient to discuss the development problems within the analytical parameters allowed by the orthodox positivist framework. The researcher therefore utilises a grounded theory approach to examine elements of South Africa's development problem by means of an investigative study into the role of foreign direct investment in economic development. Initially the South African economic, ideological, social, cultural environment is described by means of an eclectic discursus of the literature which is used to suggest possible roles for the multinational corporation. The strategic response of foreign firms operating in South Africa is then studied by means of an analysis of extended interviews conducted with senior executives of international firms operating in South Africa who, the researcher felt, would have an overall understanding of the activities and ethos of their firm and who were not restricted by particular functional, divisional or other structurally related perceptions. In a separate appendix a set of detailed case studies briefly contrasts the shorter term operations of international service agencies and heavy engineering contractors from other European countries with this long term involvement of British manufacturing firms, concluding that their developmental contributions were negative. Reasons ranged from corruption to simple inefficiency. On the basis of this approach, the conclusion is reached that foreign enterprise has a major role to play in the political development of South Africa as one element of its economic development and that this politicisation of its role emerges from its economic activities and is inherent in areas where there is rapid economic growth in conjunction with political change. At the same time, however, where there is a lack of control over involvement which is, by the nature of the operation, essentially short term foreign enterprise may have an extremely detrimental effect on the economic aspect of economic development and thereby on the political element.

Date of Award	1984
Original language	English
Awarding Institution	University of Bath