In the globalized economy, distances and national boundaries have substantially diminished with the removal of obstacles to market access. Besides, there have been reductions in transaction costs and compression of time and distance in international transactions. The changes induced by the dynamics of trade, capital flows, and transfer of technology have made markets and production in different countries increasingly interdependent. The growing intensity of international competition has increased the need for cross-border strategic interactions, necessitating business enterprises to organize themselves into transnational networks. Globalization is characterized by the growing interdependence of various facets. For instance, foreign direct investment (FDI) is accompanied by transfer of technology and know-how, along with the movement of capital (equity, international loans, repatriation of profits, interest, royalties, etc.) generating exports of goods and services from the investor countries. The growth in global economic integration is evident from the increase in the percentage share of world merchandise trade in the world gdp from.3 per cent in 1990.3 per cent in 2005, whereas trade in services grew from.8 per cent.
Diminish the Importance
The breakthroughs power in the means of transport and communication technology in the last few decades have also made international communication, transport, and travel much cheaper, faster, and more frequent. Globalization is the closer integration of the countries and peoples of the world, brought about by the enormous reduction in the costs of transportation and communications and the breaking down of artificial barriers to the flow of goods and services, capital, knowledge, and (to. With the arrival of the Internet, the transaction costs of transferring ideas and information have declined enormously. Global village is the term used to describe the collapse of space and time barriers in human communication, especially by using the world Wide web, enabling people to interact on a global scale. Moreover, a number of interesting terms to signify the various aspects of globalization, such as Westernization, Americanization, walmartization, McDonaldization, disneyfication, coca-colanization, etc., have also emerged, as given in Exhibit.2. Globalization tends to erode national boundaries and integrate national economies, cultures, technologies, and governance, leading to complex relations of mutual interdependence. Globalization refers to the intensification of cross-national economic, political, cultural, social, and technological interactions that leads to the establishment of transnational structures and the integration of economic, political, and social processes on a global scale. Further, globalization is widely understood to imply economic globalization by way of free movement of factor inputs (both labour and capital) as well as output between countries. It is not only the economic integration of countries but also various other aspects such as financial, cultural, and political integration across the world, as depicted in Fig. Therefore, globalization may be defined as the process of integration and convergence of economic, financial, cultural, and political systems across the world. (i) Economic Globalization : The term globalization is widely used in business circles and economics to describe the increasing internationalization of markets for goods and services, the financial system, corporations and industries, technology, and competition.
The breakthroughs in information, communication, and transportation technologies and the growing economic liberalization have accelerated the process of global economic integration. The reviews major concerns about present-day globalization are significantly higher than ever before because of the nature and speed of transformation. What is striking about the current globalization is not only its rapid pace but also the enormous impact of new information and communication technologies on market integration, efficiency, and industrial organization. Concept of Globalization: Globalization has become the buzzword that has changed human lives around the world in a variety of ways. The growing integration of societies and national economies has been among the most fervently discussed topics during recent years. Globalization refers to the free cross-border movement of goods, services, capital, information, and people. It is the process of creating networks of connections among actors at multi- continental distances, mediated through a variety of flows including people, information and ideas, capital, and goods.
In terms of plan percentage of imports and exports to total output, the us could reach the pre-world War level of 11 per cent only around 1970. Most developing countries that gained independence from colonial rule in the immediate post-World War ii period followed imports substitution strategies to promote local industrialization. The east European countries shielded themselves from the process of global economic integration. Multilateral organizations, especially the world Bank, the imf, and the gatt, set up in the post-war era contributed considerably to the economic integration of countries. Setting up of the wto in 1995 provided an effective institutional mechanism for multilateral trade negotiations, integration of trade policies owl under the wto framework, and even the settlement of trade disputes among the member countries. During the recent decades, most developing countries made a strategic shift from their restrictive trade and investment policies to economic liberalization. The transformation of the Indian economy from one following the import substitution strategy with a highly complex system of licenses and multiple procedures to an economy open to globalization is summarized in Exhibit.1.
To begin with, Indian goods were excluded by legislation in Britain. Since the east India company had the monopoly in the Indian export business, the exclusion influenced other foreign markets as well. During the pre-world War I period from 1870 to 1914, there took place a rapid integration of economies in terms of trade flows, movement of capital, and migration of people. The pre-world War I period witnessed the growth of globalization, mainly led by technological forces in the field of transport and communication. However, between the first and second world wars, the pace of globalization decelerated. Various barriers were erected to restrict free movement of goods and services during the inter-war period. Under high protective walls, most economies perceived higher growths. It was resolved by all leading countries after World War ii that the earlier mistakes committed by them to isolate themselves should not be repeated. Although, after 1945, there was a drive to increased integration, it took a long time to reach pre-world War I levels.
The moral Implications of, globalization in the 21st
Foreign adventurers originally came to India because of the excellence of her manufacturers, who had a big market in Europe. The British East India company was started with the objective of carrying manufactured goods, textiles, etc., as well as spices and the like from the east to europe, where there was a great demand degenerative for these articles. Such trading was highly profitable, yielding enormous dividends. So efficient and highly organized were the Indian methods of production, and such were the skills of Indias artisans and craftsmen, that India could compete successfully even with the higher techniques of production that were being established in England. Even when the big machine age began in England, Indian goods continued to pour in and had to be stopped by very heavy duties and, in some cases, by outright prohibitions.
