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

1- ACKNOWLEDGEMENT

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.

(Anubhav Singh)

Table of content

1. Title page
2. Acknowledgement
3. Scope of the study
4. 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
and the role of the globalization in the progress of the economic growth . As suggested in
past literature, globalization makes alliances an essential part of a firm’s strategy in order to
stay competitive and to achieve superior performance. To better capture global opportunities,
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. Similarly, in order to cope
with increasing global competitive threats, firms are likely to form alliances .Based on the
classical industrial organization perspective—the market power, firms form alliances to
reduce competition and uncertainty. Through such cooperation, companies gain market
power that helps alleviate competition and improve its competitive position.

Past literature also suggests that firms from emerging economies usually possess
characteristics which distinguish them from those of developed economies. Therefore,
empirical investigations on the relationships among globalization effects, degree of co-
marketing alliances, and performance of firms from Thailand and the U.S., which possess
different backgrounds and characteristics, are undertaken by a primary data approach. The
data collection using survey technique is thus used.
 2-

Globalization is a process of interaction and integration among the people, companies, and
governments of different nations, a process driven by international trade and investment and
aided by information technology. This process has effects on the environment, on culture, on
political systems, on economic development and prosperity, and on human physical well-
being in societies around the world.
Globalization is not new, though. For thousands of years, people—and, later, corporations—
have been buying from and selling to each other in lands at great distances, such as through
the famed Silk Road across Central Asia that connected China and Europe during the Middle
Ages. Likewise, for centuries, people and corporations have invested in enterprises in other
countries. In fact, 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.

But policy and technological developments of the past few decades have spurred increases in
cross-border trade, investment, and migration so large that many observers believe the world
has entered a qualitatively new phase in its economic development. Since 1950, for example,
the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of
foreign investment nearly doubled, from $468 billion to $827 billion. Distinguishing this
current wave of globalization from earlier ones, author Thomas Friedman has said that today
globalization is “farther, faster, cheaper, and deeper.”
This current wave of globalization has been driven by policies that have opened economies
domestically and internationally. In the years since the Second World War, and especially
during the past two decades, many governments have adopted free-market economic
systems, vastly increasing their own productive potential and creating myriad new
opportunities for international trade and investment. Governments also have negotiated
dramatic reductions in barriers to commerce and have established international agreements to
promote trade in goods, services, and investment. Taking advantage of new opportunities in
foreign markets, corporations have built foreign factories and established production and
marketing arrangements with foreign partners. A defining feature of globalization, therefore,
is an international industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information
technology, in particular, have dramatically transformed economic life. Information
technologies have given all sorts of individual economic actors—consumers, investors,
businesses—valuable new tools for identifying and pursuing economic opportunities,
including faster and more informed analyses of economic trends around the world, easy
transfers of assets, and collaboration with far-flung partners.
Globalization is deeply controversial, however. Proponents of globalization argue that it
allows poor countries and their citizens to develop economically and raise their standards of
living, 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, local cultures, and common people. 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, labor, goods, and ideas that constitute the
current wave of globalization.

There are countless indicators that illustrate how goods, capital, and people, have become
more globalized.
• The value of trade (goods and services) as a percentage of world GDP increased from
42.1 percent in 1980 to 62.1 percent in 2007.

• Foreign direct investment increased from 6.5 percent of world GDP in 1980 to 31.8
percent in 2006.

• The stock of international claims (primarily bank loans), as a percentage of world

GDP, increased from roughly 10 percent in 1980 to 48 percent in 2006.1

• The number of minutes spent on cross-border telephone calls, on a per-capita basis,

increased from 7.3 in 1991 to 28.8 in 2006.2

• The number of foreign workers has increased from 78 million people (2.4 percent of
the world population) in 1965 to 191 million people (3.0 percent of the world
population) in 2005.
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. Global markets also offer greater opportunity for people to tap into more diversified
and larger markets around the world. It means that they can have access to more capital,
technology, cheaper imports, and larger export markets. But markets do not necessarily
ensure that the benefits of increased efficiency are shared by all. Countries must be prepared
to embrace the policies needed, and, in the case of the poorest countries, may need the
support of the international community as they do so.
The broad reach of globalization easily extends to daily choices of personal, economic, and
political life. For example, greater access to modern technologies, in the world of health care,
could make the difference between life and death. In the world of communications, it would
facilitate commerce and education, and allow access to independent media. Globalization can
also create a framework for cooperation among nations on a range of non-economic issues
that have cross-border implications, such as immigration, the environment, and legal issues.
At the same time, the influx of foreign goods, services, and capital into a country can create
incentives and demands for strengthening the education system, as a country's citizens
recognize the competitive challenge before them.
Perhaps more importantly, globalization implies that information and knowledge get
dispersed and shared. 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
jurisdiction. Just as important, they can avoid the ideas that have a clear track record of
failure. Joseph Stiglitz, a Nobel laureate and frequent critic of 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."

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, both
in developed and emerging economies (i.e., the U.S. and Thailand, respectively).
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, the study indicates the extent to which firms in two different
economic contexts are affected by globalization. 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.
Some Questions arises while studying this topic

1. Up to what extent Globalization is affecting different aspects of our life including

culture, environment and business or marketing.
2. To study the different strategies used by the companies in this environment.
3. To study the threats and opportunities globalization is creating.
4. What steps India ’s may take
5. To study “Is globalization useful for business.”
 1- 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. The setting is the nascent personal computer software
industry in the People's Republic of China (PRC) in 1993. Microsoft has to localize its
software products for use in the PRC. This localization can either be done in-house by
Microsoft, or can be contracted to the local software vendors. Explores the costs and benefits
of full integration and arms-length market transaction. Also discusses the "holdup" problem
that arises when assets specific to a particular partnership are created. Teaching Purpose:
Structuring a newly developing industry, market entry in an emerging economy, and
understanding the pros and cons of integrating into a related set of activities.
2-Tonernow.com: A Dotcom Goes Global
Description of the Case
In Spring 2000, dotcom euphoria grips the U.S. economy, and venture capital is easy to
obtain. 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, partnerships, and other similar relationships. The two entrepreneurs discuss what
it took to launch their web site in late 1999, including development of a large relational
database that offers 3,000 products. The partners examine whether to move from their
position as a small domestic player to a global one. Issues include licensing and web site
localization for non-U.S. access. The toner supplies industry is a highly fragmented segment
within the office supplies industry. Customers are sensitive to price and convenience, and
high-quality service with quick product delivery is the key to success.

