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There is much more general acceptance now that globalization is a reality that is effecting
fundamental changes in the world.


Globalization is a process whereby worldwide interconnection in virtually every

sphere of activity is growing. Some of these interconnection lead to integration
worldwide; these project is about how globalization affects organization, and it
concentrates on six sphere of activity where global interconnection are occurring. These
are: global business and industry activities; the natural environment; global culture;
global politics; and global economics; and global technologies.

Worldwide interconnection occurs within single spheres of activity such as

economics to create tighter links within the global economy. These links are reflected in
relation ship between foreign direct investment, capital, and labor but globalization is
more than direct and discrete linkages. Multiple relationship interconnect different
environment when global activities occurring in one sphere interact with activities in
other spheres.
Globalization is characterized by: growing worldwide connection; rapid,
discontinuous change; growing numbers and diversity of participant; and greater
managerial complexity. Each of these is explored below.

Growing worldwide interconnection

Growing worldwide interconnection is one characteristic of globalization. For e.g.
proximity to vibrant market, a transportation infrastructure, and abundant natural
resources draw a people, nation, or region into global trade and other activities.

Rapid, Discontinuous change

A second characteristics of globalization is that this process has occurred rapidly
but not at steady pace. But the regression line would follow an upward slope, but the
regression line would not be a smooth one. Discontinuities in the pace of change make it
difficult for organization and individuals to anticipate, Interpret, or plan for the future.
Another source of discontinuity is events that have global importance
Travel the world at different speeds and with differential effects. Accordingly,
interconnection can affect nation, industries, business and individual at different times
and in different ways.

Increased number and Diversity of participant

A third characteristic of globalization is growth in the number and diversity of
actors involved in global activities. For e.g. participant in global business activities now
include many small-to-medium sized enterprises as well as the large ones.
Growing complexity
Finally the “one world” characterization of globalization exposes most of us to
many more people and ideas whose perspectives on globalization differ. Domestic
question that once seemed simple answer become more complex when we realize that
other worldwide have different “simple” answer to same question. Complexity increases
when there are different answers to same question, and it gives rise to new question about
values and preferences.

Indian’s economic integration with the rest of the world was very limited because
of the restrictive economic policies followed unit 1991. Indian firms confined
themselves, by and large, to the home market. Foreign investment by Indian firms was
very insignificant.
With the new economic policy ushered in 1991, there has, however, been a
change. Globalization has in fact become a buzz-world with Indian firm now and many
are expanding their overseas business by different strategies.
This section takes a look at the hurdles to and prospects for globalization of
Indian business and different globalization strategies.
The Indian business, however, suffer from a number of disadvantage in respect of
globalization of business. Not only that the government lacks a positive orientation in
some respect but also the government policy and procedures in India are among
the most complex, confusing and cumbersome in the world.
Another problem is that the high Cost / inadequacy of many vital inputs and other factors
like raw material and intermediates, power, finance, infrastructure facilities like port etc.
tent to reduce the international competitiveness of the Indian business. There are also
problems related to technology, small size and lack of experience of firm, poor quality,
lack of R&D efforts etc.
Although Indian has several handicaps, there are also a number of favorable
factor for globalization of Indian business. These include the human recourses; growing
entrepreneurships; growing domestic market; the growing of foreign market opening
more and more large number of non resident Indians who are recourse etc.
If the Indian firms have the facilities to obtain higher technology in the world,
they are not equal footing with the foreign firm in many respects. An if the Indian firms
can muster some edge even the foreign firms in respect of labors cost, productivity,
product quality/feature etc. that could be competitive advantages.

There are some essential conditions for satisfied on the part of domestic economy
as well as the firm for successful globalization of the business.
Business Freedom: There should not be unnecessary Government restriction which
come on way of globalization, like import restriction & finance or other factor from
abroad, foreign investment etc. that why the economic liberalization is regarded as a first
step towards facilitating globalization.
Facilities: The extents to which an enterprise can develop globally from home
country base depend on the facilities available like the infrastructure facilities.
Government Support: Unnecessary government interference is a hindrance to
globalization, government may encourage to globalization. It support by policy and
procedure reform, development of common facilities like infrastructural facilities, R&D
support, finance, market.
Resources: Resources is the one of the most important factor which decides the
ability of the firm to globalize resourceful companies may find easier to thrust in the
global market. Resources include finance, R&D facilities, technology, human resources
etc. some small scale companies may get successes in international market due to other
Competitiveness: The competitive advantage of the company is very important
determinants of success in global business. A firm may derive competitive advantages
from any one or more of the factor such as low cost and price, product quality,
technological superiority, marketing strength etc.
Sources of globalization: six interconnecting Spheres

Businesses and other organization operate in an increasingly interconnected world. These

interconnections occur at three levels in figure. At the centre of these figures the
organization whose leaders integrate people, processes and structures to shape outcome in
an global world.
Outcomes also depend on activities that occur outside the firm as shown in the
figure these activities are organized around six major global environment: 1) business and
industry; 2) the natural environment; 3) the economy; 4) political activities; 5) technology
particularly information technology; and 6) culture .

