Globalisation

What are the components of the globalization process?Effects of Globalisation

“an immense enlargement of world communication and a world market” (Fredric Jameson)“the intensification of world-wide social relations” (Anthony Giddens)

“the compression of the world and the intensification of consciousness of the world as a whole” (Roland Robertson)

“Globalization in its current phase has been described as an unprecedented compression of time and space reflected in the tremendous intensification of social, political, economic, and cultural interconnections and interdependencies on a global scale.” (Stegler)

Globalization:

• Considering all the definitions above GLOBLASTION :

Globalization (or globalisation) is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.-- “stretching” of social relations across the globe-- world becomes “smaller”-- world is experienced as “one place”- capitalist market spreads everywhere

Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet,  interdependence of economic and cultural activities. business  and work organization,  economics,  socio-cultural resources, and the natural environment ,etc

What are the components of the globalization process?

Globalisation could involve all these things!

Effects of Globalisationsocial relations are stretching across the globe.

capitalist markets are spreading everywherethe negative consequences of capitalism are spread globallyIncreasing travel and migration (international tourism and domestic diversity)

Increasing communication and interaction between peoples (through all sorts of media)

Groups and cultures increasingly losing have a territorial basis

The gap between Rich and Poor is increasing

Distance are becoming almost irrelevant (the end of distance)

Competition became world-wide and became neck-tight in all aspects

Greater employment opportunitiesLiberalisation of world trade , etc

Different ways for Globalisation

Most regions of the world are getting increasingly interconnected. While this interconnectedness across countries has many dimensions —cultural, political, social and economic.Lets look at globalisation in a more limited sense. It defines globalisation as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs).

Lets understand Globalisation and it’s impact through the key idea of Integration of production and integration of markets

If we look at the past thirty years or so, wefind that MNCs have been a major force in theglobalisation process connecting distant regions of the world.

Globalisation has been facilitated by several factors. Three of these have been highlighted: rapid improvements in technology, liberalisation of trade and investment policies and, pressures from international organisations such as the WTO.

What are MNCs?A MNC is a company that owns or controls production in more than one nation.

Knights Templarfounded in 1120, Jerusalem

British East India CompanyFounded in 1600 

Dutch East India Company,founded March 20, 1602

•Arguably, the first multinational business organization was the Knights Templar, founded in 1120.After that came the British East India Company in 1600 and then the Dutch East India Company, founded March 20, 1602, which would become the largest company in the world for nearly 200 years.

Lets understad the functioning of MNCs through an example:Nestlé S.A. is a Swiss multinational food and beverage company headquartered in Vevey, Switzerland. It is one of the largest food company in the world.Nestlé has around 450 factories, operates in 86 countries including India, and employs around 328,000 people.Their goods are sold World-wide

SOME

TOP LEADING MNCS IN INDIA Nokia CorporationCorporate Office – Espoo , Finland; Area Saved-Worldwide;Employees – 97800+ ; Founded Tampere, Grand Duchy of Finland;  Business – Telecommunications Equipment , Internet , Software

Vodafone Group plcHeadquarters-London, United Kingdom; Area Saved-Worldwide;Founded-1991  Newbury, Berkshire,United Kingdom;Products-Fixed line and mobile telephony, Internet services, digital television

Bharti Airtel LimitedHeadquarters--1 Nelson Mandela Road, New Delhi, India;Industry-Telecommunications; Founded-7 July 1995;Founder-Sunil Bharti Mittal; Area served-South Asia, Africa, and the Channel Islands; Products-Fixed line and mobile telephony, broadband and fixed-line internet services, digital television and IPTV

Samsung Electronics Co., Ltd.Headquarters-Suwon, South Korea; Area served- WorldwideIndustry-Consumer electronics,Telecoms equipment,Semi conductors,Home appliances; Founded-1969 (Samsung Electric Industries)1988 (Samsung Electronics); Employees221,726+

LG Corporation Headquarters-Seoul, South Korea; Area served-Worldwide;Products-Electronics, chemicals, telecommunications, engineering, information technology, power generation;Subsidiaries-LG Electronics, LG Display, LG Telecom, LG Chem, LG Life Sciences, LG Solar Energy