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. 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. 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. The
joint venture was of interest to Nestle because its European breakfast cereal business
had been performing poorly. General Mills was interested because it has no
significant breakfast cereal business outside of the United States. However, the
fundamental issue was why Nestle had not made a success of the business in Europe,
and what changes the company would need to make for the business to be a success.
The balance between global strategy and local operations is central to this case.

Main issue of the case

 Decentralization,
 Joint Ventures,
 European Market

3- PROCTER & GAMBLE IN EASTERN EUROPE

Description of the Case

Procter & Gamble must determine an entry strategy for Eastern Europe. The case
examines the former Soviet Bloc countries, the opportunity they provide for a
business endeavor like Procter & Gamble, and the product choices Procter & Gamble
 has available to them. Students must examine the political, economic, societal, 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, the
time profile and the difficulties it may face .

Main issue of the case –

 Globalization,
 Business Policy,
 Uncertainty
 Pop culture

3- PALLISER FURNITURE LTD.

Description of the Case

Palliser is a large, successful family-owned furniture manufacturer in Manitoba,

Canada, that must respond to the increasingly global nature of its business. Its current
business strategy, a product of international trade liberalization, is clearly centered on
exports to the U.S. However, management perceives risks and limitations to growth
with their current product/market position and must decide whether and how to
change. Management is faced with a foreign entry mode decision in Mexico and/or
China. This case is suitable for a course on international management, international
marketing, or strategic management.

Main issue of the case –

 International Business strategies
 Market Entry,
 Investment Analysis,
 Plant Location

3- 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. While DuPont Teflon brand coating held 80 per cent
 of the non-stick market, the non-stick market overall represented 2 per cent of the
domestic cookware market. Moreover, the amount of money spent on developing the
non-stick market exceeded the revenue that DuPont received in the Chinese market.
If DuPont decided to take a different role in the market, it faced many obstacles that
required significant additional investment. It appeared that the domestic market
offered tremendous opportunity, but it would require new efforts, skills, 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, to
introducing a wholly owned brand of non-stick cookware.
Main issue of the case –
 Global Product,
 Brands,
 Management Decisions
 Product Management,

3- MontGras: Export Strategy for a Chilean Winery

Description of the Case

MontGras, a medium-size Chilean winery, has to formulate an export strategy. It has

to decide whether to emphasize the U.S. or U.K. markets, which also offer different
positioning and pricing proposals. It has twice failed to penetrate the U.S. market,
because distributor relationships fell through, and is deciding between two new
potential partners. In the United Kingdom, it is offered participation in a supermarket
promotion that will boost volumes but at the expense of price maintenance. Teaching
Purpose: To develop skills in market assessment and evaluation of export marketing
strategies.
Main issue of the case –
 Tariff barriers
 Duty
 Different aspect of business

3- PATAGON.COM: EXPANDING GLOBALLY AND PENETRATING

LOCALLY WHILE CONSTANTLY REINVENTING ITSELF

Description of the Case

 Founded in 1998, Patagon.com is a pioneer in Latin American Internet-based
financial services. The substantial changes in and growth of its business and
operations had placed significant demands on the company's administrative,
operational, technological and staffing resources. The rapid growth has strained its
ability to adequately integrate the companies it is acquiring. 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 - and at the same
time, develop management systems and enterprise design that would handle the
growing complexity.

Main issue of the case –

 Different Entrepreneurship style in different country
 E-Commerce,
 Strategy Development,
 Organizational Change

9 -Nestle Alimentana S.A. -- Infant Formula (Abridged)

Description of the Case
The new vice president of infant and dietetic products of Nestle Alimentana S.A. has to make
recommendations on the company's marketing programs for its infant formulas in developing
countries. The U.S. subsidiary is currently the target of a consumer boycott because of the
company's current and historical marketing programs. Introduces the question of using
Western marketing techniques in the Third World, the problems of distributor control, and
potential product misuse because of consumer poverty, ignorance and culture factor of that
country .
Main issue of the case –
 Social factor
 Legal factor
 Political factor
 Cultural factor

10 - PEPSI CHALLENGE - RUSSIA 1992

Description of the Case
Russia was in transition from a planned to a market economy. Pepsi had preceded
Coke into the former Soviet Union and was optimistic that it could further increase its
 market presence. However, it required a Russian organization to implement its
strategy. While Pepsi had previously run its Soviet operations from Vienna, they now
needed to hire and develop Russian employees and managers. A 31 year-old human
resources manager in Pepsi International, was tasked with building the Russian
organization. Recently arrived in Moscow, he found an incomplete business
infrastructure, language, cultural and ethical issues to contend with, fluid and
uncertain regulations and few Russians with relevant business experience. His
challenge was to hire a Sales manager and a Technical Engineering manager, as well
as develop staffing compensation and training priorities for the new Pepsi Russian
organization. The case is written to illustrate the localization challenges confronting a
mid-level transition manager.

Main issue of the case –

 Indigenization,
 Employee Selection,
 Subsidiaries,
 International Business strategies

FORCES OF GLOBALIZATION
Why Go Global?
The playing field is wide open for small business. Here’s why both men and
women should consider going global:
• Increase sales.
• Generate economies of scale in production.
• Raise profitability.
• Insulate seasonal domestic sales by finding new foreign markets.
• Create jobs, productivity growth and wealth.
• Encourage the exchange of views, ideas and information.

Small business in particular can take a mentoring role in educating other men and women in
going global. They can establish educational programs, conferences and other activities to
advance their colleagues, and in doing so, promote professional growth and leadership
among all small business owners. The best is truly yet to come.

What Does It Take To Go Global?

Any small business owner must be adaptable, strategic and willing to take calculated risks.
But becoming a successful global small business requires the following commitments:

• Be comfortable with change.

