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IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION 2009-10 SUBMITTED TO: SUBMITTED BY: Mr. Geetenjali ANUBHAV SINGH LECTURER IN MANAGEMENT MBA 4th SEM REG .ID .10810155
With immense pleasure I would take this opportunity to acknowledgement the invaluable assistance and cooperation extended to me by certain individuals for the successful completion of my dissertation work. I consider it as a privilege to thank all those who have helped me in completing my work. First of all I would to thank my guide Lec. Geetenjali for his constant motivation and valuable help throughout the work and whose support has helped me to complete my work in the stipulated period period of time.He persistently encouraged me to strive for excellence. He taught me to think critically and to have self-discipline. As my advisor, he was readily available and gave prompt advice during the dissertation process
I express my sincere and profound gratitude to Mr. Navjeet singh (international business Lectuter ), for his kind support in guiding me, selecting a dissertation guide. I would also like to extend my warm feelings and sincere thanks Librarian for his ample help.
Table of content 1. 2. 3. 4. Title page Acknowledgement Scope of the study Limitation of the study
5. Introduction of globalization 6. Objective of the study 7. Controversy about The Globalization 8. Present scenario (In India or globally both) 9. Strategy ( what strategy they applied in market) 10. Future of the Globalization 11.Business standard 12.Benefits of globalization 13.Disadvantage of globalization 14.Discussion 15.Findings 16.Recommendation 17.Conclusion 18.References and bibliography
1- SCOPE OF THE STUDY
The emphasis of this dissertation is on how the degree of cooperation in company marketing alliances enables firms to manage globalization effects and stay competitive in international markets. This project report is all about the how the Globalization affect the Indian economy
Similarly. Past literature also suggests that firms from emerging economies usually possess characteristics which distinguish them from those of developed economies. and performance of firms from Thailand and the U. The data collection using survey technique is thus used. firms form alliances to reduce competition and uncertainty. Through such cooperation. firms are likely to form alliances .. are undertaken by a primary data approach. empirical investigations on the relationships among globalization effects. .and the role of the globalization in the progress of the economic growth . firms tend to cooperate with other firms to capitalize on and leverage their limited resources since it is impossible for one firm to “do it all and go it alone.S. To better capture global opportunities. in order to cope with increasing global competitive threats. As suggested in past literature. Therefore. which possess different backgrounds and characteristics.Based on the classical industrial organization perspective—the market power. degree of comarketing alliances. globalization makes alliances an essential part of a firm’s strategy in order to stay competitive and to achieve superior performance. companies gain market power that helps alleviate competition and improve its competitive position.
corporations— have been buying from and selling to each other in lands at great distances.2- Globalization is a process of interaction and integration among the people. author Thomas Friedman has said that today globalization is “farther. Likewise. and migration so large that many observers believe the world has entered a qualitatively new phase in its economic development. and deeper. a process driven by international trade and investment and aided by information technology. on political systems. In the years since the Second World War. many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914. cheaper. many governments have adopted free-market economic . Since 1950. Distinguishing this current wave of globalization from earlier ones. and from just 1997 to 1999 flows of foreign investment nearly doubled. Globalization is not new. and governments of different nations. and on human physical wellbeing in societies around the world. for centuries. This process has effects on the environment. such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. companies. from $468 billion to $827 billion. though. For thousands of years. for example. faster. people and corporations have invested in enterprises in other countries. on culture. later.” This current wave of globalization has been driven by policies that have opened economies domestically and internationally. on economic development and prosperity. In fact. the volume of world trade has increased by 20 times. people—and. and especially during the past two decades. But policy and technological developments of the past few decades have spurred increases in cross-border trade. investment.
A defining feature of globalization. Taking advantage of new opportunities in foreign markets. is an international industrial and financial business structure. Globalization is deeply controversial. Information technologies have given all sorts of individual economic actors—consumers. in particular. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of . businesses—valuable new tools for identifying and pursuing economic opportunities. therefore. and collaboration with far-flung partners. vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Advances in information technology. Technology has been the other principal driver of globalization. including faster and more informed analyses of economic trends around the world. and investment. however. easy transfers of assets. have dramatically transformed economic life. investors. corporations have built foreign factories and established production and marketing arrangements with foreign partners.systems. services.
The stock of international claims (primarily bank loans). and common people. Globalization can also create a framework for cooperation among nations on a range of non-economic issues that have cross-border implications. Innovators—be they in business or government—can draw on ideas that have been successfully implemented in one jurisdiction and tailor them to suit their own .4 percent of the world population) in 1965 to 191 million people (3. and people. as a country's citizens recognize the competitive challenge before them. goods.8 percent in 2006. have become more globalized. on a per-capita basis. At the same time. • The growth in global markets has helped to promote efficiency through competition and the division of labor—the specialization that allows people and economies to focus on what they do best. as a percentage of world GDP.2 The number of foreign workers has increased from 78 million people (2. The broad reach of globalization easily extends to daily choices of personal. It means that they can have access to more capital. For example. and political life. while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises. greater access to modern technologies.3 in 1991 to 28.1 percent in 1980 to 62. could make the difference between life and death.0 percent of the world population) in 2005. it would facilitate commerce and education. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital. Countries must be prepared to embrace the policies needed. labor. and ideas that constitute the current wave of globalization. There are countless indicators that illustrate how goods. economic. In the world of communications.8 in 2006. may need the support of the international community as they do so. local cultures. in the case of the poorest countries.1 percent in 2007. and allow access to independent media. Perhaps more importantly. increased from roughly 10 percent in 1980 to 48 percent in 2006. cheaper imports. • • • • The value of trade (goods and services) as a percentage of world GDP increased from 42. Foreign direct investment increased from 6.5 percent of world GDP in 1980 to 31. increased from 7. and capital into a country can create incentives and demands for strengthening the education system.1 The number of minutes spent on cross-border telephone calls. capital. and. and legal issues. But markets do not necessarily ensure that the benefits of increased efficiency are shared by all. and larger export markets. the influx of foreign goods. such as immigration. technology. the environment. services. globalization implies that information and knowledge get dispersed and shared. in the world of health care.living. Global markets also offer greater opportunity for people to tap into more diversified and larger markets around the world.
What steps India ’s may take 5. both in developed and emerging economies (i.e.jurisdiction. To study “Is globalization useful for business. the study indicates the extent to which firms in two different economic contexts are affected by globalization. has nonetheless observed that globalization "has reduced the sense of isolation felt in much of the developing world and has given many people in the developing world access to knowledge well beyond the reach of even the wealthiest in any country a century ago. the U. To study the threats and opportunities globalization is creating. respectively). It also shows which dimension of globalization effects tends to have stronger impact on the performance of firms that are located in very different market environments.S. a Nobel laureate and frequent critic of globalization. Some Questions arises while studying this topic 1. Just as important.” ." 1- OBJECTIVE OF THE STUDY The primary objective of this research is to gain a better understanding of the effects of globalization on firms’ international marketing cooperation and performance of firms. The first two questions of this dissertation are: 1) Does globalization affect firm performance? 2) is the relationship between global market opportunities and performance stronger than the relationship between global market threats and performance? By answering these questions. To study the different strategies used by the companies in this environment. environment and business or marketing. 2. Joseph Stiglitz. they can avoid the ideas that have a clear track record of failure.. 3. 4. and Thailand. Up to what extent Globalization is affecting different aspects of our life including culture.
including development of a large relational database that offers 3.S. 2-Tonernow. The partners examine whether to move from their . economy. The two entrepreneurs discuss what it took to launch their web site in late 1999. and understanding the pros and cons of integrating into a related set of activities.000 products.1. This localization can either be done in-house by Microsoft. Two young founders of a brick-and-mortar company recently turned dotcom received communications from all over the world soliciting their participation in licensing agreements. Also discusses the "holdup" problem that arises when assets specific to a particular partnership are created. Microsoft has to localize its software products for use in the PRC. and other similar relationships. Teaching Purpose: Structuring a newly developing industry.Review of Literature Case study 1- Microsoft in the People's Republic of China—1993 Description of the Case Explores some of the economic and political tradeoffs that need to be negotiated by a firm seeking to influence industry structure. market entry in an emerging economy. or can be contracted to the local software vendors. partnerships.com: A Dotcom Goes Global Description of the Case In Spring 2000. dotcom euphoria grips the U. and venture capital is easy to obtain. The setting is the nascent personal computer software industry in the People's Republic of China (PRC) in 1993. Explores the costs and benefits of full integration and arms-length market transaction.