PepsiCo Corporate Office – New York, U.S; Turnover – 67 Billion Dollar ;Employees – 297050+ ; Business –Food and Beverage ; Area served-Worldwide;

Ranbaxy Laboratories Ltd.Corporate Office – Gurgaon, Haryana, India | Turnover – 2 Billion Dollar |Employees – 10000+ | Business – Pharmaceuticals | Area served-125 ountries;

Coca-ColaCorporate Office – Midtown Atlanta, Georgia | Turnover – Unknown |Employees – 150500+ | Business – Beverage | Country of origin-United States ; Introduced-1886 ; Area served-Worldwide

Reliance Industries LimitedFounded-1966; Founder- Dhirubha Ambani; Headquarters-Mumbai, Maharashtra, India; Area served-Worldwide;Employees-23,519 ; Area served-Worldwide

Sony CorporationCorporate Office – Minato, Tokyo, Japan | Turnover – 80 Billion Dollar |Employees – 162000+ | Business – Conglomerate Corporation ;Founded-7 May 1946 (as Tokyo Tsushin Kogyo); Area served-Worldwide

IBM (International Business Machines Corporation )Corporate Office – Armonk, New York, U.S.| Turnover – 107 Billion Dollar |Employees – 434246+ | Business – Computer Hardware , Software, IT Services & Consulting | Area served-Worldwide

What are the common features that we can grab feom above examples?

They are originated from different countries Their goods are sold not only in their country but are sold globally most of them are estabilished in the 20th centuary they have both producers and consumers globallyYES, from the above observations we can understand the basic principle of a MNC

Some other common features of MNCS

1.MNCs have managerial headquarters in home countries, while they carry out operations in a number of other (host) countries.2. A large part of capital assets of the parent company is owned by the citizens of the company's home country.3. The absolute majority of the members of the Board of Directors are citizens of the home country.4. Decisions on new investment and the local objectives are taken by the parent company.

5.Today,A global corporation aims at market maximisation and profit-maximisation.6.  The Parent company works like a holding company. The subsidiary companies are to operate under control and guidance of parent company. The subsidiaries functions as per the policies and directions of parent organization.

7. MNCs are quality and cost conscious and managed by professionals and experts. They have their own organization culture and systems. MNCs believe in the concept of total quality management.8.Every MNC has its own Logo and Brand.

MNCs aims at market maximisation and profit-

maximisation MNCs set up offices and factories for production in regions where they can get cheap labour and other resources at low cost.MNCs also look for government policies that look after their interests. Their goods and services are produced globally.

This is done so that the cost of production is low and the MNCs can earn greater profits.So, they commonly aim at developing countries.

Now lets focus on the

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The role of MNCs in developing countries has been subject ed to severe criticism. 1. MNCs exploit local labor and resources by paying relatively lower prices and lower taxes than local firms while obtaining high profits that are largely repatriated.2. By over pricing imports and under invoicing exports that are booked through subsidiaries in tax free ports, MNCs can repatriate more profits than are permitted by host countries.

From Peoples view:

3.Competition from MNCs affects local industry adversely.4.In the pursuit of profit, multinational companies often contribute to pollution and use of non renewable resources which is putting the environment under threat.

5.The MNCs are profit oriented. They show a strong tendency to take up the production of those commodities in which they can earn a high profit margin. They ignore the production of more important commodities if they do not give them the required profit margin. This results into the allocation of resources to the production of low priority goods. The local producers also show a tendency to enter into the low priority industries if they are more profit earning.

Tea is a commercial commodity

6.The MNCs are accustomed to use a particular type of technology which is suitable for conditions in developed countries. They bring that technology to the developing countries, but that technology is not suitable for the developing countries. There is excessive supply of labor in developing countries. The technology introduced by MNCs is not proper for absorbing labor. It aggravates the problem of unemployment.

7.Often the MNCs give a cordial treatment to their own persons & a step motherly treatment to the staff belonging to the host country. This creates discontent amongst the staff & labor.