• Welcome new experiences; and learn as much as possible about the culture in which
you are interested in doing business.
• Be willing to take risks, even though it may create short term challenges.
• Push yourself to continuously innovate.

3- Controversy
The negative impact of globalization in European job market
Globalization was not to much accept by the European companies. They depend on the local
labor for good production and better management. The business process outsourcing reduces
the wages cost and the work load is transferred into the outsourcing destination like Asia and
Africa. As a result the European nations like Germany and the UK are facing some
unemployment problem of skilled laborers during the 90s. The cost cutting management
process of private companies in Europe and negative managerial process change the picture
of job market. To face such economical declined some serious steps are taken by the
European nations. 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 impact of globalization changes the global business
opportunities. 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. The fashionable concept of globalization
removes the barrier of country border and the international market of open for the job
seekers.
Business center and even the educational institute expand their services globally for
international customers. 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. The European labors market faced a
negative impact due to globalization in mid 90s. 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. 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.
They made no compromise with their product or services and successfully running there
business for European market as well as the Asian markets also. The extra ordinary
competitions in labor market are helping the employers with the facility of choosing the best
services at low prices. However this makes a new scope for European job seekers to find
their suitable job in management, 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.

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, financial, social, cultural,
political, market, and environmental interdependence among nations. Virtually, everyone is
affected by this process. Given these changes, globalization brings about a borderless world.
Globalization drives people to change their ways of living, prompts firms to change their
ways of conducting business, and, spurs nations to establish new national policies. 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. For example, 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, which affects many airlines, the hospitality industry, and
other businesses around the globe.
On the positive side, globalization enables firms to outsource and find customers around the
world, e.g., the auto and electronics industries. The globalization of production and
operations benefits firms through the realization of economies of scales and scope. Hence, no
one can deny that globalization has changed the way we conduct business.
Although globalization is a worldwide phenomenon, the extent to which each country is
globalized is not identical. To measure the degree of globalization of each nation, a
globalization index was recently developed by a cooperation between Foreign Policy
Magazine, AT Kearney and EDS Company. 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. Thus, it is clear that globalization is an important phenomenon, one that
cannot be simply ignored, because every nation—regardless of size or level of development
—is globalized and affected by globalization. With the prevalence of this worldwide
phenomenon, it is not surprising that businesses are inevitably affected.
Throughout this dissertation, the effects of globalization are classified into two broad
Categories:
1) Global market opportunities and 2) global market threats.
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. Global
market opportunities refer to the increases in market potential, trade and investment potential
and resource accessibility. Global market threats refer to the increases in the number and
level of competition, and the level of uncertainty.

3- 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, such as import tariffs. Greater imports offer consumers a wider
variety of goods at lower prices, while providing strong incentives for domestic industries to
remain competitive. Exports, often a source of economic growth for developing nations,
stimulate job creation as industries sell beyond their borders. More generally, trade enhances
national competitiveness by driving workers to focus on those vocations where they, and
their country, have a competitive advantage. Trade promotes economic resilience and
flexibility, as higher imports help to offset adverse domestic supply shocks. Greater openness
can also stimulate foreign investment, which would be a source of employment for the local
workforce and could bring along new technologies—thus promoting higher productivity.
Restricting international trade—that is, engaging in protectionism—generates adverse
consequences for a country that undertakes such a policy. For example, tariffs raise the
prices of imported goods, harming consumers, many of which may be poor. Protectionism
also tends to reward concentrated, well-organized and politically-connected groups, at the
expense of those whose interests may be more diffuse (such as consumers). It also reduces
the variety of goods available and generates inefficiency by reducing competition and
encouraging resources to flow into protected sectors.
Developing countries can benefit from an expansion in international trade. Ernesto Zedillo,
the former president of Mexico, has observed that, "In every case where a poor nation has
significantly overcome its poverty, this has been achieved while engaging in production for
export markets and opening itself to the influx of foreign goods, investment, and
technology."4And the trend is clear. In the late 1980s, many developing countries began to
dismantle their barriers to international trade, as a result of poor economic performance
under protectionist polices and various economic crises. In the 1990s, 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. Overall,
while the average tariff rate applied by developing countries is higher than that applied by
advanced countries, it has declined significantly over the last several decades.
The implications of globalized financial markets
The world's financial markets have experienced a dramatic increase in globalization in recent
years. Global capital flows fluctuated between 2 and 6 percent of world GDP during the
period 1980-95, but since then they have risen to 14.8 percent of GDP, and in 2006 they
totaled $7.2 trillion, more than tripling since 1995. The most rapid increase has been
experienced by advanced economies, but emerging markets and developing countries have
also become more financially integrated. As countries have strengthened their capital
markets they have attracted more investment capital, which can enable a broader
entrepreneurial class to develop, facilitate a more efficient allocation of capital, encourage
international risk sharing, and foster economic growth.

Cross-Border Assets and Liabilities (Percent GDP)

1
Data series bein in 1995 for central and eastern Europe and the Commonweatlth of
Independent States.
Yet there is an energetic debate underway, among leading academics and policy experts, on
the precise impact of financial globalization. Some see it as a catalyst for economic growth
and stability. Others see it as injecting dangerous—and often costly—volatility into the
economies of growing middle-income countries.
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, the findings support the view that countries must carefully weigh the risks and benefits
of unfettered capital flows. The evidence points to largely unambiguous gains from financial
integration for advanced economies. In emerging and developing countries, certain factors
are likely to influence the effect of financial globalization on economic volatility and growth:
countries with well-developed financial sectors, strong institutions, 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.
For example, well-developed financial markets help moderate boom-bust cycles that can be
triggered by surges and sudden stops in international capital flows, while strong domestic
institutions and sound macroeconomic policies help attract "good" capital, such as portfolio
equity flows and FDI.
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. These costs include lower international
trade, higher investment costs for firms, poorer economic incentives, and additional
administrative/monitoring costs. Opening up to foreign investment may encourage changes
in the domestic economy that eliminate these distortions and help foster growth.
Looking forward, 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, domestic financial system, and prudential
regulation. Moreover, long-term, non-debt-creating flows, such as FDI, should be liberalized
before short-term, debt-creating inflows. Countries should still weigh the possible risks
involved in opening up to capital flows against the efficiency costs associated with controls,
but under certain conditions (such as good institutions, sound domestic and foreign policies,
and developed financial markets) the benefits from financial globalization are likely to
outweigh the risks.
Globalization, income inequality, and poverty
As some countries have embraced globalization, and experienced significant income
increases, other countries that have rejected globalization, or embraced it only tepidly, have
fallen behind. A similar phenomenon is at work within countries—some people have,
inevitably, been bigger beneficiaries of globalization than others.
Over the past two decades, income inequality has risen in most regions and countries. At the
same time, per capita incomes have risen across virtually all regions for even the poorest
segments of population, indicating that the poor are better off in an absolute sense during this
phase of globalization, although incomes for the relatively well off have increased at a faster
pace. Consumption data from groups of developing countries reveal the striking inequality
that exists between the richest and the poorest in populations across different regions.
EFFECT OF GLOBALIZATION ON INDIA’S ECONOMIC GROWTH