3- NESTLE BREAKFAST CEREAL (A & B) Description of the Case General Mills and Nestle were meeting to discuss the possibility of cooperation between the two companies in the breakfast cereal business. The joint venture was of interest to Nestle because its European breakfast cereal business had been performing poorly. The executive vice-president had recently decided that Nestle should consider taking a partner in the breakfast cereal business and had collected some information on General Mills. Joint Ventures. and what changes the company would need to make for the business to be a success. and the product choices Procter & Gamble . The case examines the former Soviet Bloc countries. General Mills was interested because it has no significant breakfast cereal business outside of the United States. Executives from General Mills were arriving in a week's time and an executive vice-president at Nestle was charged with preparing a briefing on General Mills before their arrival. European Market 3- PROCTER & GAMBLE IN EASTERN EUROPE Description of the Case Procter & Gamble must determine an entry strategy for Eastern Europe.position as a small domestic player to a global one. Customers are sensitive to price and convenience. The toner supplies industry is a highly fragmented segment within the office supplies industry. the opportunity they provide for a business endeavor like Procter & Gamble. However.S. The balance between global strategy and local operations is central to this case. Issues include licensing and web site localization for non-U. access. Main issue of the case Decentralization. and high-quality service with quick product delivery is the key to success. the fundamental issue was why Nestle had not made a success of the business in Europe.
international marketing. and technological (PEST) environment and determine if the newly liberalized economies of Eastern Europe provide appropriate investment opportunities for Procter & Gamble. Students must also determine the scope of the necessary investment.has available to them. is clearly centered on exports to the U. Uncertainty Pop culture 3- PALLISER FURNITURE LTD. management perceives risks and limitations to growth with their current product/market position and must decide whether and how to change. Description of the Case Palliser is a large. Plant Location DUPONT TEFLON: CHINA BRAND STRATEGY Description of the Case DuPont had spent six years helping licensee manufacturers to develop the domestic market for non-stick cookware. economic. or strategic management. the time profile and the difficulties it may face . This case is suitable for a course on international management. Main issue of the case – Globalization. However. societal. Management is faced with a foreign entry mode decision in Mexico and/or China. Canada. Business Policy. that must respond to the increasingly global nature of its business. Students must examine the political. a product of international trade liberalization.S. successful family-owned furniture manufacturer in Manitoba. Its current business strategy. Main issue of the case – 3- International Business strategies Market Entry. While DuPont Teflon brand coating held 80 per cent . Investment Analysis.
has to formulate an export strategy. Main issue of the case – Global Product. market. distribution channels and patience. The purpose of the case is to examine the issues around leadership and product development that DuPont considered in their decision to go from licensing the manufacture of non-stick coating technology in China. skills. Main issue of the case – Tariff barriers Duty Different aspect of business 3. It has twice failed to penetrate the U. which also offer different positioning and pricing proposals. 3- MontGras: Export Strategy for a Chilean Winery Description of the Case MontGras. Management Decisions Product Management. and is deciding between two new potential partners.of the non-stick market. Moreover. a medium-size Chilean winery. the amount of money spent on developing the non-stick market exceeded the revenue that DuPont received in the Chinese market. but it would require new efforts. It has to decide whether to emphasize the U. the non-stick market overall represented 2 per cent of the domestic cookware market.K. If DuPont decided to take a different role in the market.S.PATAGON. it faced many obstacles that required significant additional investment. Brands. or U. Teaching Purpose: To develop skills in market assessment and evaluation of export marketing strategies.COM: EXPANDING GLOBALLY AND PENETRATING LOCALLY WHILE CONSTANTLY REINVENTING ITSELF Description of the Case . it is offered participation in a supermarket promotion that will boost volumes but at the expense of price maintenance.S. markets. to introducing a wholly owned brand of non-stick cookware. because distributor relationships fell through. It appeared that the domestic market offered tremendous opportunity. In the United Kingdom.
A. The rapid growth has strained its ability to adequately integrate the companies it is acquiring. The U.Founded in 1998. subsidiary is currently the target of a consumer boycott because of the company's current and historical marketing programs.RUSSIA 1992 Description of the Case Russia was in transition from a planned to a market economy. Main issue of the case – Different Entrepreneurship style in different country E-Commerce. The substantial changes in and growth of its business and operations had placed significant demands on the company's administrative. -.Infant Formula (Abridged) Description of the Case The new vice president of infant and dietetic products of Nestle Alimentana S.S. Introduces the question of using Western marketing techniques in the Third World. develop management systems and enterprise design that would handle the growing complexity. Organizational Change 9 -Nestle Alimentana S. technological and staffing resources.A.and at the same time. has to make recommendations on the company's marketing programs for its infant formulas in developing countries. Pepsi had preceded Coke into the former Soviet Union and was optimistic that it could further increase its .PEPSI CHALLENGE . Main issue of the case – Social factor Legal factor Political factor Cultural factor 10 . Patagon. and potential product misuse because of consumer poverty.com is a pioneer in Latin American Internet-based financial services. ignorance and culture factor of that country . operational. The challenge for the management team is to integrate the confederation of country-specific organizations while maintaining the agility and responsiveness of a small firm . Strategy Development. the problems of distributor control.
market presence. Main issue of the case – Indigenization. he found an incomplete business infrastructure. They can establish educational programs. International Business strategies FORCES OF GLOBALIZATION Why Go Global? The playing field is wide open for small business. • Raise profitability. Small business in particular can take a mentoring role in educating other men and women in going global. Recently arrived in Moscow. it required a Russian organization to implement its strategy. Employee Selection. promote professional growth and leadership among all small business owners. productivity growth and wealth. cultural and ethical issues to contend with. The best is truly yet to come. What Does It Take To Go Global? . they now needed to hire and develop Russian employees and managers. However. was tasked with building the Russian organization. Here’s why both men and women should consider going global: • Increase sales. conferences and other activities to advance their colleagues. ideas and information. • Encourage the exchange of views. • Insulate seasonal domestic sales by finding new foreign markets. Subsidiaries. • Generate economies of scale in production. The case is written to illustrate the localization challenges confronting a mid-level transition manager. as well as develop staffing compensation and training priorities for the new Pepsi Russian organization. fluid and uncertain regulations and few Russians with relevant business experience. While Pepsi had previously run its Soviet operations from Vienna. His challenge was to hire a Sales manager and a Technical Engineering manager. language. A 31 year-old human resources manager in Pepsi International. • Create jobs. and in doing so.
