GLOBALISATION

Dr. Ratnesh Chandra Sharma

MEANING OF GLOBALISATION
Globalisation means integrating the
economy of a country with the
economies of other countries under
condition of free flow of trade and
capital and movement of persons
across borders.
Video-1.1 & 1
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DEFINATION OF GLOBALISATION
Globalisation may be defined as a process
associated with increasing openness
growing economic independence and
deepening economic integration in the
world economy
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DEFINATION OF GLOBALISATION
IMF defines globalisation as, The growing
economic interdependence of countries
worldwide through increasing volume and
variety of cross-border transaction in goods
and services and of international capital flows
and also through the more rapid and
widespread diffusion of technology.
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DEFINATION OF GLOBALISATION
Charles W.L. Hill defines globalisation as, The
shift towards a more integrated and
interdependent world economy. Globalisation
has two main components- the globalisation
of markets and the globalisation of
production.
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FEATURES OF GLOBALISATION
Business Expand throughout the World.
No Barrier for Bought and Sold.
No Difference.
Free Flow of Technology between nations.
Entire World.
Feasibility and Viability.
Outsourcing.
Free movement of labour can take place.
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SOURCES OF GLOBALISATION
Technological advances.
Trade Liberalization.
Change in Institutions due to Technology.
Global agreement on Ideology.
Cultural Movement.


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PROCESS OF GLOBALISATION(Ohame)
1
st
stage- Domestic company- Dealer
2
nd
stage- Domestic company- Direct
3
rd
stage- Domestic company becomes
International.
4
th
stage- Become Autonomous
5
th
stage- No Barriers.

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ESSENTIAL CONDITIONS
Quotas and tariffs should be removed.
Freedom should be given to the Business
and Industries.
Complete Autonomy should provided to
the Public Sector to Compete with Private
Sector companies.
Administrative and governmental support
is the pre-condition for the success.
Rules & Regulations control of should be
liberalized to encourage Globalization.

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ESSENTIAL CONDITIONS
Compititiveness based on Quality,
Price , Customer Services etc. should
be encouraged.
The Government should provide
adequate support in the form of
Finance, Research & Development etc.
Money and Capital Market should be
developed.
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ESSENTIAL CONDITIONS
Bureaucratic hurdles in the process
of globalisation should be removed.
The suitable globalisation strategies
and a global orientation on the part
of the business firms are essential for
globalisation.


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The drivers of globalisation
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
The drivers of globalisation
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
The drivers of globalisation
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
The drivers of globalisation
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
The drivers of globalisation
Market drivers
Per capita income converging among industrialised
nations
Convergence of lifestyles and tastes
Organisations beginning to behave as global customers
Increasing travel creating global consumers
Growth of global and regional channels
Establishment of world brands
Push to develop global advertising
Cost drivers
Continuing push for economies of scale
Accelerating technological innovation
Advances in transportation
Emergence of newly industrialised countries with
productive capability and low labour costs.
Increasing cost of product development relative to
market life
Government drivers
Reduction of tariff barriers
Reduction of non-tariff barriers
Creation of blocs
Decline in role of governments as producers and
customers
Privatisation in previously state-dominated economies
Shift to open market economies from closed communist
systems in eastern Europe
Increasing participation of China and India in the global
economy
Competitive drivers
Continuing increases in the level of world trade
Increased ownership of corporations by foreign
acquirors
Rise of new competitors intent upon becoming global
competitors
Growth of global networks making countries
interdependent in particular industries
More companies becoming globally centred rather than
nationally centred
Increased formation of global strategic alliances
Other drivers
Revolution in information and communication
Globalisation of financial markets
Improvements in business travel
The drivers of globalisation
Types/Components of Globalisation
Globalisation of Markets
Globalisation of Production
Globalisation of Technology
Globalisation of Investment


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Measures Taken for Globalisation
Reduction of Import Duties
Encouragement of Foreign Investment
Encouragement of Foreign Technology
Agreement
New EXIM Policy
Reducing Custom Duty
Devaluation of Currency
Partial Convertbility
Long-Term Trade Policy

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Average Tariff Rates on Manufactured
Products
1913 1950 1990 2002
France 21 % 18 % 5.9 % 4.0 %
Germany 20 % 26 % 5.9 % 4.0 %
Italy 18 % 25 % 5.9 % 4.0 %
Japan 30 % -- 5.3 % 3.8 %
Holland 5 % 1 % 5.9 % 4.0 %
Sweden 20 % 9 % 4.4 % 4.0 %
UK -- 4% 5.9 % 4.0 %
US 44 % 14 % 4.8 % 4.0 %
ADVANTAGES
Increase in Competitive.
Access to Advanced Technology.
Access to Foreign Investment.
Reduction in Cost of Production.
Growth and Expansion.
Higher Volume of Trade.
Consumer Welfare.
Other Benefits.

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DISADVANTAGE
Threat to Domestic Industry.
Unemployment.
Threat to Democracy.
Economic Instability.
Disregard of National Interest.


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Globalisation
Globalisation
could involve
all these
things!