INTRODUCTION:

As a new participant in the globalization wave, India went through several structural
and policy changes only in early 1990s, even if the awareness of need for opening up
country’s borders was started in late 1980s, when Mr. Rajiv Gandhi was at the helm of
policy design. With almost 20% devaluation of the Indian rupee in 1991, 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 real question is how did the economy that was an
“almost autarky” from 1950 to 1985 period, reached to such a realization that gains from
trade are there to reap and the economic transition necessary for globalization is a pre-
condition 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.

The present paper is organized as follows: Section 1 makes the survey of trade policy
in period 1950 to 1985, Section 2 summarizes the economic changes in period 1985 to 2005
with special focus on the liberalization attempt in 1991 and its aftereffects. Section 3
summarizes results and makes a conclusion. 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. Jagdish
Bhagwati and T. N. Srinivasan,) the drive of liberalization has to pick up the speed for better
and faster gains for the economy.
 TABLE 1

India’s Trade: 1965-1985

Merchandise Services Merchandise Services Trade

Exports Exports Imports Imports Balance
1965 129.4 62.1 125.3 57.5 4.9
1966 139.3 69.1 146.5 66.2 -8.6

1967 98.9 74.8 152.1 73.2 -57.3

1968 82.5 67.0 130.6 63.0 -51.2

1969 107.1 69.3 107.0 56.8 .9

1970 146.2 85.1 143.5 71.3 2.1

1971 150.8 97.2 200.6 85.0 -49.0

1972 191.7 99.8 215.5 84.0 -25.8

1973 291.0 118.9 326.0 93.2 -16.2

1974 329.4 140.7 476.7 125.3 -160.4

1975 306.5 182.5 441.9 118.3 -102.7

1976 402.0 172.5 427.9 117.2 -22.8

1977 512.6 212.1 564.7 149.8 -48.3

1978 640.3 262.0 618.4 192.1 18.9

1979 779.6 2 92.8 754.1 253.5 -21.2

1980 919.8 279.8 899.9 262.8 -79.1

1981 896.4 302.8 925.5 282.0 -147.9

1982 685.5 340.6 837.6 308.5 -263.2

 1983 742.0 342.5 721.6 280.7 -56.9

1984 743.2 347.1 756.6 310.9 -131.3

1985 814.0 394.3 814.3 362.9 -115.1

(All figures are expressed in millions of US dollars at the current prices.)

One of the reasons for this retarded growth in Indian trade was the disoriented trade policy.
There was even a problem of assigning priority to industries for importing necessary parts and
raw materials. As Bhagwati-Desai put it, “ It was not surprising, therefore, that the agencies
involved in determining industry-wise allocation fell back on vague notions of “fairness”,
implying pro rata allocations with reference to capacity installed or employment, or shares
defined by past import allocations and similar other rules of thumb with out any rationale.
The hardship experienced by this virtual “closed economy” was no more evident than in
early 1970s when the economy went through numerous shocks. The poor monsoons created
agricultural production short-fall leading to severe droughts in some parts of the country. This
put pressure on the industrial production which was not progressing very well in the first place.
Due to the additional burden exerted by the Indo-Pakistan War of 1971, the economy started
suffering miserably. Rationing of necessities was common and criminal elements made a
heyday by hoarding. The political opposition parties made life miserable for Indira Gandhi
government which had a little choice but to blame all starvation on foreign elements. In 1973,
came the OPEC oil price shock and the things really went out of control. While country had no
reserves to pay for imported oil, the import bill was growing very fast and export earnings were
sluggish. See Table 1 figures for 1973 when imports increased from $191.7 million to $291
million and again in 1976 went up to $402 million. Political parties were extremely active.
But economically there was no way out. The protectionism was to the highest level. Consider
the 350% import tariff rate on automobiles and average tariff rate of 152%. Domestic
industries were well protected that they loved being monopolists and had no inclination for
technological innovation. The maturity stage, that was supposed to have taken place according
to the famous (?) Infant Industry Argument has never arrived. Strict foreign exchange controls
were not only required but were very necessary to stop illegal foreign currency and gold
smuggling transactions. 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.
To top the political chaos, the ruling party (Indira Congress) declared emergency
restricting many a freedoms and ruthlessly putting anyone in jail, who gave even a hint of
“anti-governmental activity”. The country definitely needed a magic for rapid economic
growth which could have silenced the political “trouble makers”.
In early 1980s the monsoon god was nice to India. While agricultural sector that was in
desperate need to prosper, received a big boost, the industrial sector invented few new
technological advances and grew much more rapidly than before. India also realized that she
can do much better in service sector. All in all, the economy started prospering at a slow rate
but definitely much better than in 1970s. 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. But the real support for globalization, liberalization and reduction in
protectionism came in late 1980s.