3. Welcome new experiences. Push yourself to continuously innovate. But becoming a successful global small business requires the following commitments: • • • • Be comfortable with change. and learn as much as possible about the culture in which you are interested in doing business.Controversy The negative impact of globalization in European job market . even though it may create short term challenges. strategic and willing to take calculated risks. Be willing to take risks.Any small business owner must be adaptable.
The fashionable concept of globalization removes the barrier of country border and the international market of open for the job seekers. The cost cutting management process of private companies in Europe and negative managerial process change the picture of job market. Not only have the investors chosen the Asian countries as a destination for outsourcing their back office jobs but also set up new business processing firm in countries like Indian to employed low cost skilled labors.Globalization was not to much accept by the European companies. . The impact of globalization changes the global business opportunities. To face such economical declined some serious steps are taken by the European nations. They depend on the local labor for good production and better management. As a result the European nations like Germany and the UK are facing some unemployment problem of skilled laborers during the 90s. As an industrial location the European nations changes their taxation system and encourage industrial countries in employment of local employees to solve this problem in a positive solution. The business process outsourcing reduces the wages cost and the work load is transferred into the outsourcing destination like Asia and Africa.
However this makes a new scope for European job seekers to find their suitable job in management. Globalization drives people to change their ways of living. Skilled works from different fields like IT and Automobiles loss their job as because those companies have opened their business center in Asian market. They reduce the local work forces and increase the international working force for low costing. the Asian financial crisis in 1997 has severely affected businesses around the world and the outbreak of SARS (Severe Acute Respiratory Syndrome) in 2003 has shown how globalization permits the rapid spread of the disease. They made no compromise with their product or services and successfully running there business for European market as well as the Asian markets also. and environmental interdependence among nations. For example. political. This increases the business opportunities for the small and medium investors of Third worlds countries and open new job opportunities for the educated skilled workers. The managerial success of a company highly depends on the profit and growth and it is highly depends on the cost efficiency of labors. Virtually. Given these changes. spurs nations to establish new national policies. . cultural. The employers moving ability from one place to another in searching of low waging cost reduces the job opportunity of Germany and the UK job seekers. everyone is affected by this process.Business center and even the educational institute expand their services globally for international customers. HR and IT in India and this country is the best place for living as the cost of living is comparatively lower then the salary that provide by any good employer. financial. The European labors market faced a negative impact due to globalization in mid 90s. market. Events transpiring in different parts of the world now have dramatic consequences to other parts of the world at a faster pace than anyone could imagine in the past. social. which affects many airlines. The extra ordinary competitions in labor market are helping the employers with the facility of choosing the best services at low prices. EFFECT OF GLOBALIZATION ON DIFFERENT ASPECTS Globalization is an interesting phenomenon since it is obvious that the world has been going through this process of change towards increasing economic. prompts firms to change their ways of conducting business. and. and other businesses around the globe. the hospitality industry. globalization brings about a borderless world.
AT Kearney and EDS Company. because every nation—regardless of size or level of development —is globalized and affected by globalization.g. Global market threats refer to the increases in the number and level of competition. Thus.. one that cannot be simply ignored. Throughout this dissertation. Exports.Present scenario of the topic International Trade A core element of globalization is the expansion of world trade through the elimination or reduction of trade barriers. while providing strong incentives for domestic industries to remain competitive. . have a competitive advantage. the extent to which each country is globalized is not identical. 3. These two major effects are chosen to be investigated here because they are frequently cited in the past literature as the most apparent and immediate effects of globalization. More generally. it is not surprising that businesses are inevitably affected. and their country. which would be a source of employment for the local workforce and could bring along new technologies—thus promoting higher productivity. e. trade enhances national competitiveness by driving workers to focus on those vocations where they. The globalization of production and operations benefits firms through the realization of economies of scales and scope. Greater imports offer consumers a wider variety of goods at lower prices. Global market opportunities refer to the increases in market potential. a globalization index was recently developed by a cooperation between Foreign Policy Magazine. Hence. the auto and electronics industries.On the positive side. The index indicates that some small developing countries in emerging economies such as Singapore and Malaysia were among the top twenty most globalized nations from 2001 to 2004 with Singapore being ranked as the most globalized nation. and the level of uncertainty. such as import tariffs. With the prevalence of this worldwide phenomenon. To measure the degree of globalization of each nation. globalization enables firms to outsource and find customers around the world. trade and investment potential and resource accessibility. no one can deny that globalization has changed the way we conduct business. Greater openness can also stimulate foreign investment. stimulate job creation as industries sell beyond their borders. often a source of economic growth for developing nations. as higher imports help to offset adverse domestic supply shocks. Trade promotes economic resilience and flexibility. Although globalization is a worldwide phenomenon. the effects of globalization are classified into two broad Categories: 1) Global market opportunities and 2) global market threats. it is clear that globalization is an important phenomenon.
has observed that. well-organized and politically-connected groups. it has declined significantly over the last several decades. as a result of poor economic performance under protectionist polices and various economic crises. Ernesto Zedillo. this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods. while the average tariff rate applied by developing countries is higher than that applied by advanced countries. many developing countries began to dismantle their barriers to international trade. the former president of Mexico. Overall. at the expense of those whose interests may be more diffuse (such as consumers). many of which may be poor. Developing countries can benefit from an expansion in international trade. Protectionism also tends to reward concentrated. Global capital flows fluctuated between 2 and 6 percent of world GDP during the period 1980-95."4And the trend is clear. In the late 1980s. but since then they have risen to 14. For example.Restricting international trade—that is. It also reduces the variety of goods available and generates inefficiency by reducing competition and encouraging resources to flow into protected sectors. and technology. The implications of globalized financial markets The world's financial markets have experienced a dramatic increase in globalization in recent years. tariffs raise the prices of imported goods. more than tripling since 1995.2 trillion. engaging in protectionism—generates adverse consequences for a country that undertakes such a policy. In the 1990s. The most rapid increase has been .8 percent of GDP. "In every case where a poor nation has significantly overcome its poverty. investment. and in 2006 they totaled $7. many former Eastern bloc countries integrated into the global trading system and developing Asia—one of the most closed regions to trade in 1980—progressively dismantled barriers to trade. harming consumers.
As countries have strengthened their capital markets they have attracted more investment capital. encourage international risk sharing. which can enable a broader entrepreneurial class to develop. facilitate a more efficient allocation of capital.experienced by advanced economies. Cross-Border Assets and Liabilities (Percent GDP) . but emerging markets and developing countries have also become more financially integrated. and foster economic growth.