8.The MNCs often use their money power for bringing pressure upon the government & political parties of the host countries. They interfere in the administration of the developing countries.

9.MNCs often use their economic power to get acess from host governments without giving safe working environment for labour and tries to close the mouth of officials.

While globalization has benefited well-off consumers and also producers with skill, education and wealth, many small producers and workers have suffered as a

result of the rising competition. Fair globalization would create opportunities for all, and also ensure that the benefits of globalization are shared better.

Lets understand the Negatine effects of Globalisation through MNCs by some examples :

BHOPAL GAS TRAGEDYIs Because of Qwench for Money

Pollution of Rivers

East India CompanyBefore 1857

The Bhopal disaster, also referred to as the Bhopal gas tragedy, was a gas leak incident in India, considered the world's worst industrial disaster. It occurred on the night of 2–3 December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, Madhya Pradesh. Over 500,000 people were exposed to methyl isocyanate gas and other chemicals.

BHOPAL GAS TRAGEDY

UCIL ,Bhopal

oUnion Carbide India Limited (UCIL) was a chemical company established in 1934, eventually expanding to employ 9,000 people working at 14 plants in five divisions.[1] UCIL was 51% owned by Union Carbide Corporation (UCC) and 49% by Indian investors including the Government of India.o UCC is now a subsidiry of an American MNC , Dow Chemical Company o Factors leading to the magnitude of the gas leak mainly included problems such as; storing MIC in large tanks and filling beyond recommended levels, poor maintenance after the plant ceased MIC production at the end of 1984, failure of several safety systems due to poor maintenance, and safety systems being switched off to save money.

Bhopal gas tragedy effects

Pollution of Rivers

Expansion of MNCS led to Industrialisation in Developing Countries It is indirectly Leading to the Pollution of Rivers.

GANGES POLLUTIONCountless tanneries, chemical plants, textile mills, distilleries, slaughterhouses, and hospitals contribute to the pollution of the Ganges by dumping untreated waste into it. Industrial effluents are about 12% of the total volume of effluent reaching the Ganges. Although a relatively low proportion, they are a cause for major concern because they are often toxic and non-biodegradable.

GANGES POLLUTION

EAST INDIA COMPANY FLAG

Impact on Indian Silk growers

In the eighteenth century, Indian silk was in demand in European markets.As the market expanded, East India Company officials tried to encourage silk production to meet the growing demand. Hazaribagh, in present-day Jharkhand, was an area where the Santhals reared cocoons. The traders dealing in silk sent in their agents who gave loans to the tribal people and collected the cocoons. The growers were paid Rs 3 to Rs 4 for a thousand cocoons. The Middlemen made huge profits. The silk growers earned very little.

East India CompanyBefore 1857

What Happened to Weavers?

European trading companies – the Dutch, the French and the English – made enormous profits out of this flourishing trade. These companies purchased cotton and silk textiles in India by importing silver. When the English East India Companygained political power in Bengal, it no longer had to import precious metal to buy Indian goods. Instead, they collected revenues from peasants and zamindars in India, and used this revenue to buy Indian textiles. This led to poverty in India. By the beginning of the nineteenth century, English-made cotton textiles successfully ousted Indian goods from their traditional markets in Africa, America and Europe. European companies made no polocies to protect Indian weavers. Thousands of weavers in India were now thrown out of employment. Bengal weavers were the worst hit. English and European companies stopped buyingIndian goods. In this way East India Company

exploited indian economydestroying lives of thousands of Indians.

CONCLUSIONGlobalization is the process ofrapid integration of countries.This is happening throughgreater foreign trade and foreign investment. Technology, particularly IT,has played a big role inorganizing production acrosscountries. Liberalization of trade and Summing up investment has facilitatedglobalization by removing

barriers to trade andinvestment.

While globalisation hasbenefited well-off consumersand also producers with skill,education and wealth, manysmall producers and workershave suffered as a result of therising competition. Fairglobalisation would createopportunities for all, and alsoensure that the benefits ofglobalisation are shared better.

liberalization  refers to a relaxation of previous government restrictions, usually in such areas of social and economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation.[1] Liberalization of autocratic regimes may precede democratization