Globalization & Business Environment

Chapter 5

What is Globalization?
Globalization is the process of increased integration among countries most notably in the areas of economics, politics, and culture. Interdependence Internationalization of brands Outsourcing of production Westernization

Example of Globalization
It is possible that shirt which is being sold in USA could have been made with Chinese cotton sewed by Thai hands, shipped across the Pacific on a French freighter crewed by Spaniards to a Los Angeles harbor. This international exchange is just one example of globalization

Driving Forces of Globalization

Information Technology Revolution Speed & Cost of communication Improvement in Transportation Ex. Containerized shipping Easy access to capital Lower wages & raw material cost

Impacts of Globalization
Economic
Decline in Trade barriers Increased international trade Growth of MNCs Outsourcing FDI

Social Cultural

Advantages of Globalization
There is a worldwide market for the companies and for the customers there is a better access to products from different countries. There is a steady cash flow into the developing countries, which gradually decreases the dollar difference. Due to the presence of a worldwide market, there is an increase in the production sector and there are lots of options for investments for different companies. The influx of information between two countries increases, especially those nations who do not have anything in common between them. Cultural intermingling increases and every nation tries to know more about the other nations cultural preferences.

 In this process, we are actually coming across things that we like and in the course of time adopt it. Since we share financial interests, corporate and governments are trying to sort out ecological problems for each other. Socially we have become more open and tolerant towards each other and these who live in the other parts of the world appear more approachable than before. There is a lot of technological development that countries have undergone over the years. Thus, helping in sharing of information and technology. This helps most of the developing nations progress at the same speed as the developed nations. Globalization helps in increase of demand of products. This in turn increases rate of production. Manufacturers thus, find this profitable and helps in availability of more jobs.

Disadvantages of Globalization
Many people from developed nations are losing jobs and that is posing a problem for them since the companies are outsourcing work to developing countries since the cost of labor is low and profits the company considerably. There is immense pressure on the employed people of developed countries who are always under the threat of their jobs being outsourced. Corporates are building up units in other countries that equally well equipped, thus transferring the quality to other countries, thereby increasing the chances of depreciation in terms of quality. There are some experts who think that globalization along with the positive aspects is also leading to the incursion of negatives like communicable diseases and social degeneration.

 There is also a threat of corporates ruling the world because there is a lot of power and money invested by them due to globalization. Globalization may lead to loss of cultural identity as Western ideas are always imposed upon the Eastern thoughts. It is often argued that poor countries are exploited by the richer countries where the work force is taken advantage of and low wages are implemented.

 Questions for a Globalized Economy

Does globalization enrich the many or the few? Does it help or harm workers? the environment? Is it a source of freedom or a barrier to freedom? What role for the governments? Is globalization inevitable?

Overall, is globalization a positive or a negative development????

Project Work
Title Indian Telecom Industry Post Globalization Contents
Introduction Pre-globalization scenario of telecom industry in India Impact of Globalization -Economic -Social & Cultural Future Challenges & Opportunities Conclusion