1 Data series bein in 1995 for central and eastern Europe and the Commonweatlth of Independent States. A recent paper by the IMF's Research Department takes stock of what is known about the effects of financial globalization.5 The analysis of the past 30 years of data reveals two main lessons for countries to consider. First. Others see it as injecting dangerous—and often costly—volatility into the economies of growing middle-income countries. Some see it as a catalyst for economic growth and stability. Yet there is an energetic debate underway. The evidence points to largely unambiguous gains from financial . among leading academics and policy experts. on the precise impact of financial globalization. the findings support the view that countries must carefully weigh the risks and benefits of unfettered capital flows.
per capita incomes have risen across virtually all regions for even the poorest segments of population. and additional administrative/monitoring costs. and prudential regulation. income inequality has risen in most regions and countries. long-term. Consumption data from groups of developing countries reveal the striking inequality that exists between the richest and the poorest in populations across different regions. In emerging and developing countries. For example. Opening up to foreign investment may encourage changes in the domestic economy that eliminate these distortions and help foster growth. Over the past two decades. well-developed financial markets help moderate boom-bust cycles that can be triggered by surges and sudden stops in international capital flows. other countries that have rejected globalization. higher investment costs for firms. but under certain conditions (such as good institutions. . and poverty As some countries have embraced globalization. poorer economic incentives. debt-creating inflows. although incomes for the relatively well off have increased at a faster pace. should be liberalized before short-term. income inequality. and developed financial markets) the benefits from financial globalization are likely to outweigh the risks. the main policy lesson that can be drawn from these results is that capital account liberalization should be pursued as part of a broader reform package encompassing a country's macroeconomic policy framework.integration for advanced economies. sound domestic and foreign policies. Looking forward. and experienced significant income increases. Globalization. These costs include lower international trade. inevitably. The second lesson to be drawn from the study is that there are also costs associated with being overly cautious about opening to capital flows. Moreover. domestic financial system. certain factors are likely to influence the effect of financial globalization on economic volatility and growth: countries with well-developed financial sectors. non-debt-creating flows. indicating that the poor are better off in an absolute sense during this phase of globalization. such as FDI. sounds macroeconomic policies. and substantial trade openness are more likely to gain from financial liberalization and less likely to risk increased macroeconomic volatility and to experience financial crises. while strong domestic institutions and sound macroeconomic policies help attract "good" capital. Countries should still weigh the possible risks involved in opening up to capital flows against the efficiency costs associated with controls. have fallen behind. or embraced it only tepidly. strong institutions. At the same time. such as portfolio equity flows and FDI. been bigger beneficiaries of globalization than others. A similar phenomenon is at work within countries—some people have.
Section 2 summarizes the economic changes in period 1985 to 2005 with special focus on the liberalization attempt in 1991 and its aftereffects. N. reached to such a realization that gains from trade are there to reap and the economic transition necessary for globalization is a precondition for wider economic growth? This paper attempts to investigate if globalization is a cause of India’s economic growth and if the new culture of trade policy change in India is there permanently or temporarily. when Mr. Rajiv Gandhi was at the helm of policy design. The real question is how did the economy that was an “almost autarky” from 1950 to 1985 period. Jagdish Bhagwati and T.EFFECT OF GLOBALIZATION ON INDIA’S ECONOMIC GROWTH INTRODUCTION: As a new participant in the globalization wave. Section 3 summarizes results and makes a conclusion. Srinivasan. the process began that for a while slowed down a little but rarely anyone was in doubt about its existence. The recent reports show that Indian economy grew at the record breaking and astonishing pace of 8% growth in real GDP in 2003-2004. The present paper is organized as follows: Section 1 makes the survey of trade policy in period 1950 to 1985. India went through several structural and policy changes only in early 1990s. In general it is not very hard to prove that even a limited attempt of globalization has benefited Indian economy in the best possible way. As it is argued numerous times in other circles and by other economists (such as Prof.) the drive of liberalization has to pick up the speed for better and faster gains for the economy. With almost 20% devaluation of the Indian rupee in 1991. . even if the awareness of need for opening up country’s borders was started in late 1980s.
8 896.3 85.3 85.4 754.0 -25.1 899.1 98.4 685.3 69.8 -16.5 326.5 200.3 117.5 74.8 67.8 282.6 215.2 125.0 308.9 2.0 512.6 -57.6 73.2 -160.9 -263.5 212.2 99.8 192.5 837.0 56.6 640.1 146.1 -49.9 -8.8 118.6 919.2 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 .0 476.3 118.5 107.5 66.1 139.2 152.0 93.0 69.4 306.5 172.8 340.9 925.8 279.7 -22.2 .8 71.1 253.1 130.8 -48.3 57.5 402.7 441.2 63.5 146.9 427.2 -79.9 -21.1 262.3 18.6 Merchandise Services Imports Imports 125.0 143.4 62.1 97.1 -147.9 82.7 618.0 84.0 329.3 779.8 302.9 140.7 182.7 291.8 191.TABLE 1 India’s Trade: 1965-1985 Merchandise Services Exports Exports 129.9 564.6 107.2 149.3 -51.0 2 92.4 -102.5 262.5 Trade Balance 4.2 150.
1983 1984 1985 742.6 814. that the agencies involved in determining industry-wise allocation fell back on vague notions of “fairness”. While country had no reserves to pay for imported oil.3 -115.5 347.0 342.) One of the reasons for this retarded growth in Indian trade was the disoriented trade policy. Domestic industries were well protected that they loved being monopolists and had no inclination for technological innovation. The country definitely needed a magic for rapid economic growth which could have silenced the political “trouble makers”.9 -131.9 362.3 280. the ruling party (Indira Congress) declared emergency restricting many a freedoms and ruthlessly putting anyone in jail. that was supposed to have taken place according to the famous (?) Infant Industry Argument has never arrived. See Table 1 figures for 1973 when imports increased from $191. came the OPEC oil price shock and the things really went out of control. As Bhagwati-Desai put it. While agricultural sector that was in desperate need to prosper. There was even a problem of assigning priority to industries for importing necessary parts and raw materials.7 million to $291 million and again in 1976 went up to $402 million. But economically there was no way out.1 394.7 310. In early 1980s the monsoon god was nice to India. therefore.9 -56. Rationing of necessities was common and criminal elements made a heyday by hoarding. In 1973.3 721. Political parties were extremely active. implying pro rata allocations with reference to capacity installed or employment. who gave even a hint of “anti-governmental activity”.1 (All figures are expressed in millions of US dollars at the current prices. Strict foreign exchange controls were not only required but were very necessary to stop illegal foreign currency and gold smuggling transactions. The political opposition parties made life miserable for Indira Gandhi government which had a little choice but to blame all starvation on foreign elements. Due to the additional burden exerted by the Indo-Pakistan War of 1971. received a big boost. The protectionism was to the highest level. “ It was not surprising. or shares defined by past import allocations and similar other rules of thumb with out any rationale. the import bill was growing very fast and export earnings were sluggish. This put pressure on the industrial production which was not progressing very well in the first place. The hardship experienced by this virtual “closed economy” was no more evident than in early 1970s when the economy went through numerous shocks. Consider the 350% import tariff rate on automobiles and average tariff rate of 152%.2 814. India also realized that she can do much better in service sector.0 743. The maturity stage. the economy started suffering miserably.6 756. the economy started prospering at a slow rate . All in all. It was an administrative nightmare where rent seeker made merry and black market constituted half of the official economy. Academicians learned several lessons of how protectionism can ruin the economy and policy makers watched economy reaching to a real low point while they searched for the solutions. the industrial sector invented few new technological advances and grew much more rapidly than before. To top the political chaos. The poor monsoons created agricultural production short-fall leading to severe droughts in some parts of the country.
54 12.46 15.0 Inflation Interest Rate Rate 8.01 40.27 36.3 36.43 39.75 15. in Millions 36.92 16.9 17.9 3846. The need for opening up the economy was felt more keenly by Rajiv Gandhi’s government and some reductions in tariff rates were activated in early 1980s.0 .7 10.2 3495.5 5.29 12.25 14.7 6.9 1330.96 13. But the real support for globalization.96 2.08 Unemployment No. liberalization and reduction in protectionism came in late 1980s.4 10.3 1.5 6.83 13.5 2148.8 6.5 6.9 7.but definitely much better than in 1970s.54 12.3 7.9 7.74 37.3 7.34 41.88 13.9 2419.1 4.3 7.9 3.2 1695.1 1120.69 36. Table 2 Macroeconomic Performance in Post 1991 Years Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Real GDP Growth .99 Money Supply Billions of Rs 1046.1 8.3 2703.0 1883.5 3161.1 18.4 4.8 6.14 40.75 36.0 40.