Globalization of the natural environment

Few need to be convinced that sustaining the natural environment is important to

every one’s future. Examinations of these environments include a look at the “global
commons” of air, water, and space. Raw materials of every type also are very important
parts of what can be thought of as the earth’s “natural” environment. Nation’s may have
greater and lesser deposit of raw materials such as wood, rubber, minerals, etc. but as one
world there is finite amount of these resources available demand for natural resources
For e.g. 20% of cost for the commercial airline industry come from fuel. Thus oil price
fluctuations have a significant impact on this industry.

Three other aspect of the natural environment demonstrates the global

significance of the environment. First, it is increasingly evident that species bio-diversity
so important to all life is diminishing. Second, globalization of disease such as aids,
malaria. Finally, human disasters can also have a global impact and demonstrate global
interconnection. Additionally all these elements of the global natural environment
interconnect with business, with the economy, and with the other global environments.

The world today is organized principally around nation-states that operate within
different political infrastructure. At the heart of virtually every political system is the need
to balance between individual and collective interests. The shift from command to market
principles in many nations and the propensity of nation to privatize state-owned enterprises
indicates that many governments believe free market can help them achieve the individual
balance. But this is difficult to do on a worldwide scale because every government has
created different rules, standards, and regulation to address issues like taxes, tariffs, and
business activities.

On a worldwide scale, creating a common and global “good” society involves many
more than governmental actors in the political environment. Intergovernmental
organization, nongovernmental organization, businesses, and members of global gangs,
pirates and terrorist organization also shape global political environment.

Role of government: Governments play many roles, but their primary responsibility
is to manage public policy to balance individual & collective interest of the governed.
Governments play many roles such as providing goods & services that benefit the nation as
a whole, for e.g. healthcare, education, economic, and mobilizing defense mechanism.
Governments finance their activities by collecting taxes; they create laws to outline
responsibilities & maintain social order.

Globalization of culture
A principal challenge of globalization today focuses on the tension between the
cultures of nation-states and an emerging global culture. Because culture is known to shape
meaning and create values as well as lead to common habits, many worry that cultural
globalization will result in a homogenous world culture that drives out individual variation.
Products ranging from cola beverages to denim blue jeans, autos, and television are
consumed throughout the world. English increasingly is a global language business; some
food habits are converging; and businesses activities are increasingly are viewed as modes
of distributing information and other resources around the world.

Most of today’s cultural challenges are mediated by nation whose citizen learn,
share, and appreciate and interrelated set of values, beliefs, and behaviors. Virtually every
aspect of a particular national culture develops to support it. Economic and political system
reflects national beliefs about how to manage resources, and national cultures traditionally
are powerful influence on people and organization. They help define who you are, and they
define what is expected of you.


 India’s 60% is engaged in agriculture.

 Agriculture contributes around 54% in the Indian economy.

 Agriculture is primary occupation.

 When the globalization was not come in India that time agriculture having no
scope, every farmer use to produce the commodity for it self and its family.
Because they did not have sufficient facilities like water supply, land, no
electricity, no modern technology, hybrid seeds, poorly developed transportation
modes; to transfer the commodity from one place to another. The quality of
commodity was good, but quantity was less.

 Since, India adopted the policy of globalization, agriculture and industrialization

was given great importance. Due to globalization India brought in the new
technology hybrid crops, fertilizer from the foreign counties due to which there
was an increased in the pre capita in the agriculture sector.
 The more effect is shown in agriculture sector states are PUNJAB &
HARYANA, because one of the important advantage is that they get many more
river in the area, so they can cultivate more than tow crops in a year and the
government provide other facility like machinery, fertilizers, pesticides and
agriculture loan.

International business expansion emphasizes a product or process life-cycle that
extends the life of a technological change .Technological breakthroughs in medicine, in
television broadcasting, and in most other fields of endeavor combine to make the world
a smaller place where in-person or electronic access to people and other resources around
the world is most as great as to next-door neighbors .This access to information,
opportunity, products, and markets is an argument for a global technological revolution.

