M-2Globalization

8/3/2019 M-2Globalization

1/16

GlobalizationGlobalization

--Prof. Uddeepan ChatterjeeProf. Uddeepan Chatterjee


2/16

GlobalizationGlobalization

An economic phenomenon?An economic phenomenon?

A social phenomenon?A social phenomenon?

A cultural phenomenon?A cultural phenomenon?


3/16

GlobalizationGlobalization--DefinedDefined

GLOBALIZATION refers to theGLOBALIZATION refers to theshift toward a more integratedshift toward a more integratedand interdependent worldand interdependent worldeconomy.economy.


4/16

Art of Global DominanceArt of Global Dominance Source raw materials wherever theySource raw materials wherever they

are cheapest.are cheapest.

Manufacture anywhere in the worldManufacture anywhere in the worldwhere it is most cost effective.where it is most cost effective.

Sell in those global markets whereSell in those global markets whereprices are highest.prices are highest.

Raise finances globally.Raise finances globally.

Make International Strategic alliances.Make International Strategic alliances.

To manage all these, take on the bestTo manage all these, take on the besttalent from all over the world.talent from all over the world.


5/16

Scope of Globalization-Globalisation could involve all these things!


6/16

Integration of EconomiesIntegration of Economies

The increasing reliance ofThe increasing reliance ofeconomies on each othereconomies on each other

The opportunities to be able toThe opportunities to be able tobuy and sell in any country in thebuy and sell in any country in the

worldworld The opportunities for labour andThe opportunities for labour and

capital to locate anywhere in thecapital to locate anywhere in theworldworld

The growth of global markets inThe growth of global markets infinancefinance

Stock Markets are now accessiblefrom anywhere in the world!


7/16

Integration of EconomiesIntegration of Economies

Made possible by:Made possible by: TechnologyTechnology

Communication networksCommunication networks

Internet accessInternet access Growth of economicGrowth of economic

cooperationcooperation trading blocstrading blocs(EU, NAFTA, etc.)(EU, NAFTA, etc.)

Collapse of communismCollapse of communism

Movement to free tradeMovement to free trade


8/16

Trade versus Aid?Trade versus Aid?

Benefits of Trade:Benefits of Trade: Increased choiceIncreased choice

Greater potential forGreater potential for

growthgrowth Increase internationalIncrease international

economies of scaleeconomies of scale

Greater employmentGreater employmentopportunitiesopportunities Trade has led to massive increases in wealth

for many countries.


9/16

Trade versus Aid?Trade versus Aid?

DisadvantagesDisadvantagesof trade:of trade: Increase in gap betweenIncrease in gap between

the rich and the poorthe rich and the poor

Dominance of global tradeDominance of global tradeby the rich, northernby the rich, northernhemisphere countrieshemisphere countries

Lack of opportunities forLack of opportunities forthe poor to be able to havethe poor to be able to haveaccess to marketsaccess to markets

Exploitation of workers andExploitation of workers andgrowersgrowers

How far does trade help children like these?


10/16

Corporate ExpansionCorporate Expansion

No matter whereNo matter whereyou go in theyou go in theworld, certainworld, certain

businesses willbusinesses willalways have aalways have apresence.presence.


11/16

Corporate ExpansionCorporate Expansion

Characteristics:Characteristics:

Expanding revenueExpanding revenue

Lowering costsLowering costs

Sourcing raw materialsSourcing raw materials Controlling key suppliesControlling key supplies

Control of processingControl of processing

Global economiesGlobal economiesof scaleof scale

Controlling supplies may be one reasonfor global expansion.


12/16

Corporate DominationCorporate Domination

Key Issues:Key Issues:

Damage to theDamage to theenvironment?environment?

Exploitation of labour?Exploitation of labour?

Monopoly powerMonopoly power

Economic degradationEconomic degradation

NonNon--renewable resourcesrenewable resources

Damage to culturesDamage to cultures

Shell and Nikes activities have come under severe criticism insome quarters.


13/16

Other Issues:Other Issues:

AccountabilityAccountabilityof Global businesses?of Global businesses?

Increased gap betweenIncreased gap between

rich and poor fuelsrich and poor fuelspotential terrorist reactionpotential terrorist reaction

Ethical responsibility ofEthical responsibility ofbusiness?business?

Efforts to remove tradeEfforts to remove tradebarriersbarriers

There are plenty of people who believe that globalisation is anegative development, protests at the G8 summits, pollution,poverty and concern over GM crops are just some of the

issues.


14/16

Multinational CompanyMultinational Company

A Multinational Company is an orgA Multinational Company is an orgdoing business in more than onedoing business in more than onecountry.country.

A MNC engages to various activitiesA MNC engages to various activitieslike exporting,importing,manufacturelike exporting,importing,manufacturein different countries.in different countries.

MNCs take managerial decisionsMNCs take managerial decisionsbased on a global perspective.based on a global perspective.


15/16


16/16

Role of MNCsRole of MNCs

Increasing competitiveness among org in sectorIncreasing competitiveness among org in sector

Superior products and servicesSuperior products and services

Increasing EmployabilityIncreasing Employability

Economic developmentEconomic development

Image of NationsImage of Nations

M-2Globalization

Documents

Transcript of M-2Globalization