Table 2

Macroeconomic Performance in Post 1991 Years

Year Real GDP Inflation Interest Unemployment Money Supply

Growth Rate Rate No. in Millions Billions of Rs
1991 .96 8.9 17.88 36.3 1046.1

1992 2.3 13.7 18.92 36.75 1120.9

1993 1.5 10.1 16.25 36.27 1330.2

1994 5.9 8.4 14.75 36.69 1695.0

1995 7.3 10.9 15.46 36.74 1883.5

1996 7.3 7.7 15.96 37.43 2148.9

1997 7.8 6.4 13.83 39.14 2419.3

1998 6.5 4.8 13.54 40.01 2703.5

1999 6.5 6.9 12.54 40.0 3161.2

2000 6.1 3.3 12.29 40.34 3495.9

2001 4.0 7.1 12.08 41.99 3846.0

2002 6.2 4.7 11.92 42.36 4318.6

2003 5.5 5.1 11.50 43.10 4822.3

2004 8.0 4.5 10.60 42.50 5402.3

(International Financial Statistics Yearbook, 2003.)

Table 3

International Trade Performance Post 1991 Years

Exports Imports BOT Exchange rate

In billions of US dollars for 3 columns Rs/SDR

1991 18.09 21.08 4.01 36.95

1992 20.01 22.93 4.71 36.02

1993 22.01 24.1 3.48 43.10

1994 25.52 29.67 6.31 45.81

1995 31.23 37.95 10.21 52.29

1996 33.73 43.78 13.98 51.66

1997 35.20 45.73 13.36 52.99

1998 34.07 44.82 13.60 59.81

1999 36.87 45.55 11.44 59.69

2000 43.13 55.32 13.77 60.91

2001 43.82 50.53 5.97 60.54

2002 52.71 51.41 7.58 65.29

2003 63.45 61.42 8.69 67.27

2004 65.09 77.03 13.37 68.88

(Source: IMF’s International Financial Statistics Year book, 2003)

It shows the drastic turn around of the economy in 1990s in terms of international trade
patterns. While the exports increased drastically, the opening of the borders and reduction in
tariff rates also allowed the imports to go up. The balance of trade figures were in a
manageable amount (almost always less that $14 billion).
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. Hence oil imports formed
the major drain on the foreign reserves and constituted the main reason for balance of trade
deficit. While the Services sector picked the exports considerably, important raw material
imports have also grown significantly. One of the major developments reported in April
2005 was that software exports from India’s hi-tech hub, Bangalore rose more than 52
percent to $6 billion. (Times of India, April 28, 2005). However any economic spurt is not
with out a political controversy and Indian economic growth is not an exception. Political
skeptics have pointed out the increased inequality of income as an unwanted result of the
globalization. Some politicians (especially leftists and socialists) have also complained
about the increased salaries of computer scientists and information technologists. The “great
digital divide” has become somewhat of a worry for some researchers. However, as
Bhagwati (2004) has recently shown the globalization process has more benefits than costs
and therefore needs to be supported to the fullest extent. In fact the “free trade for the whole
world” scenario is based on the validity of globalization by all policy makers.
Education Destinations: The Globalization of Higher Education
More and more students are choosing to pursue their higher education in foreign countries. In
some cases, this trend has created significant economic impact; hence, more and more
countries are looking to attract foreign students to their institutions of higher learning.
Despite the lucrative nature of catering to foreign students, this trend also has worrisome
social effects.
One particularly nasty side-effect is the mistreatment of foreign students. The late 2009-early
2010 spate of attacks on Indian students in Australia is one such example. Tensions between
Australia and the Indian government reached an all-time high; the Indian media published a
cartoon likening the Australian response to that of the Ku Klux Klan, provoking a fierce
reaction from the Australian government.1
Following on this incident and similar trends worldwide, this news analysis profiles current
developments in international education and examines local impacts created by the influx of
foreign students.
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. Every region of the world has at
least one major host country where students flock to in order to receive a world-class
education. This section profiles the major players in Europe, Asia and Africa.
Europe
The United Kingdom has long been considered an attractive destination for foreign students,
a tradition dating back to the days of the Empire. In today’s world, the UK remains a top
choice because of the benefits of its English-language instruction, historically reputed
universities, and policies designed to encourage foreign attendance.
In September 2009 the Patterns of Higher Education Institutions in the UK (published by
Universities UK, 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. […] In 2007/08, 229,640 students came from outside the
European Union, compared with 117,290 in 1998/99. China remained the "most significant"
provider of students to the UK. A total of 19,385 Chinese students enrolled on first degree
courses in the UK and 21,990 took up places for post-graduate study.2
A BBC article highlighting these findings noted that:
International students can be a lucrative source of income for UK universities, as students
who come from outside the EU have to pay more for courses than their European peers.[…]
In total, £1.88 bn of UK universities' income came from non-EU students in 2007/08, while
government research grants accounted for £1.76 bn.[emphasis added]3
It must be noted that this trend is not confined merely to institutions of higher learning.
British boarding schools are also the beneficiaries of this trend in foreign education. 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. 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, although the greatest increase has been
among Kazakh students, who have increased their numbers from 8% in 2007-08 to 12% in
2008-09.4
As a consequence, as the BBC reported in January 2010, “tuition fees for international
students in the UK went up by about 5%” in the year 2009. 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.

4-Strategy
DIFFERENT MARKET ENTRY STRATEGIES
1. Exporting

Exporting, the most traditional mode of entering the foreign market is quite a common one
even now. International trade has been growing much faster than the world output resulting
in greater world economic integration.
Exporting is the appropriate strategy when one of more of the following conditions prevails.

1. The volume of foreign business is not large enough to justify production in the foreign
market.
2. Cost of production in the foreign market is high.
3. The foreign market is characterized by production bottlenecks like infrastructural
problems, problems with materials supplies etc.
4. There are political or other risks of investment in the foreign country.
Exporting is more attractive than other modes particularly when underutilized capacity
exists. Even when there is no excess capacity, expansion of the existing facility may
sometimes be easier and less costly than setting up production facilities abroad. Further,
many governments, as in India, provide incentives for establishing facilities for export
production. The alternatives to making in foreign countries by the international marketer for
marketing the goods in the foreign countries are licensing and contract manufacturing.
Although these have certain advantages, there are also certain risks. Hence, if a company
does not want to go in for licensing or contract manufacturing, the only avenue open is
exporting.

