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GLOBALISATION
Unit II Meaning - Features Stages of Globalisation Methods of Globalisation
INTRODUCTION
The program Globalization and World Economy deals with
ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms
DEFINITION
1.Joseph and John Donahue: Globalism is a state of the world involving networks of interdependence at multicontinental distances. 2. World Bank: Globalization is the growing integration of economies and societies around the world. 3.The term globalization describes the increased mobility of goods, services, labor, technology and capital throughout the world.
international trade
Internationalization of products and services by large firms Growing importance of MNCs Increase in capital transfers across national borders Globalization of technology
interdependence
Shifts in production from
country to country
Drivers of Globalization
In general, globalization represents the increasing integration of the world economy, based on five interrelated drivers of change: International trade (lower trade barriers and more competition) Financial flows (foreign direct investment, technology transfers/licensing, portfolio investment, and debt) Communications (traditional media and the Internet) Technological advances in transportation, electronics, bioengineering and related fields Population mobility, especially of labor
Each of these drivers of change has accelerated in recent years and each reinforces the other
Stages of Globalization
Globalization Process
In the third stage, the domestic company becomes an International company by establishing production and marketing operations in various key foreign countries.
Stages of Globalization
In the fourth stage, the company replicates a foreign company in the foreign country by having all the facilities including R&D and HR etc.,
In the fifth stage the Company becomes a true foreign company by serving the customers just like the host company serves.
Facilities
Government Support Resources Competitiveness Orientation
Licensing & Franchising Contract Manufacturing Mergers & Acquisitions Joint Ventures Third Country Location Turnkey Project Strategic Alliance
Effects Of Globalization
ADVANTAGES Free Flow of Capital Free Flow of Technology Increase in Industrialization Spread up of production facilities throughout the globe Balanced Development of World Economies Increase in Production and Consumption Lower Prices with high quality
Effects Of Globalization
ADVANTAGES
Cultural Exchange and demand for a variety of products. Increase in Employment and Income Higher Standards of Living Balanced Human Development
Increase in welfare and prosperity.
Effects Of Globalization
DISADVANTAGES
Globalization kills domestic business. Exploits Human Resources. Leads to Unemployment and Under employment Decline in demand for domestic products. Widening gap between rich and poor
Effects Of Globalization
DISADVANTAGES
Transfer of Natural Resources Leads to commercial and political colonialism National sovereignty at stake.