Subcontracting and Multinational Firms Performance in Nigeria Manufacturing Industry

Abstract

This study sought to investigate the effect of
subcontracting on the Performance of
Manufacturing Multinational Firms (MNFs) in
Nigeria. The study employed a survey research
design, through the administration of structured
questionnaire to a sample of 397 management
staff of the three selected firms. The validity of
the instrument was tested using content validity
index (CVI) through the assessment of five
academics and five top staff of MNFs service
firms and it was rated on a two-point scale
(relevant and not relevant) which gave a value of
.8819. A pilot study was conducted through test
re-test method to ascertain the extent of
consistency of the research instrument; the result
gave a Cronbach alpha of 0.82 which indicated
that the instrument is reliable. The findings
revealed that, performance elements (cost
reduction, production enhancement, market
expansion and risk sharing) have both individual
and combine effect on subcontracting, with tvalue
of 7.02 (0.0000), 9.88 (0.0000), 5.86 and 5.42 (0.0000) respectively. While the F-value of
(63.29*0.000), (96.96*0.000), (34.52*0.000)
and (29.49*0.000) respectively, suggests that the
model is reliable for decision and policymaking.
It further indicated that subcontracting has a
positive and significant effect on MNFs
performance It is therefore recommended that,
MNFs should continuously improve and adopt
subcontracting policy towards sustainable
performance and the government through the
ministry of trade, commerce and industry should
encourage both poly and geo centric orientations
in subcontracting practices of MNFs.