By the middle of the eighteenth century, the main exports into europe were textiles and raw silk from India and tea from China. The purchases of European products into India were financed mainly by the exports of bullion and raw cotton from Bengal, whereas the purchases into China were financed by the exports of opium. Until the eighteenth century, the British generally maintained peaceable relations with the Indian Mughal empire, whose authority and military power were too great to be challenged by the British. It was only after the development of new industrial techniques that a new class of industrial capitalists emerged in Britain and under their influence, the British government began to take greater interest in the affairs of the east India company. The British government now adopted the strategy to close the British market for Indian goods and get the Indian market opened for British manufacturers.
Venice played a key role from ad 10 in opening up trade within Europe and in the mediterranean. It opened trade in Chinese products via caravan routes in the region around the Black sea and in Indian and other Asian products via syria and Alexandria. Trade was important in bringing high value spices and silks to europe and also helped transfer technology from Asia, egypt, and byzantium. Portugal played the key role in opening up European trade, in navigation and settlement in the Atlantic islands, and in developing trade routes around Africa, into the Indian Ocean, and to China and Japan. Portugal became the major shipper of spices to europe for the whole of the sixteenth century, usurping this role from Venice. Right up to the eighteenth century, the Indian methods of production and of industrial and commercial organization could stand in comparison with those in vogue in any other part of the world as written by vera Anstey.
India was a highly developed manufacturing country and exported her manufactured products to europe and other nations. Her banking system was efficient and well organized throughout the country, and the bills of exchange (hundis) issued by the great business or financial houses were honoured everywhere in India, as well as in Iran, kabul, herat, tashkent, and other places in Central Asia. Merchant capital had emerged and there was an elaborate network of agents, jobbers, brokers, and middlemen. The ship-building industry was flourishing and one of the flagships of an English admiral during the napoleon wars was built in India by an Indian firm. India was, in fact, as advanced industrially, commercially, and financially as any country prior to the industrial revolution. No such development could have taken place unless the country had enjoyed long periods of stable and peaceful government and the highways been safe for traffic and trade.
Globalization : Integration of Theories and
In the initial years of human history, people remained confined to their communities, villages, or local thesis regions. There were hardly any formal barriers, such as tariffs or non-tariff restrictions, for the movement of goods or visa requirements for people. The concept of globalization can be traced back to the phenomenon of a nation-state. In the beginning of the Christian era, india was the most populated country with 75 million people constituting.5 per cent of the world population (Fig. 1.1 followed by China (25.8) with.6 million, Italy (3) with 7 million, France (2.2 with 5 million, Spain (1.9) with.5 million, germany (1.3) and writing Japan (1.3) each with 3 million people, whereas the uk (0.34) and the us (0.29) inhabited merely.8 million. Moreover, during this period, India was the worlds largest economy with.9 per cent share of the worlds gdp, followed by China (26.1 the former ussr (1.5 and Japan (1.2). Advertisements: It was only after ad 1500 that some western economies, such as Italy, france, and Germany emerged with.7 per cent,.4 per cent, and.3 per cent share, respectively, in the world gdp whereas the uk and the us merely contributed.1 per. India and China continued to remain the two most dominant economies till the early nineteenth century.
Economic restrictions became pervasive around the world after World War i, leading to de-facto de-globalization. Besides, the import substitution strategies followed by most developing countries, which gained independence from colonial rule in the post-World War ii era, considerably restricted international trade and investment. A number of multilateral organizations set up after World War ii under the aegis of the United Nations, such as the world Bank (wb the International Monetary fund (imf the general Agreement on Tariffs and Trade (gatt and the world Trade Organization (wto facilitated international. Elucidating the conceptual framework of globalization, encompassing financial, cultural, and political aspects, besides the economic. Movers and restraining factors of globalization have also been examined at length. The arguments both for support and criticism of globalization have also been critically evaluated. Globalization offers challenges and opportunities for business enterprises and firms are required to adopt the most effective response strategy. Globalization of Business a historical Perspective: Globalization is not handbook a new phenomenon.
daily consumption. Advertisements: Each day, an average person makes use of goods and services of multiple origins—for instance, the finnish mobile nokia and the us toy-makers Barbie doll made in China but used across the world; a software from the us-based Microsoft, developed by an Indian software. The increased integration of markets—goods and financial—the mobility of people with transnational travels for jobs and vacations, and the global reach of satellite channels, the Internet, and the telephone all have virtually transformed the world into a global village. Globalization, one of the most complex terms used in international business, has wide connotations. Interestingly, globalization is a term not only used and heard frequently, but also as often misused and misinterpreted. Globalization is used to refer to the increasing influence exerted by economic, political, socio-cultural, and financial processes across the globe. Globalization not only offers numerous challenges to business enterprises but also opens up new opportunities. In the earlier era of restrictive trade and investment regimes with much lower degree of interconnectedness among countries, companies solely operating in their home markets were generally protected and isolated from the vagaries of upheavals in the international business environment. Advertisements: Therefore, developing a thorough conceptual understanding of international business has become inevitable not only for the managers who operate in international markets, but also for those who operate only domestically.
Major Arguments in Support and Others Details. Contents: Introduction to Globalization and International Business. Concept of writing Globalization, dimensions of Economic Globalization, factors Influencing Globalization. Factors that are Used for Restraining Globalization. Methods to measure Globalization, globalization reality or Myth, major Arguments in Support of Globalization. Major Grounds where Globalization is Criticised. Response Strategies to Globalization Forces for Emerging Market Companies. Managing Business in the Globalization Era. Introduction to Globalization and International Business: The forces of globalization have hardly been as intense before as to be explicitly evident as influencing our daily lives.
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Advertisements: In this essay we will discuss about Globalization and Business. After reading this essay you will learn about:. Introduction to Globalization and International biography Business. Globalization of Business a historical Perspective. Factors that are Used for Restraining. Methods to measure. Reality or Myth.