The global technological environment often focuses on those process and product
with greatest global impact, but there is a propensity to examine product more than
processes. Microwave cooking and virtual – reality video games are all e.g. of product
development due to technological breakthroughs. Certainly one of the most profound
technological has been the introduction of telecommunications to link the whole world, a
computer that facilitates those links.

In addition to very visible products and services, it is important to recognize that

less evident work processes are also part of technological environment.

Many trace the roots of globalization to many events that shape an increasingly
interconnected global economy. Interconnection between elements of the global economy
such as trade, labor, and currency have an implication for world development as well as
organization operating in a global economy. Government and not-for-profit organization
contribute to GDP.

Indian embarked upon process of reforms in 1990 when its balance of payment
position was very critical. The county has foreign exchange reserves lasting only 2 week.
Several steps were taken to manage this situation, which brought down the ratio of the
current account deficit to GDP, from an unsustainable level of 3.2%to 0.8% in 1994-
1995. The is include strategies to promote export varies liberalization measures in
connection with industries and trade practices, introduction of a new import export traffic
policy in 1991 and emphasis on exports of high value added products. The current
account also showed structural changed in terms of sharp reduction indebt creating flows
and an increased resource to non-debt creating foreign investment flows.


The Indian business suffers from many disadvantages in respect of globalization of

business. The important problems are following:

Government Policy & Procedures:

Government policy procedure in India is among the most complex,
confusing and cumbersome in the world. Even after the much publicized liberalization,
they do not present a very conducive situation. Government policy and the bureaucratic
culture in India in this respect are not that encouraging.
High Cost:
High cost of many vital input and factors like raw material and intermediates,
power, finance, infrastructure facilities like port etc. tent reduce the international
competitiveness of the Indian business.
Poor Infrastructure:
Infrastructure in India is very inadequate and insufficient and they for very costly
this is the serious problem affecting the growth and competitiveness.
Resistance to Change:
There are several socio-political factors which resist change and this comes
in the way of modernization, rationalization and efficiency improvement. Technological
resist due to fear of unemployment. The extend labors employed by Indian industry is
alarming because of labors of production is low and this may come in offsets the
advantages of cheap labors.
Poor quality image:
Due to various reasons, the quality of many Indian products is poor. Even when
the quality is good, the poor quality image, India has become a handicap.
Supply problem:
Due the various reason like low production, infrastructure like power, port
Small Size:
Because of the small size and the low level of resources, in many cases Indian
firms are not able to compete with the giants of other counties. Even the largest Indian
companies are small compared to the multinational giants.
Limited R&D and marketing Research:
Marketing research and R&D in other areas are vital inputs for development of
international business. However, these are poor in Indian business. Expenditure on R&D
in Indian is less than one percentage of the GNC while it is two to three percent in most
of the developed counties. In 1994-95, Indian’s per capital R&D expenditure was less
than $3 when it was between $100 and $825 for most of the developed nation.
Growing competition:
The competition is growing not only from the firm in the developed countries but
also from the developing country firms. Indeed, the growing competition from the
developing country firms is a serious challenge to Indian’s International business.

Trade Barriers: Although the tariff barriers to trade have been progressively reduced
thanks to the GATT/WTO, the non-tariff barriers have been increasing, particularly in the
developed counties.

After adopting the policy of globalization, India has to go through many changes in
many sectors. Such as political, industrial, agricultural, etc.

Leather and Leather products:

This is one of the important sectors from exports point of view for India. The
country achieved significant.
There has been migration of industry form develop country to developing
countries. However, developed countries after investing heavily in china are now looking
to India for developing their production base due to cost economy factor. For India,
competition comes mainly from china, Indonesia, Thailand, Malaysia.

Agriculture Product
India is one of the biggest manufactures of spices. India export spices to almost
more than 28 to countries. Globalization has capacity to rise employment increasing the per
capita income of people.

Gems and Jewellery:

This is a traditional industry in India well known for its craftsmanship and the
art of producing jewellery and cutting, shaping and policing of Gem stone.
India is reported to be one of the world’s largest centers for cut and polished
diamonds, accounting for about 45% of international diamond producing in value in term
and 70% in term of carats.

Textiles and Clothing:

The withdrawal of MFA is supposed to open new opportunities for India,

whose shear in total world export of textile and garment has been 2.4%valued at US