INTERNATIONAL

BUSINESS

GLOBALIZATION
GLOBALIZATION

POST INDEPENDENCE
SCENARIO
SCARCITY OF RESOURCES
NO FOREX RESERVES TO BUY GOODS FROM
FOREIGN MARKETS
PRIORITIES WERE SET
5 YEAR PLANNING
NO TO IMPORTS, YES TO EXPORTS
IMPORT SUBSTITUTION
PROTECTION TO OWN INDUSTRY
RETALIATION BY OTHER COUNTRIES
CLOSED ECONOMIES

 Nokia phone Finnish technology made

in China used in India by an Indian
Engineer studied in USA trained in
Germany working for a US company Ford
making American cars in India using
Japanese engine (Nissan), Korean tires
(Kumho), oil & Gas from Saudi Arabia,
German stereo (Philips) but made in China
also exported to Srilanka, Bangladesh,
Pakistan, Mauritius .
A software from US company Microsoft developed
by an Indian engineer based in Singapore used in
Japan, Australia = GLOBAL VILLAGE

DEFINITION
UNRESTRICTED TRADE AMONGST
COUNTRIES =
GLOBALISATION
Ongoing economic integration and growing
interdependency of countries worldwide.
Globalization refers to the free cross-border
movement of goods, services, capital,
information and people.
Globalization is the closer integration of the
countries and peoples of the world, brought
about by the enormous reduction in the costs of
transportation and communication and breaking
down of artificial barriers to the flow of goods
and services, capital, knowledge and people
across the borders.

Factorsinfluencing
influencing
Factors
globalization
globalization
1.
2.
3.
4.
5.
6.
7.
8.
9.

Economic liberalization
Technological breakthroughs
Multilateral institutions
International economic integrations
Move towards free marketing systems
Rising R & D costs
Global expansion of business operations
Advents in logistics management
Emergence of Global customer segment

Factors Restricting Globalisation

1. Regulatory controls
2. Emerging trade barriers
3. Cultural factors
4. Nationalism
5. War and civil disturbances

ADVANTAGES
Maximization of economic
efficiencies
Enhanced trade
Increased cross-border capital
movement
Improved efficiency of local firms
Increase in consumer welfare

DISADVANTAGES
Unequal players developed vs developing
nations
Widening gap between the rich and poor
Wipe out of domestic industry
Unemployment and mass lay-offs
Balance of payments problem
Increased volatility of markets
Diminishing power of Nation States
Loss of cultural identity
Shift of power to Multinationals
Effect on the national environment

TYPES OF Globalization
Economic Globalization.
Globalization
Globalization
Globalization
Globalization
Globalization

of
of
of
of
of

Production
Markets
competition
technology
corporations & industries

Financial Globalization
Cultural Globalization
Political Globalization