7 5.2 5.92 11.2002 2003 2004 6.73 44.10 45.0 4.81 52.07 21.23 33.98 13.99 59.01 22.71 3.3 5402.3 (International Financial Statistics Yearbook.95 36.48 6.5 11.82 4.81 In billions of US dollars for 3 columns 1991 1992 1993 1994 1995 1996 1997 1998 18.50 4318.36 43.93 24.52 31.08 22.5 8.02 43.31 10.) Table 3 International Trade Performance Post 1991 Years Exports Imports BOT Exchange rate Rs/SDR 36.21 13.67 37. 2003.1 4.6 4822.09 20.20 34.1 29.36 13.01 25.01 4.50 10.95 43.29 51.78 45.60 .60 42.73 35.66 52.10 42.
55 55. While the exports increased drastically.87 43. the opening of the borders and reduction in tariff rates also allowed the imports to go up.13 43. 2003) It shows the drastic turn around of the economy in 1990s in terms of international trade patterns. What is interesting to point out is that the “non-oil” imports and exports showed a positive balance of trade for the Indian economy since year 2000. While the Services sector picked the exports considerably.44 13.91 60.45 65. One of the major developments reported in April 2005 was that software exports from India’s hi-tech hub.69 13. Some politicians (especially leftists and socialists) have also complained about the increased salaries of computer scientists and information technologists.41 61.37 59.71 63. Political skeptics have pointed out the increased inequality of income as an unwanted result of the globalization.54 65. (Times of India. The “great digital divide” has become somewhat of a worry for some researchers.09 45.58 8. Hence oil imports formed the major drain on the foreign reserves and constituted the main reason for balance of trade deficit. However any economic spurt is not with out a political controversy and Indian economic growth is not an exception. 2005).42 77.29 67.97 7. In fact the “free trade for the whole world” scenario is based on the validity of globalization by all policy makers. April 28. important raw material imports have also grown significantly. as Bhagwati (2004) has recently shown the globalization process has more benefits than costs and therefore needs to be supported to the fullest extent.32 50.27 68.88 (Source: IMF’s International Financial Statistics Year book. .03 11. Bangalore rose more than 52 percent to $6 billion. However.1999 2000 2001 2002 2003 2004 36.53 51.82 52. The balance of trade figures were in a manageable amount (almost always less that $14 billion).69 60.77 5.
this trend has created significant economic impact. Despite the lucrative nature of catering to foreign students.Education Destinations: The Globalization of Higher Education More and more students are choosing to pursue their higher education in foreign countries. In some cases. . more and more countries are looking to attract foreign students to their institutions of higher learning. hence. this trend also has worrisome social effects.
[emphasis added]3 It must be noted that this trend is not confined merely to institutions of higher learning. China remained the "most significant" provider of students to the UK. Interest has risen among both Chinese (with a 3% rise in 2008-09 to 16%) and Russian (with a 2% rise in 2008-09 to 13%) students. 229. In today’s world. a tradition dating back to the days of the Empire. although the greatest increase has been among Kazakh students. The late 2009-early 2010 spate of attacks on Indian students in Australia is one such example. £1. as students who come from outside the EU have to pay more for courses than their European peers.88 bn of UK universities' income came from non-EU students in 2007/08. provoking a fierce reaction from the Australian government. A total of 19. compared with 117.One particularly nasty side-effect is the mistreatment of foreign students. historically reputed universities. British boarding schools are also the beneficiaries of this trend in foreign education.[…] In total. Asia and Africa. Profiles in International Education Foreign students represent a particularly lucrative opportunity because one can charge them higher fees than can be legally charged to domestic students. this news analysis profiles current developments in international education and examines local impacts created by the influx of foreign students. and policies designed to encourage foreign attendance. In September 2009 the Patterns of Higher Education Institutions in the UK (published by Universities UK. […] In 2007/08. A 2010 profile of the Suffolk based Alexanders International School reveals that The popularity of British boarding schools among French students is explained by the high standard of English-language tuition available at the facilities and also the close proximity of the countries. the Indian media published a cartoon likening the Australian response to that of the Ku Klux Klan. while government research grants accounted for £1. Every region of the world has at least one major host country where students flock to in order to receive a world-class education.290 in 1998/99. the UK remains a top choice because of the benefits of its English-language instruction. who have increased their numbers from 8% in 2007-08 to 12% in 2008-09. Tensions between Australia and the Indian government reached an all-time high. Europe The United Kingdom has long been considered an attractive destination for foreign students. the representative body for the executive heads of UK universities) found that the number of non-European students enrolling on courses at UK universities has almost doubled in less than ten years.640 students came from outside the European Union.2 A BBC article highlighting these findings noted that: International students can be a lucrative source of income for UK universities.1 Following on this incident and similar trends worldwide.76 bn.385 Chinese students enrolled on first degree courses in the UK and 21.990 took up places for post-graduate study.4 . This section profiles the major players in Europe.
Under . provide incentives for establishing facilities for export production. 2. 4. Exporting Exporting. “tuition fees for international students in the UK went up by about 5%” in the year 2009. 1. if a company does not want to go in for licensing or contract manufacturing. Licensing and Franchising Licensing and Franchising. which involve minimal commitment of resources and effort on the part of the International marketer. expansion of the existing facility may sometimes be easier and less costly than setting up production facilities abroad. Hence. the most traditional mode of entering the foreign market is quite a common one even now. Cost of production in the foreign market is high. problems with materials supplies etc. as in India. The volume of foreign business is not large enough to justify production in the foreign market. Further. Even when there is no excess capacity. The foreign market is characterized by production bottlenecks like infrastructural problems.As a consequence. The article noted that “The rise in fees over the years has not prevented an expansion of the number of international student coming to the UK” and that foreign students “provide an increasingly important revenue stream because universities can charge them whatever they wish. are easy ways of entering the foreign markets. Although these have certain advantages. Exporting is the appropriate strategy when one of more of the following conditions prevails. there are also certain risks. The alternatives to making in foreign countries by the international marketer for marketing the goods in the foreign countries are licensing and contract manufacturing. International trade has been growing much faster than the world output resulting in greater world economic integration. the only avenue open is exporting. 4-Strategy DIFFERENT MARKET ENTRY STRATEGIES 1. 3. many governments. Exporting is more attractive than other modes particularly when underutilized capacity exists. as the BBC reported in January 2010. There are political or other risks of investment in the foreign country. 2.