2. Licensing and Franchising

Licensing and Franchising, which involve minimal commitment of resources and effort on
the part of the International marketer, are easy ways of entering the foreign markets. Under
International licensing, a firm in one country (the licensor) permits a firm in another country
(the licensee) to use its intellectual property (such as patents, trademarks, copyrights,
technology, and technical know-how, marketing skill or some other specific skill). The
monetary benefit to the licensor is the royalty or fees which licensee pays. In many countries,
such fees or royalties are regulated by the government; it does not exceed five per cent of the
sales in many developing countries.
A licensing agreement may also be one of cross licensing, wherein there is a mutual
exchange of knowledge and/or patents. In cross licensing, a cash payment mayor may not be
involved.
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. This right
can take the form of selling the Franchiser’s products, ‘using its name, production and
marketing techniques, or general business approach.” One of the common forms of
franchising involves the franchisor supplying an important ingredient (part, material etc.,) for
the finished product, like the Coca-Cola supplying the syrup to the bottlers.
3. Contract Manufacturing
Under contract manufacturing, 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. This is a common practice in international, business.
Contract manufacturing has the following advantages.
1. The company does not have to commit resource for setting up production facilities.
2. It frees the company from the risks of investing in foreign countries.
3. If idle production capacity is readily available in the foreign country, it enables the
marketer to get started immediately.
4. In many cases, the cost of the product obtained by contract manufacturing is lower than if
it were manufactured by their international firm.

4. Management Contracting
Under the management contract, the firm providing the management know-how may not
have any equity stake in the enterprise being managed. 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, as Kotler observes,
management contracting is a low-risk method of getting into a foreign market and it starts
yielding income right from the beginning.
The arrangement is especially attractive if the contracting firm is given an option to
purchase, some shares in the managed company within a stated period. Management contract
could, sometimes, bring in additional benefits for the managing company. 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.
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.

5. Turnkey Contracts
Turnkey contracts are common in international business in the supply, erection and
commissioning of plants, as in the case of oil refineries, steel mills, cement and fertilizer
plants etc; construction projects and franchising agreements.
“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, who will be trained by the
seller. The term is sometimes used in fast - food franchising when a franchiser agrees to
select a store site, build the store, equip it, train the franchisee and- employees and
sometimes arrange for the financing.”
6. Wholly Owned Manufacturing Facilities
Companies with long term and substantial interest in the foreign market normally establish
fully owned manufacturing facilities there. As Drucker points out, “it is simply not possible
to maintain substantial market standing in an important area unless one has a physical
presence as a producer.” A number of factors like trade barriers, differences in the
production and other costs, government policies etc., encourage the establishment of
production facilities in the foreign markets Establishment of manufacturing facilities abroad
has several advantages. It provides the firm with complete control over production and
quality. It does not have the risk of developing potential competitors as in the case of
licensing and contract manufacturing.
Wholly owned manufacturing facility has several disadvantages too. In some cases, the cost
of production is high in the foreign market. There may also be problems such as restrictions
regarding the types of technology, non-availability of skilled labour, production bottlenecks
due to infrastructural problems etc. If the market size is small, a separate production unit for
the market may be uneconomical. Foreign investment also entails political risks.

7. Assembly Operations
As Miracle and Albaum point out, 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. In a sense, the
establishment. of an assembly operation represents a cross between exporting and overseas
manufacturing.
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. It may be noted that a number of U.S.
manufacturers ship the parts and components to the developing countries, get the product
assembled there and bring it back home. The U.S. tariff law also encourages this. Thus, even
products meant to be marketed domestically are assembled abroad.

8. Joint Ventures
Joint venture is a very common strategy of entering the foreign market. In the widest sense,
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). Such a broad
definition encompasses many diverse types of joint overseas operations, viz,
1. Sharing of ownership and management in an enterprise.
2. Licensing/franchising agreements.
3. Contract manufacturing.
4. Management contracts.
Three of the above have already been discussed in the preceding sections. The following
paragraphs are confined to the first category referred to above, i.e. joint ownership ventures.
What is often meant by the term joint venture is joint ownership venture.
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 some cases there are more than two parties
involved.
A joint ownership venture may be brought about by a foreign investor buying an interest in a
local company, a local firm acquiring an interest in an existing foreign firm or by both the
foreign and local entrepreneurs jointly forming a new enterprise.

9. Third Country Location

Third country location is sometimes used as an entry strategy. 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, a firm in one of these
nations which wants to enter the other market will have to operate from a third country base.
For example, Taiwanese entrepreneurs found it easy to enter People’s Republic of China
through bases in Hong Kong. Third country location may also be helpful to take advantage
of toe friendly trade relations between the third country and the foreign market concerned.
Thus, for example, Rank Xerox found it convenient to enter the erstwhile USSR through its
Indian joint venture Modi Xerox. There are several cases of countries not having direct
commercial transactions. For example, it was true of Israel and Arab Countries. In the past,
government of India did not permit trade with South Africa and Mauritius.

10. Mergers and Acquisitions

Mergers and acquisitions (M & A) have been a very important market entry strategy as well
as expansion strategy. A number of Indian companies have also used this entry strategy.
Mergers and acquisitions have certain specific advantages: It provides instant access to
markets and distribution network. As one of the most difficult areas in international
marketing is the distribution, this is often a very important consideration for M & A. Another
important objective of M and A is to obtain access to new technology or a patent right. M
and A also has the advantage of reducing the competition. Mergers and acquisitions may also
give rise to some problems which arise the cost of acquisition may be unrealistically high.
Further, when a enterprise is taken over mostly because of the deficiencies of the evaluation
of the case for acquisition. Sometimes, air its problems are also acquired with it. The success
of the enterprise will naturally depend on the success in solving the problems.

11. Strategic Alliance

Strategic alliance has been becoming more and more popular in international business. Also
known by such names as entente and coalition, this strategy seeks to enhance the long term
competitive advantage of the firm by forming alliance with its competitors, existing or
potential in critical areas, ‘instead of competing with each other. “The goals are to leverage
critical capabilities, increase the flow of innovation and increase flexibility in responding to
market and technological changes.”
Strategic alliance is also sometimes used as a market entry strategy. For example, 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. A U.S. pharmaceutical firm may use the sales
promotion and distribution infrastructure of a Japanese pharmaceutical firm to sell its
products in Japan. In return, the Japanese firm can use the same strategy for the sale of its
products in the U.S. market. Strategic alliance, more than an entry strategy, is a competitive
strategy.
There are different types of alliances according to purpose or structure. Based on the
description of the generic forms of coalitions by Michael Porter ‘and Mark Fuller,
Magsaysay classifies alliances according to purpose as follows.

