Global is at Ion Ppt

PRESENTATION TOPIC:

GLOBALISATION

PRESENTED BY: Ghanshyam kumar

Reg.No-22202509003

IMAB’S

AGENDA

1. INTRODUCTION

2. MEANING AND DEFINITION

3. FEATURES OF GLOBALISATION

4. STAGES OF GLOBALISATION

5. ADVANTAGES AND DISADVANTAGES

6. ESSENTIAL CONDITIONS FOR GLOBALISATION

INTRODUCTION •  The entire globe is just like one country for business.• “Erasing national and political boundaries for the

purpose of business may be termed as Globalization”.• Globalization implies integration of the economy of

the country with the rest of the World economy and opening up of the economy for foreign direct investment by liberalizing the rules and regulations and by creating favorable socio-economic and political climate for global business.

Meaning and Definition International Monetary Fund- defines globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and international capital flows and also through more rapid and widespread of technology”.

Charles U.L.Hill- defines globalization as “the shift towards a more integrated and interdependent world economy. Globalization has two main components- the globalization of markets and the globalization of production”.

Integration of individual countries of the world may be called as globalization. Thus globalization integrates not only economies but also societies. The globalization process includes globalization of markets, globalization of production, globalization of technology and globalization of investment. 

Features of Globalization

• Operating and planning to expand business throughout the world.• Erasing the differences between domestic market and foreign market.• Buying and selling goods and services from/to any country in the

world.• Establishing manufacturing and distribution facilities in any part of

the world.• Product planning and development are based on market consideration

of the entire world.• Sourcing of factors of production and inputs like raw materials,

machinery, finance, technology, human resources, managerial skills from the entire globe.

• Global in strategies, organizational structure, organizational culture and managerial expertise.

• Setting the mind and attitude to view the entire globe as a single market.

Stages of Globalization

• Now we discuss how the globalization process takes place.

• Globalization Process• Globalization does not take place in a single

instance. It takes place gradually through an evolutionary approach. globalization has five stages. They are,

• In the first stage, Domestic company exports to foreign countries through the dealers or distributors of the home country.

• In the second stage, the domestic company exports to foreign countries directly on its own.

(i)In the third stage, the domestic company becomes an international company by establishing production and marketing operations in various foreign countries.

(ii) In the fourth stage, the company replicates (model) a foreign company in the country by having all the facilities including R&D, full fledged human resources etc.

(iii) In the fifth stage, the company becomes a true foreign company by serving the needs of foreign customers.

• Thus, globalization means global zing the marketing, production, investment, technology and other activities

•  

• Globalization: Is it Desirable?• There are two divergent views on globalization – both positive

and negative. Now we discuss the positive view of globalization or the advantages of globalization.

• Advantages of Globalization• Leading business firms, academicians, politicians and economists

argue that globalization helps for all the overall and balanced development of the world economies. The advantages of globalization include:

• Free Flow of Capital: Globalization helps for free flow of capital from one country to the other. It helps the investors to get a fair interest rate the global companies acquire finance at very lower cost of capital. Further, globalization increases capital flows from surplus countries to the needy countries, which in turn increases the global investments.

• Free Flow of Technology: As stated earlier, globalization helps for the flow of technology from advanced countries to the developing countries. It helps the developing countries to implement new technology.

• Increase in Industrialization: Free flow of capital along with the technology enables the developing countries to boost-up industrialization in their countries. This ultimately increases global industrialization.

• Spread up of Production Facilities Throughout the Globe: As stated earlier, globalization of production, leads to spread up of manufacturing facilities in all the global countries depending upon the locational and various favorable production factors.

• Balanced Development of World Economies: With the flow of capital, technology, and locating manufacturing facilities in developing countries, the developing countries industrialize their economies. This in turn leads to the balanced development of all the countries.

• Increase in Production and Consumption: Increased industrialization in the globe leads increase in production and thus results in balanced industrial development along with increase in income, which enhances the levels of consumption.

• Lower Prices with High Quality: Indian consumers have already been getting the products of high quality at lower prices. Increased industrialization, spread up of technology, increased production and consumption level enable the companies to produce and sell the products of high quality at lower prices.

• Cultural Exchange and Demand for a variety of Products: Globalization reduces the physical distance among the countries and enables the people of different countries to acquire the culture of the countries. The cultural exchange, in turn makes the people to demand for a variety of products, which are being consumed in other countries. For example, demand for ‘American Pizza’ in India and demand for ‘Masala Dosa’ and ‘Hyderabadi Biryani’ and Indian styled garments in USA and Europe.