This is a common practice in international. Management contract could. 1. It may obtain the business of exporting or selling otherwise of the products of the managed company or supplying the inputs required by the managed company. The arrangement is especially attractive if the contracting firm is given an option to purchase. In cross licensing. trademarks. bring in additional benefits for the managing company. 2.) for the finished product. This right can take the form of selling the Franchiser’s products. If idle production capacity is readily available in the foreign country. It frees the company from the risks of investing in foreign countries.. it does not exceed five per cent of the sales in many developing countries. 4. Management Contracting Under the management contract. the cost of the product obtained by contract manufacturing is lower than if it were manufactured by their international firm. or general business approach. marketing skill or some other specific skill). production and marketing techniques. management contracting is a low-risk method of getting into a foreign market and it starts yielding income right from the beginning. technology. 3. business. ‘using its name. Franchising is “a form of licensing in which a parent company (the franchiser) grants another independent entity (the franchisee) the right to do business in a prescribed manner. some shares in the managed company within a stated period. . The company does not have to commit resource for setting up production facilities. like the Coca-Cola supplying the syrup to the bottlers. A licensing agreement may also be one of cross licensing. a firm in one country (the licensor) permits a firm in another country (the licensee) to use its intellectual property (such as patents. In many cases. material etc. In many countries. The monetary benefit to the licensor is the royalty or fees which licensee pays. 4.International licensing. a company doing international marketing contracts with firms in foreign countries to manufacture or assemble the products while retaining the responsibility of marketing the product. it enables the marketer to get started immediately. such fees or royalties are regulated by the government. wherein there is a mutual exchange of knowledge and/or patents.” One of the common forms of franchising involves the franchisor supplying an important ingredient (part. In short. in a management contract the supplier brings together a package of skills that will provide an integrated service to the client without incurring the risk and benefit of ownership Thus. Contract Manufacturing Under contract manufacturing. Contract manufacturing has the following advantages. sometimes. a cash payment mayor may not be involved. as Kotler observes. 3. the firm providing the management know-how may not have any equity stake in the enterprise being managed. and technical know-how. copyrights.
. production bottlenecks due to infrastructural problems etc. differences in the production and other costs. government policies etc. Having assembly facilities in foreign markets is very ideal when there are economies of scale in he manufacture of parts and components and when assembly operations are labour intensive. and labour is cheap in the foreign country. In some cases. the establishment.food franchising when a franchiser agrees to select a store site. equip it. As Drucker points out. cement and fertilizer plants etc. The term is sometimes used in fast . “A turnkey operation is an agreement by the seller to supply a buyer with a facility fully equipped and ready to be operated by the buyer’s personnel. In a sense. erection and commissioning of plants. build the store. It does not have the risk of developing potential competitors as in the case of licensing and contract manufacturing. manufacturers ship the parts and components to the developing countries. Turnkey Contracts Turnkey contracts are common in international business in the supply. train the franchisee and.S. Foreign investment also entails political risks. non-availability of skilled labour. It may be noted that a number of U. construction projects and franchising agreements. Wholly owned manufacturing facility has several disadvantages too. get the product . Assembly Operations As Miracle and Albaum point out. “it is simply not possible to maintain substantial market standing in an important area unless one has a physical presence as a producer. of an assembly operation represents a cross between exporting and overseas manufacturing. as in the case of oil refineries. the cost of production is high in the foreign market. a manufacturer who wants many of the advantages that are associated with overseas manufacturing facilities and yet does not want to go that fat may find it desirable to establish overseas assembly facilities in selected markets. 5. steel mills.Management contract enables a firm to commercialize existing know-how that has been built up with significant investments and frequently the impact of fluctuations in business volumes can be reduced by making use of experienced personnel who otherwise would have to be laid off. There may also be problems such as restrictions regarding the types of technology. a separate production unit for the market may be uneconomical. encourage the establishment of production facilities in the foreign markets Establishment of manufacturing facilities abroad has several advantages. Wholly Owned Manufacturing Facilities Companies with long term and substantial interest in the foreign market normally establish fully owned manufacturing facilities there.” 6. It provides the firm with complete control over production and quality.” A number of factors like trade barriers. 7. If the market size is small.employees and sometimes arrange for the financing. who will be trained by the seller.
The following paragraphs are confined to the first category referred to above. When there are no commercial transactions between two nations because of political reasons or when direct transactions between two nations are difficult due to political reasons or the like. Taiwanese entrepreneurs found it easy to enter People’s Republic of China through bases in Hong Kong. The essential feature of a joint ownership venture is that the ownership and management are shared between a foreign firm and a local firm. In the past. In the widest sense. 4. Rank Xerox found it convenient to enter the erstwhile USSR through its Indian joint venture Modi Xerox. 3. 10. A number of Indian companies have also used this entry strategy. any form of association which implies collaboration for more than a transitory period is a joint venture (pure trading operations are not included in this concept). Third Country Location Third country location is sometimes used as an entry strategy. 1. . For example. For example. Sharing of ownership and management in an enterprise. Such a broad definition encompasses many diverse types of joint overseas operations. Licensing/franchising agreements. 8. viz. Thus.S. Management contracts. Contract manufacturing. for example. joint ownership ventures. Mergers and Acquisitions Mergers and acquisitions (M & A) have been a very important market entry strategy as well as expansion strategy. The U. Three of the above have already been discussed in the preceding sections. i. a local firm acquiring an interest in an existing foreign firm or by both the foreign and local entrepreneurs jointly forming a new enterprise. even products meant to be marketed domestically are assembled abroad. A joint ownership venture may be brought about by a foreign investor buying an interest in a local company. tariff law also encourages this. What is often meant by the term joint venture is joint ownership venture. 9. a firm in one of these nations which wants to enter the other market will have to operate from a third country base. it was true of Israel and Arab Countries. There are several cases of countries not having direct commercial transactions. Third country location may also be helpful to take advantage of toe friendly trade relations between the third country and the foreign market concerned. Joint Ventures Joint venture is a very common strategy of entering the foreign market. Thus. In some cases there are more than two parties involved. government of India did not permit trade with South Africa and Mauritius.assembled there and bring it back home.e. 2.
Marketing. A U. existing or potential in critical areas. simultaneous engineering agreements. 11. licensing or joint development agreements. for its products. the Japanese firm can use the same strategy for the sale of its products in the U. “The goals are to leverage critical capabilities.S. Magsaysay classifies alliances according to purpose as follows. Mergers and acquisitions may also give rise to some problems which arise the cost of acquisition may be unrealistically high. Multiple activity alliance which involves the combining of two or more types of alliances. The success of the enterprise will naturally depend on the success in solving the problems. In return. As one of the most difficult areas in international marketing is the distribution. as international firms take on different allies in each country. this strategy seeks to enhance the long term competitive advantage of the firm by forming alliance with its competitors. this is often a very important consideration for M & A. more than an entry strategy.S. ‘instead of competing with each other. While marketing alliances are often single country alliances. Another important objective of M and A is to obtain access to new technology or a patent right. in the foreign market. M and A also has the advantage of reducing the competition. pharmaceutical firm may use the sales promotion and distribution infrastructure of a Japanese pharmaceutical firm to sell its products in Japan. technology development . Strategic alliance. of another company. sales and service alliances in which a company makes use of the marketing infrastructure etc. Sometimes. is a competitive strategy.” Strategic alliance is also sometimes used as a market entry strategy. Strategic Alliance Strategic alliance has been becoming more and more popular in international business. market.Mergers and acquisitions have certain specific advantages: It provides instant access to markets and distribution network. Further. For example. This may help easy penetration of the foreign market and preemption of potential competitors. a firm may enter a foreign market by forming an alliance with a firm in the foreign market for marketing or distributing the former’s products. air its problems are also acquired with it. There are different types of alliances according to purpose or structure. Technology development alliances like research consortia. when a enterprise is taken over mostly because of the deficiencies of the evaluation of the case for acquisition. Also known by such names as entente and coalition. increase the flow of innovation and increase flexibility in responding to market and technological changes. Based on the description of the generic forms of coalitions by Michael Porter ‘and Mark Fuller..