 Technology development alliances like research consortia, simultaneous engineering

agreements, licensing or joint development agreements.

 Marketing, sales and service alliances in which a company makes use of the
marketing infrastructure etc., of another company, in the foreign market, for its
products. This may help easy penetration of the foreign market and preemption of
potential competitors.

 Multiple activity alliance which involves the combining of two or more types of
alliances. While marketing alliances are often single country alliances, as
international firms take on different allies in each country, technology development
 and operations alliances are usually multi-country since these kinds of activities can
be employed over several countries.

 Multiple activity alliance involves the combining of two or more types of alliances.
While marketing alliances are often single country alliances, as international firms
take on different allies in each country, technology development and operations
alliances are usually multi-country since these kinds of activities can be employed
over several countries.

12. Countertrade
Although the major reason for the substantial growth of counter trade is its use as a strategy
to increase exports, particularly by the developing countries, countertrade has been
successfully used by a number of companies as an entry strategy.
For Example, Pepsi Co, gained entry to the USSR by employing this
strategy. 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, instead of money payments. In the modern economies, most transactions
involve monetary payments and receipts, either immediate or deferred. As against this,
“countertrade refers to a variety of unconventional international trade practices which link
exchange of goods - directly or indirectly - in an attempt to dispense with currency
transactions.”

3- The future of globalization

Like a snowball rolling down a steep mountain, globalization seems to be gathering more
and more momentum. And the question frequently asked about globalization is not whether
it will continue, but at what pace.
A disparate set of factors will dictate the future direction of globalization, but one important
entity—sovereign governments—should not be overlooked. They still have the power to
erect significant obstacles to globalization, ranging from tariffs to immigration restrictions to
military hostilities. Nearly a century ago, the global economy operated in a very open
environment, with goods, services, and people able to move across borders with little if any
difficulty. That openness began to wither away with the onset of World War I in 1914, and
recovering what was lost is a process that is still underway. Along the process, governments
recognized the importance of international cooperation and coordination, which led to the
emergence of numerous international organizations and financial institutions (among which
the IMF and the World Bank, in 1944).
Indeed, the lessons included avoiding fragmentation and the breakdown of cooperation
among nations. The world is still made up of nation states and a global marketplace. We
need to get the right rules in place so the global system is more resilient, more beneficial, and
more legitimate. International institutions have a difficult but indispensable role in helping to
bring more of globalization's benefits to more people throughout the world. 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.

4- Business standard of the topic

STEPS FOR GOING GLOBAL

As with any sound business plan, the first step is doing your homework. Here are ten action
steps for taking on the world:
1. Conduct market research to identify your prime target markets.
 2. Search out the data you need to predict how your product will sell in a specific
geographic location.
3. 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.
4. Articulate your business plan for accessing global markets.
5. Get companywide commitment.
6. Build a web site and implement your international plan sensibly.
7. Factor in a two year lead time for world market penetration.
8. Make personal contact with your new targets armed with culture specific information
and courtesies, professionalism and consistency.
9. Value the relationship more than the deal; the individual is more important than
closing the deal under discussion.
10. Welcome the unknown.

14 - Advantages of Globalization:
Globalization has several advantages on the economic, cultural,
technological, and social and some other fronts. Any myths, existing in the mind, regarding
these must be dispelled.
Globalization means increasing the interdependence, connectivity and integration on a
global level with respect to the social, cultural, political, technological, economic and
ecological levels.

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, 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
  Reduction of likelihood of war between developed nations
 Increases in environmental protection in developed nation

However, 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.
Liberals look at globalization as an efficient tool to eliminate penury and allow the poor
people a firm foothold in the global economy. In two decades from 1981 to 2001, the
number of people surviving on $1 or less per day decreased from 1.5 billion to 1.1 billion.
Simultaneously, the world population also increased. Thus, the percentage of such people
decreased from 40% to 20% in such developing countries.
 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
 15-Discussion

Here from Students, teachers, they all have different opinion about the topic. The majority
of the population says that globalization is not better for developing countries like third world
countries.

I select Two types of population that is student and teacher, every person
suggests different views to handle the globalization, there are number of strategies to
handle it and control the negative impact on different departments.

As in case of Pakistan globalization have different negative and some positive

affect. There should be no benefit for foreign investor for long term period and most people
reply that the investment opportunities increased due to globalization.

And also the quality of products and services are increased due to growing trend of
globalization.

Direct foreign investment also increased but the local investor do not have the power to
compete them and expand there business to global. Different personnel’s says that
technology is transfer from developed countries to developing countries.

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. Globalization is often used to refer to economic
globalization: the integration of national economies into the international economy through
trade, foreign direct investment, capital flows, migration, and the spread of technology.

So due to this there is the great impact on the globe. Financial - emergence of
worldwide financial markets and better access to external financing for borrowers. As these
worldwide structures grew more quickly than any transnational regulatory regime, the
instability of the global financial infrastructure dramatically increased, as evidenced by the
financial crises of late 2008
Economic - realization of a global common market, 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.

Political - 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. Few big companies
hold controls on the whole world then there is fair chances of monopoly which will creat
problems for the whole world.
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.
Globalization has a real affect on balance of payments of a country it may expand the
imports and decreased the exports. Globalization largely affects the self dependence of a
country.
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,
By sample population if you said that in case of globalization price and quality
of the commodity increases globalization affect highly on trade , customer trust is also
increases when the product quality increases and due to globalization high quality of product
is possible.
In today’s world multinational companies are expanding their business
across the borders, 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.
In my study the teachers and professionals also respond most of
the professionals think that the trend of changing from localization to globalization rapidly.
 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. 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.

