Seminar On

Presented By:

Abdul Abid – Roll No.1

Ajeesh Moosakutty - Roll No.4

GLOBALISATION OF BUSSINESS

GLOBALISATION OF BUSINESS

• Globalization refers to the changes in the world where we are moving away from self-contained countries and toward a more integrated world.

• Globalization of business is the change in a business from a company associated with a single country to one that operates in multiple countries.

GLOBALISATION- DEFINITION(1)The UK Department for International Development (DFID, 2000a) has defined Globalization as:

“The growing interdependence and interconnectedness of the modem world through increased flows of goods, services, capital, people and information. The process is driven by technological advances and reductions in the costs of international transactions, which spread technology and ideas, raise the share of trade in world production and increase the mobility of capital.”

GLOBALISATION- DEFINITION(2)

• Globalization (or globalisation) is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture.

-Wikipedia

Causes of Globalisation:1. Improved Communications

• The development of communication technologies such as internet, email and mobile phones have been vital to the growth of globalisation because they help MNCs to operate throughout the world.

• The development of satellite TV channels such as Sky and CNN have also provided worldwide marketing avenues for the concept and products of globalisation.

Causes of Globalisation2. Improved Transport

• The development of refrigerated and container transport, bulk shipping and improved air transport has allowed the easy mass movement of goods throughout the world. This assists globalisation.

Causes of Globalisation:3. Free Trade Agreements

• MNCs and rich capitalist countries have always promoted global free trade as a way of increasing their own wealth and influence.

• International organisations such as the World Trade Organisation and the IMF also promote free trade.

Causes of Globalisation:4. Global Banking

• Modern communication technologies allow vast amounts of capital to flow freely and instantly throughout the world.

• The equivalent of up to $US1.3 trillion is traded each day through international stock exchanges in cities such as New York, London and Tokyo.

Causes of Globalisation:5. The Growth of MNCs

• The rapid growth of big MNCs such as Microsoft, McDonalds and Nike is a cause as well as a consequence of globalisation.

• The investment of MNCs in farms, mines and factories across the world is a major part of globalisation.

• Globalisation allows MNCs to produce goods and services and to sell products on a massive scale throughout the world.

BENEFITS OF GLOBALISATION

• I. Benefits to the Company .

• 1. Better utilization of resources : There is a good opportunity to utilize excess or unused production capacity, professional as well as technical skill. Thus, a company gets benefits of large scale production, reduction in cost and improvement in efficiency of the workers.

• 2. Spreading of risk of loss : A risk of loss between domestic and global market can be spread by the company. From the profits made by global business, the loss in domestic market can be easily compensated.

• 3. Achievement of objective of Profit : A company can attain its profit objective. It should be remembered that global business/market provides the maximum profit.

• 4. Incentives from the Government : The Government provides incentives to the companies to enter the global market. The Government provides number of incentives such as reduction in taxes, duties, pre-shipment, post-shipment finance, duty withdrawal, concessions in custom duties etc.

• 5. Intangible/Non-economic benefits :

(i) Improvement in the quality of goods : Globalisation helps to improve the quality of goods produce and uphold international standards.

(ii) Improvement in the efficiency and productivity : Globalisation enables a company to improve efficiency and the level of productivity.

(iii) Development activities : Globalisation helps to ensure technological progress, improvement in skill, and large scale Research and Development activities.

(iv) Increase in Competitive ability : Globalisation increases the competitive ability of the company.

(v) Enhancement of Goodwill and Reputation : Globalisation enhances goodwill and reputation of a company in the domestic market.

The Effects of Globalisation:1. Division of Labour• Because MNCs search for the cheapest locations to manufacture and

assemble components, production processes may be moved from developed to developing countries where costs are lower.

The Effects of Globalisation:2. Less Job Security• In the global economy jobs are becoming more temporary and

insecure.

• A survey of American workers showed that people now hold 7 to 10 jobs over their working life.

The Effects of Globalisation:3. Damage to the Environment

• More trade means more transport which uses more fossil fuels and causes pollution.

• Climate change is a serious threat to our future.

The Effects of Globalisation:4. Cultural Impact• Websites such as YouTube connect people across the planet. As the

world becomes more unified, diverse cultures are being ignored. MNCs can create a monoculture as they remove local competition and thereby force local firms to close.

Replacing

The Effects of Globalisation5. Increase in anti-Globalisation Protests

• There is a growing awareness of the negative impacts of globalisation. People have begun to realise that globalisation can be challenged by communities supporting each other in business and society and through public protest and political lobbying.