• Increase in Employment and Income: Globalization results in shift of manufacturing facilities to the low wage developing countries. As such, it reduces job opportunities in advanced countries and alternatively creates job opportunities in developing countries.

• Higher Standards of Living: Further, globalization reduces prices and thereby enhances consumption and living standards of people in all the countries of the world.

• Balanced Human Development: Increase in industrialization on balanced lines in the globe, improves the skills of the people of developing countries. Further, the increased economic development of the country enables the government to provide welfare facilities like hospitals, educational institutes etc., which in turn contributes for the balanced human development across the globe.

• Increase in Welfare and Prosperity: The balanced industrial, social and economic development of the world nations consequent upon the globalization along with the welfare of the people and prosperity of the world countries.

• Though the globalization process produces a variety of benefits/advantages, developing countries including India have bitter experiences. These bitter experiences are due to the disadvantages of globalization

• DISADVANTAGES OF GLOBALISATION• The other side of the argument indicates that

globalization leads to commercial colonolism, which in term leads to political colonolism as Indians had experienced with the Britishers. We now discuss these arguments or disadvantages of globalization.

 • Globalization Kills Domestic Business: The MNCs

from advanced countries utilize the opportunities created by globalization; establish manufacturing and marketing facilities in developing countries. The domestic business of the developing countries fails to compete with the MNCs on the technology and quality front. This leads to closing down of the domestic companies, which is already evident in India. This is killed some of the small industries and created problems to large-scale industries.

• Exploits Human Resources: The process of globalization helps which are companies to move to the developing countries, which back adequate laws and regulations to protect human resources and the environment. The foreign industries misuse the lab our and natural resources.

• The foreign companies which are located in developing countries invariably violate the lab our and environmental laws in order to have the cost advantage. These companies employ child lab our, pollute environment, ignore workplace safety, and health issues. However, it is viewed that, the globalization enables in the developing countries to become rich and enforce (impose) the lab our and environmental regulations.

• Leads to Unemployment and Underemployment: MNCs produce the products in their home countries or in some other foreign countries and market in developing countries. Therefore, the domestic industry’s operations are to be reduced. This in term leads to reduction in employment opportunities particularly in less developed countries. In fact, Indian economy has already started experiencing the problem of unemployment and underemployment consequent upon globalization.

• Decline in Demand for Domestic Products: Selling of high quality foreign products at low prices by MNCs reduces the demand for the domestic products. Indian businessmen and farmers have already experienced this problem.

• Decline in Income: Unemployment and decline in demand for domestic products of both industrial and agricultural goods (including services) leads to reduction in income of the people.

• Widening Gap between Rich and Poor: Globalization not only results in decline in income but also widens the gap between rich and poor. This is because, competent people, people with innovative skills, efficiency etc., get abnormal income, while other average people have to strive for even a minimum wage. This results in widening the gap between haves and have-nots. For example, Indian software professionals earn a salary around Rs.1, 00,000 a month in USA, some graduates fail to earn even Rs.2000 a month in India. Widening of gap between rich and poor is a feature of capitalism.

• Transfer of Natural Resources: MNCs establish their manufacturing facilities in developing countries exploit their natural resources and sell the products in other countries. Through these means the natural resources of developing countries are transferred to other countries.

• The criticizers of globalization view that globalization results in shift of economic power from the independent countries to the super national organizations like World Trade Organizations, European Union, etc.

• Though the criticizers of globalization fear of the negative consequences of globalization, the supporters argue that, it is only a short run phenomenon.

• In the long run, the process of globalization results in the overall development of all the world nations.

• Hence, even the Arab countries are planning to globalize their economies. At this point of time, it is viewed that globalization is inevitable for the development of world nations.

• ESSENTIAL CONDITIONS FOR GLOBALISATION

• Governments of various countries should provide the following conditions for smoothening the process of globalization.

• Liberalizing the rules and regulations of control

• Removal of Quotas and Tariffs

• Providing freedom to the business and industry

• Providing infrastructural facilities

• Removal of bureaucratic (inflexible administration) hurdles

•Encouraging Research and Development

Encouraging the competitiveness based on the quality, price, delivery, customer service etc.Providing autonomy to the public sector to compete with private sector companies.

Providing administrative and governmental support

THANK YOU

ANY QUESTION…………