17-Recommendations

Globalization is not better for developing countries because the developing counties have
less capital, insufficient, infrastructure, low technology and unskilled manpower. Due to all
these reasons developing countries can not adopt the globalization structure.

In a globally environment there is tough competition tough competition of local producers to

struggle. Because the larger producers is in market and capture the whole market. Many
persons have a good structure but they have not enough finance to compete the multinational
organizations.

There is trade deficit faced by the developing countries. This is the major problem. And due
to that problem many countries is not in favorable condition to compete with developed
countries.

Globalization open the new horizons for investment in any other country either the country
developed or not. Availability of waste market is a big advantage for multinational
companies to explore the new markets.

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.
Globalization is the threat for small and medium entrepreneurs so it is necessary to protect
that industry.

Threat of decrease in government revenues in shape of taxes is another problem so it is

necessary to avoid and draw new policies.

Protest against globalization is another issue so it is necessary to protect the consumers,

small industries and developing and poor countries from the risks and develop new policies
to avoid above mentioned factors.

Globalization also helpful for the different economies to agree on a specific single currency
so the balance is maintained. 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.

19 -CONCLUSION
This dissertation is comprised of three papers relating to the effects of globalization on firms.
The first paper advances prior knowledge on globalization and business by empirically
investigating how this phenomenon affects firm performance. 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. 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.
Such advantage eventually enables firms to achieve long-run success in a hypercompetitive
terrain under globalization. While the second paper proposes a conceptual framework
relating globalization effects to alliance cooperation and firm performance, the last paper
empirically tests the proposed relationships in two distinct economies (i.e., Thailand and the
U.S.).
Given that globalization is a complex phenomenon, there is a scarcity of empirical research
investigating its effects on businesses. Hence, there are several significant contributions of
this dissertation. First, 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. Second, these major effects are operational zed
and empirically tested in two conceptual models to examine the relationships among these
effects, cooperation in alliances, and firm performance. Third, literature on international
business, strategic management, and marketing are integrated to address the effects of
globalization on firms’ marketing conduct and outcomes. The first paper in this dissertation
discusses how globalization affects firms. It draws from environment-organization literature.
Building on this stream of research, macro environment such as globalization represents a
context in which organizational characteristics and outputs are strongly shaped. For this
reason, this paper attempts to demonstrate and address how globalization influences firm
performance. Although academic scholars have alluded to various impacts of globalization,
limited empirical studies have been conducted to investigate its effects on firms. Therefore,
the purpose of this paper is to classify and define such effects into two major categories, i.e.,
global market opportunities and global market threats. Then, scales to measure these effects
were developed and empirically tested in two different economic contexts (i.e., Thailand and
the U.S.) 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 results of this study
provide considerable support for the notion that globalization can be both beneficial and
detrimental to business. Moreover, this study confirms that globalization is a universal
phenomenon in which firms, regardless of where they are located, are inevitably affected.
The second paper proposes a conceptual framework to investigate relationships among
globalization effects, degree of cooperation in co-marketing alliances, and international
marketing performance. This paper focuses on relationships between globalization effects
and alliances because past research often mentions that globalization drives more
collaboration and alliance participation, yet no empirical study establishes the link between
these two. 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. As in Webster’s (1994) words,
“in the global markets of the 1990s and beyond, superior marketing will be a more
sustainable source of unique competitive advantage than superior technology”. Thus, this
paper explores how firms with international marketing activities can enhance their
performance in the global marketplace through increased cooperation in co-marketing
alliances. Building on market power perspective and transaction cost economics; this paper
proposes that increased global market threats, including competitive threats and market
uncertainty, will encourage more cooperation in alliances while global market opportunities
will not. While transaction costs economics considers alliances as a strategy enabling firms
to expand their strategic capabilities, market power perspective regards alliances as a means
to reduce competition and minimize uncertainty evoked by globalization. Hence, a higher
degree of cooperation in co-marketing alliances is then hypothesized to enhance firms’
international marketing performance.
The findings of this study indicate that globalization drives more collaboration among firms,
allowing them to better cope with higher global competitive threats and market uncertainty.
Such cooperation eventually increases international marketing effectiveness of firms
engaging in co-marketing alliances.
Whereas an increase in cooperation is influenced by higher global market threats (i.e., both
competitive threats and uncertainty), it is not affected by global market opportunities. 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. Moreover, it is found that increased cooperation in co-marketing alliances
helps firms enhance international marketing effectiveness but not efficiency. Since higher
expenses may arise from such cooperative attempts, efficiency becomes difficult to realize.
In sum, these results validate globalization-alliance literature by showing that globalization
actually drives more cooperation among firms.
Managers should be prepared to cope with these diverse effects by capitalizing on global
market opportunities while carefully managing the inherent threats. Alliance participation
and cooperation presents a viable option for firms to navigate successfully in this new
competitive landscape. From both theoretical and practical perspectives, globalization is a
complex phenomenon. The three manuscripts included in this dissertation are among a few
empirical studies emphasizing the effects of globalization on firms. Given that globalization
is multifaceted and only a few key dimensions of its effects were explored here, many issues
remain to be addressed. 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.

20-Bibliography and References –

I ‘ve taken all the information from official sites of govt. Of India and Indian
companies and few data from books , online journals and news paper which are given
below-

www.globalization101.org

www.globalpolicy.org/globalization.html

www.economywatch.com › Economy Articles

www.tradechakra.com › Indian Economy –

eac.gov.in/.../55GLOBALIZATION%20AND%20CHALLENGES%20BEFORE%...

www.eurojournals.com/IRJFE%206%20goyal.pd

economics.about.com/.../globalizationtrade/l/aaglobalization.htm –

www.fibre2fashion.com/.../8/.../impact-of-globalization1.asp -

www.indiastudychannel.com › ... › Education –

www.eurojournals.com/IRJFE%206%20goyal.pdf –

www.busiessstandard.com

www.thehindhu.com

www.onlinejouranl.com

News paper –

The Hindu , published by B.C.Acherakar (‘Nov ’09)

Business standard ( 21 oct 09 )

Books –

1- International business environment by ‘Robert’

Published by Pearson publication

2- International business by ‘ Stehpen’

Publishes by Tata M’acgraw Publication