INTRODUCTION

Globalization refers to economic globalization the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and spread of technology It describes a process by which regional economies, societies and culture have become integrated through a global network of communication, transport and trade

Conditions for Globalization

1. 2. 3. 4. 5. 6. Removal of quotas and tariffs Liberalization of government rules and regulations Freedom of Business and Industry Removal of bureaucratic formalities and procedures Adequate infrastructure Competition on the basis of quality ,price ,delivery and customer service. 7. Autonomy to public sector undertaking 8. Incentive for research and development 9. Administrative and government support to industry 10. Development of money market and capital market.

GLOBAL BUSINESS ORGANIZATIONS - TYPES

JOINT VENTURE (JV)

PARTNERSHIP

FRANCHISE

FOREIGN LICENSE DIRECT INVESTMENT (FDI)

STRATIGIES FOR GLOBALISATION

exporting

Third country location

Stragies for entry into the foreign market

Licensing & Franchisin g

Direct investmen t

Contract manufact uring

INDIA BEFORE GLOBALIZATION

Indian economy was in deep crisis in July 1991, when foreign currency reserves had dipped to almost $1 billion Inflation had roared to an annual rate of 17 percent Foreign investors and NRIs had lost confidence in Indian Economy Capital was flying out of the country and we were close to defaulting on loans

These were the economic compulsions at home and abroad that called for a complete overhauling of our economic policies & programs Contd,.
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 Thus under pressure country took risk of reforming socialist economy It was at the time of Late P.V.Narshimha Rao, and he led one of the most important administration in the Indian model history overseeing a major economic transformation
At that time Dr. Manmohan singh was our finance minister and he launched India free market reform that bought nearly bankrupt nation back from the edge

MAJOR IMPACT ON INDIAN ECONOMY Indias position in the global economy has improved from the 8th position in 1991 to 4th place in 2001, due to pick in GDP growth A growth rate of above 8% was an achievement by the Indian economy during the year 2003-04 Only Service sectors like software & ITES-BPO contributed more than 57% to overall GDP

WHERE DOES INDIA STAND IN TERMS OF GLOBALIZATION?

India clearly lags in globalisation Number of countries are clearly ahead of India, among those countries are China, large part of east and far east Asia and eastern Europe India ranks 94 in trading across the border which is way behind china Lets look at a few indicators how much we lag

Globalization of Indian Business

1. Liberalization of norms for FDI and for entry of Multinational Corporation 2. Liberalization of Foreign trade through reduction in import tariff, removal of quantitative restriction on Import ,simplification of trade procedures & documentation ,and wide ranging incentive for exports 3. Allowing foreign institutional investors to participate in Countrys capital market. 4. Full convertibility of the rupee on current account. 5. Streamlining ,widening and depending of foreign exchange management.

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6.Liberalizing the domestic economy by removing restriction on production ,investment and prices. 7.Permitting Indian companies to establish Joint Ventures Abroad & to enter in joint ventures with foreign companies in India. 8.Allowing Indian mutual funds to invest in foreign companies. 9.Strengthning of foreign trade infrastructure. 10.Incentive to attract NRI funds and investment.

Obstacles to Globalization
Bureaucracy High cost Poor quality Poor Infrastructure Obsolete Technology Poor infrastructure Resistance to change Lack of professional management Limited R & D Trade barriers.

Factors favoring globalization

Wider base Talent pool Huge market Growing Entrepreneurship NRI S Economic liberalization Global competition

INDIAS SHARE IN GLOBAL TRADE

India's share of world merchandise exports increased from 0.5% to 0.7% over the past 20 years Over the same period China's share has tripled to almost 4% India under trades by 70-80% given its size, proximity to markets and labour cost advantages

ADVANTAGES
Wider market Rapid Industrialization Greater specialization Competitive gain Higher production Price stabilization Increase in employability Higher standard of living International economic cooperation World peace

DISADVANTAGES
Interdependence Threat to domestic Market Unemployment Drain of basic resources Technological dependence Alien Culture

SOME SUCCESSFUL GLOBAL BUSINESS: EXAMPLES

The Ford Motor Company is an American multinational corporation based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903

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