And the question frequently asked about globalization is not whether it will continue. but at what pace.The future of globalization Like a snowball rolling down a steep mountain. technology development and operations alliances are usually multi-country since these kinds of activities can be employed over several countries. the global economy operated in a very open . Countertrade is a form of international trade in which certain export and import transactions are directly linked with each other and in which import of goods are paid for by export of goods. gained entry to the USSR by employing this strategy. either immediate or deferred. As against this. Nearly a century ago. 12.directly or indirectly . globalization seems to be gathering more and more momentum. “countertrade refers to a variety of unconventional international trade practices which link exchange of goods . Pepsi Co.in an attempt to dispense with currency transactions. In the modern economies. Multiple activity alliance involves the combining of two or more types of alliances. as international firms take on different allies in each country. particularly by the developing countries. A disparate set of factors will dictate the future direction of globalization. Countertrade Although the major reason for the substantial growth of counter trade is its use as a strategy to increase exports.and operations alliances are usually multi-country since these kinds of activities can be employed over several countries.” For Example. countertrade has been successfully used by a number of companies as an entry strategy. While marketing alliances are often single country alliances. ranging from tariffs to immigration restrictions to military hostilities. They still have the power to erect significant obstacles to globalization. most transactions involve monetary payments and receipts. 3. instead of money payments. but one important entity—sovereign governments—should not be overlooked.
and people able to move across borders with little if any difficulty. and recovering what was lost is a process that is still underway. Here are ten action steps for taking on the world: 1. the lessons included avoiding fragmentation and the breakdown of cooperation among nations.environment. services. which led to the emergence of numerous international organizations and financial institutions (among which the IMF and the World Bank. . Indeed. governments recognized the importance of international cooperation and coordination. 4. By helping to break down barriers—ranging from the regulatory to the cultural—more countries can be integrated into the global economy. and more people can seize more of the benefits of globalization. Along the process.Business standard of the topic STEPS FOR GOING GLOBAL As with any sound business plan. The world is still made up of nation states and a global marketplace. the first step is doing your homework. with goods. We need to get the right rules in place so the global system is more resilient. International institutions have a difficult but indispensable role in helping to bring more of globalization's benefits to more people throughout the world. in 1944). That openness began to wither away with the onset of World War I in 1914. more beneficial. and more legitimate. Conduct market research to identify your prime target markets.
5. Search out the data you need to predict how your product will sell in a specific geographic location. the individual is more important than closing the deal under discussion. 4. Build a web site and implement your international plan sensibly. Articulate your business plan for accessing global markets.Advantages of Globalization: Globalization has several advantages on the economic. 6. Make personal contact with your new targets armed with culture specific information and courtesies. . 10. Any myths.2. 14 . 3. Get companywide commitment. Factor in a two year lead time for world market penetration. existing in the mind. regarding these must be dispelled. professionalism and consistency. and social and some other fronts. 8. technological. Update your database rigorously with a view to focusing more closely on those products or services which are in demand and dropping those which are not. Welcome the unknown. 7. cultural. 9. Value the relationship more than the deal.
Advantages of Globalization Goods and people are transported with more easiness and speed the possibility of war between the developed countries decreases free trade between countries increases global mass media connects all the people in the world as the cultural barriers reduce. cultural. the global village dream becomes more realistic there is a propagation of democratic ideals the interdependence of the nation-states increases as the liquidity of capital increases. developed countries can invest in developing ones the flexibility of corporations to operate across borders increases the communication between the individuals and corporations in the world increases environmental protection in developed countries increases Increased free trade between nations Increased liquidity of capital allowing investors in developed nations to invest in developing nations Corporations have greater flexibility to operate across borders Global mass media ties the world together Increased flow of communications allows vital information to be shared between individuals and corporations around the world Greater ease and speed of transportation for goods and people Reduction of cultural barriers increases the global village effect Spread of democratic ideals to developed nations Greater interdependence of nation-states . economic and ecological levels. connectivity and integration on a global level with respect to the social. technological. political.Globalization means increasing the interdependence.
Liberals look at globalization as an efficient tool to eliminate penury and allow the poor people a firm foothold in the global economy. the number of people surviving on $1 or less per day decreased from 1. Reduction of likelihood of war between developed nations Increases in environmental protection in developed nation However. Simultaneously. such doubts are futile as globalization is a positive-sum chance in which the skills and technologies enable to increase the living standards throughout the world.1 billion. . the world population also increased. the percentage of such people decreased from 40% to 20% in such developing countries.5 billion to 1. In two decades from 1981 to 2001. Thus.
15- Disadvantages of Globalization Increased flow of skilled and non-skilled jobs from developed to developing nations as corporations seek out the cheapest labor Increased likelihood of economic disruptions in one nation effecting all nations Corporate influence of nation-states far exceeds that of civil society organizations and average individuals Threat that control of world media by a handful of corporations will limit cultural expression Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritage Greater risk of diseases being transported unintentionally between nations Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperity International bodies like the World Trade Organization infringe on national and individual sovereignty Increase in the chances of civil war within developing countries and open war between developing countries as they vie for resources Decreases in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countries .
teachers. as evidenced by the financial crises of late 2008 .15-Discussion Here from Students. Direct foreign investment also increased but the local investor do not have the power to compete them and expand there business to global. there are number of strategies to handle it and control the negative impact on different departments. As we know that the globalization is the process by which the people of the world are unified into a single society and function together. and the spread of technology. So due to this there is the great impact on the globe. I select Two types of population that is student and teacher. Globalization is often used to refer to economic globalization: the integration of national economies into the international economy through trade. As in case of Pakistan globalization have different negative and some positive affect. The majority of the population says that globalization is not better for developing countries like third world countries. every person suggests different views to handle the globalization. And also the quality of products and services are increased due to growing trend of globalization. the instability of the global financial infrastructure dramatically increased. capital flows. migration. they all have different opinion about the topic. There should be no benefit for foreign investor for long term period and most people reply that the investment opportunities increased due to globalization. foreign direct investment. As these worldwide structures grew more quickly than any transnational regulatory regime.emergence of worldwide financial markets and better access to external financing for borrowers. Financial . Different personnel’s says that technology is transfer from developed countries to developing countries.
By sample population if you said that in case of globalization price and quality of the commodity increases globalization affect highly on trade . Few big companies hold controls on the whole world then there is fair chances of monopoly which will creat problems for the whole world. In my study the teachers and professionals also respond most of the professionals think that the trend of changing from localization to globalization rapidly.some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization. 16-Findings In this chapter I found the views of different people about globalization my first population was students there views were different some have say that government can control globalization by making affective policies. Globalization is very harmful for the domestic industry of a country.Economic . . Most of the students said that globalization affect on substitute of product during globalization if the price of one product decrease the price of other product which is a substitute of that product is also decreased. authors have finding their findings and analysis in a way that the company can get useful information about the cultural values of any country and tradition values of the area. Globalization has a real affect on balance of payments of a country it may expand the imports and decreased the exports. Most of the students have says that perception level of traders about globalization is in sufficient some of them said that globalization can not be controlled by the formation of law. customer trust is also increases when the product quality increases and due to globalization high quality of product is possible. based on the freedom of exchange of goods and capital the interconnectedness of these markets however meant that an economic collapse in any one given country could not be contained. Globalization largely affects the self dependence of a country. In today’s world multinational companies are expanding their business across the borders.realization of a global common market. Political .
