GLOBALIZATION
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The document discusses globalization and its effects at various levels. It defines globalization as the international integration arising from the interchange of views, products, ideas and culture. Advances in transportation and telecommunication have been major factors in increasing globalization. Globalization occurs at the world level through international relations between countries, at the country level through integration with the world, and at the industry and firm levels through technological advancement and international connections.
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INTERNATIONAL BUSINESS
CHAPTER 1. GLOBALIZATION
I. INTRODUCTION
As individuals and organizations have expanded their operations across wider geographical areas, global events and competition are affecting almost all firmslarge or small. Currently, over 20 percent of world production is sold outside of its country of origin, restrictions on imports continue to decline, the foreign ownership of assets as a percent of world production continues to increase, and world trade continues to grow more rapidly than world production.
Globalization refers to the broadening set of interdependent relationships among people from different nations. International business involves all commercial transactions, including sales, investments, and transportationprivate and governmentalbetween parties of two or more countries.
II. THE FORCES DRIVING GLOBALIZATION
Several factors contribute to the trend toward increased globalization:
1. Increase in and Expansion of Technology:
Vast improvements in transportation and communications technologyincluding the Internethave significantly increased the effectiveness and efficiency of international business operations.
2. Liberalization of Cross-Border Trade and Resource Movement
Over time, most governments have been lowering restrictions on trade and foreign investments. It is believed that international competition makes domestic producers more efficient, and gives citizens greater consumer choices and lower prices.
3. Development of Services That Support International Business
Services provided by national and multinational institutions greatly facilitate the conduct and reduce the risks of doing business internationally.
4. Growing Consumer Pressures
Because of innovations in transportation and communications technology, consumers are well-informed about and often able to access foreign products. This has forced competitors to respond to the needs of consumers from all over the world
5.
Increased Global Competition
The pressures of increased foreign competition often persuade firms to expand internationally in order to gain access to foreign opportunities and to improve their overall operational flexibility and competitiveness.
6. Changing Political Situations
The transformation of the political and economic policies of Eastern Europe and East Asia (China and Vietnam in particular) has led to vast increases in trade between these countries and the rest of the world.
7. Expanded Cross-National Cooperation
Governments have increasingly entered into cross-national treaties and agreements in order to gain reciprocal advantages for their own firms, to jointly address problems that one country cannot solve alone, and to deal with areas of concern that lie outside the territory of all countries.
III.
PROBLEMS WITH GLOBALIZATION
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GLOBALIZATION
- 1. SUBMITTEDTO:- SUBMITTED BY:- MRS NIRUPINDER KAUR SNEH LATA SINHA (13339)
- 2. The term Globalization refers to processes of international integration arising from the interchange of view point, products, ideas, and other aspects of culture.Advances in transportation and telecommunication, infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.
- 3. More financial benefits To reduce the cost of production Shrinking of time and distance Growth potential of foreign markets Demand constraints in the domestic markets
- 4. Nationality of the companies Effects of liberalization Spin off benefits of globalization High tech industries
- 5. 1. Exports 2. Licensing and franchising 3. Contract manufacturing 4. Management contracting 5. Fully owned manufacturing facilities 6. Assembly operations 7. Joint ventures 8. Mergers and acquisition 9. Strategic alliance 10. Counter trade
- 6. World Level Globalization There would be no globalization of the world if all the countries live in autarky. Globalization process begins with inter economic, social and political relations between countries. Country Level Globalization Globalization of a country is indicated by the extent to which it is integrated with rest of the world. There are various inter-linkages through which a large number of cross border transactions are generated.
- 7. Industry Level Globalization Within a country, a few specific industries might be operating at the global level. Such industries have a high degree of technological advancement . Firm Level Globalization These firms have high level of technological development, strong competitive advantages, international outsourcing connections.These firms find entry to foreign markets through exporting, joint ventures.
- 8. Industry Level Globalization Within a country, a few specific industries might be operating at the global level. Such industries have a high degree of technological advancement . Firm Level Globalization These firms have high level of technological development, strong competitive advantages, international outsourcing connections.These firms find entry to foreign markets through exporting, joint ventures.
- 9. External Commercial Borrowings ECBs are an important and emerging facilitating globalization of the corporate organizations as well as the economy as a whole.The main guiding principles of the policy towards ECB. a) To obtain the borrowings at lowest possible rates with least transaction cost. b) To keep long maturity periods so that the burden is spread over a number of years.
- 10. There has been gradual movement towards rupee convertibility. Rupee convertibility means to the convertibility of rupee in a foreign currency for certain permitted categories of external transactions. Rupee was made partially convertible on trade account with effect from the year 1993-94.
- 11. In order to increase the export- GDP ratio. These include a reduction in export credit rates, both pre-shipment and post-shipment, higher duty drawback rates on a large number of export items, abolition of value items.
- 12. Competitive Larger Markets Greater Specialization International Investment Inflow Technological Gains