And the consumer is enjoying these benefits on low prices. Small companies and businesses will be finished or emerge into big companies in case of globalization. infrastructure.They also suggest that investment opportunities increased due to globalization because of open borders they recommended that it is helpful for developing countries to eliminate their taxes and tariffs in that way the direct foreign investment more rapidly increases and quality of products and services also increases. There is trade deficit faced by the developing countries. Because the larger producers is in market and capture the whole market. Availability of waste market is a big advantage for multinational companies to explore the new markets. low technology and unskilled manpower. insufficient. Many persons have a good structure but they have not enough finance to compete the multinational organizations. This is the major problem. In a globally environment there is tough competition tough competition of local producers to struggle. . Globalization open the new horizons for investment in any other country either the country developed or not. Transfer of technology is a big advantage of globalization for the developing countries so it is essential for these countries adopt and enjoy the benefit. Due to all these reasons developing countries can not adopt the globalization structure. And due to that problem many countries is not in favorable condition to compete with developed countries. 17-Recommendations Globalization is not better for developing countries because the developing counties have less capital.
). small industries and developing and poor countries from the risks and develop new policies to avoid above mentioned factors. Threat of decrease in government revenues in shape of taxes is another problem so it is necessary to avoid and draw new policies. there are several significant contributions of this dissertation. Loan also provided by the companies to finance at international level and there is no more restriction for small and medium entrepreneur’s to obtain loans from the financial institutions. A particular emphasis is paid to this type of alliance since superior marketing is crucial for firms to build a sustainable source of unique competitive advantage. Hence. The second and third papers explore the role of firms’ cooperation in alliances in enhancing their performance amid globalization by specifically focusing on co-marketing alliances and international marketing performance of firms.. Globalization also helpful for the different economies to agree on a specific single currency so the balance is maintained. 19 -CONCLUSION This dissertation is comprised of three papers relating to the effects of globalization on firms. the last paper empirically tests the proposed relationships in two distinct economies (i.S. Protest against globalization is another issue so it is necessary to protect the consumers. First. Such advantage eventually enables firms to achieve long-run success in a hypercompetitive terrain under globalization.e. Second. The first paper advances prior knowledge on globalization and business by empirically investigating how this phenomenon affects firm performance. Thailand and the U. Given that globalization is a complex phenomenon. While the second paper proposes a conceptual framework relating globalization effects to alliance cooperation and firm performance.Globalization is the threat for small and medium entrepreneurs so it is necessary to protect that industry. these major effects are operational zed and empirically tested in two conceptual models to examine the relationships among these . the effects of globalization on firms are classified into two key dimensions—global market opportunities and global market threats— based on an extensive review of scattered literature on the topic. there is a scarcity of empirical research investigating its effects on businesses.
the purpose of this paper is to classify and define such effects into two major categories. this paper explores how firms with international marketing activities can enhance their performance in the global marketplace through increased cooperation in co-marketing alliances. cooperation in alliances. yet no empirical study establishes the link between these two. are inevitably affected. Co marketing alliances and international marketing performance are particularly emphasized here since gaining a competitive edge in today’s globalized business environment requires firms to excel in marketing activities. including competitive threats and market uncertainty. superior marketing will be a more sustainable source of unique competitive advantage than superior technology”. Therefore. this paper proposes that increased global market threats. For this reason. Moreover. and international marketing performance. Thus. Thailand and the U.) to answer two research questions: 1) Does globalization affect firm performance? and 2) Is the relationship between global market opportunities and performance stronger than the relationship between global market threats and performance. . The first paper in this dissertation discusses how globalization affects firms. will encourage more cooperation in alliances while global market opportunities will not. As in Webster’s (1994) words. degree of cooperation in co-marketing alliances. Third. literature on international business. limited empirical studies have been conducted to investigate its effects on firms. It draws from environment-organization literature. The findings of this study indicate that globalization drives more collaboration among firms. and firm performance. The results of this study provide considerable support for the notion that globalization can be both beneficial and detrimental to business.S.. scales to measure these effects were developed and empirically tested in two different economic contexts (i. this study confirms that globalization is a universal phenomenon in which firms. i. allowing them to better cope with higher global competitive threats and market uncertainty. strategic management. “in the global markets of the 1990s and beyond. This paper focuses on relationships between globalization effects and alliances because past research often mentions that globalization drives more collaboration and alliance participation. While transaction costs economics considers alliances as a strategy enabling firms to expand their strategic capabilities. a higher degree of cooperation in co-marketing alliances is then hypothesized to enhance firms’ international marketing performance.e.. global market opportunities and global market threats. Building on market power perspective and transaction cost economics. regardless of where they are located.e. Although academic scholars have alluded to various impacts of globalization.effects. and marketing are integrated to address the effects of globalization on firms’ marketing conduct and outcomes. macro environment such as globalization represents a context in which organizational characteristics and outputs are strongly shaped. The second paper proposes a conceptual framework to investigate relationships among globalization effects. Then. this paper attempts to demonstrate and address how globalization influences firm performance. market power perspective regards alliances as a means to reduce competition and minimize uncertainty evoked by globalization. Hence. Building on this stream of research.
efficiency becomes difficult to realize.com › Indian Economy – . online journals and news paper which are given belowwww. Managers should be prepared to cope with these diverse effects by capitalizing on global market opportunities while carefully managing the inherent threats. From both theoretical and practical perspectives.com › Economy Articles www.. Whereas an increase in cooperation is influenced by higher global market threats (i. these results validate globalization-alliance literature by showing that globalization actually drives more cooperation among firms. It is hoped that this research will inspire more studies on the impact of globalization on business and a search for theories to explain the phenomenon. Given that globalization is multifaceted and only a few key dimensions of its effects were explored here.html www. In sum. many issues remain to be addressed. globalization is a complex phenomenon. 20-Bibliography and References – I ‘ve taken all the information from official sites of govt.org www. The three manuscripts included in this dissertation are among a few empirical studies emphasizing the effects of globalization on firms.org/globalization.e. Alliance participation and cooperation presents a viable option for firms to navigate successfully in this new competitive landscape. Since higher expenses may arise from such cooperative attempts. it is not affected by global market opportunities.globalpolicy.tradechakra.Such cooperation eventually increases international marketing effectiveness of firms engaging in co-marketing alliances. both competitive threats and uncertainty). Of India and Indian companies and few data from books .economywatch.globalization101. Moreover. it is found that increased cooperation in co-marketing alliances helps firms enhance international marketing effectiveness but not efficiency. The absence of any effect of global market opportunities on alliance cooperation can be attributed to the fact that ample opportunities in the markets may result in the lack of collaboration among firms.
International business environment by ‘Robert’ Published by Pearson publication 2. › Education – www.com News paper – The Hindu ../55GLOBALIZATION%20AND%20CHALLENGES%20BEFORE%.com/IRJFE%206%20goyal.Acherakar (‘Nov ’09) Business standard ( 21 oct 09 ) Books – 1.com www....International business by ‘ Stehpen’ Publishes by Tata M’acgraw Publication .com/IRJFE%206%20goyal.indiastudychannel.../globalizationtrade/l/aaglobalization. www.in/..../8/..eurojournals.fibre2fashion.asp www.htm – www.com/.C.busiessstandard.com www..com/.pdf – www.about./impact-of-globalization1.eac.pd economics..gov.thehindhu.onlinejouranl.eurojournals.com › . published by B.
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