MBA TOPIC

2. IMFdefines Globalisation as:
“ The growing economic interdependence of
countries worldwide through increasing volume and
variety of cross border transactions in goods and
services and of international capital flows, and also
through the more rapid and widespread diffusion of
technology”
In other words globalisation is a process of economic, political
and cultural integration and unification.

3. HISTORY
The historical origins of globalisation are the
subject of on-going debate. Though several
scholars believes that the origins
of globalisation in the started in modern
era, others regard it as a phenomenon with
a long history.

4. Stages of Globalisation
Stages
First Stage
1490
Second Stage
1890
Third Stage
1990
Impulse
Nautical
developments
Industrialization
in Europian
countries
Multi-National
Companies in 1970s,
Communication Reform
in 1980s.
Result Colonialism Imperialism Globalisation

5. What are the components of the globalisation process?
Advances in :-
o Transportation
o Telecommunications
o Infrastructure
o Rise of the telegraph
o Internet
o Interdependence of economic and cultural
activities.
o Business and work organization
o World Economy
o Socio-cultural resources, and the natural
environment ,etc

6. Designs its
products in
United States
Components manufactured in China Assembled in Mexico
A Multinational Company is a company that owns or controls
productions in more than one nation. MNCs set up offices and
factories for productions in regions where they can get cheap
labour and other resources. This is done so that the cost of
productions is low and the MNCs can earn greater profits.
Sold in USA and Europe
Call centers located
in India

7. What are the common features that we can
grab from above example ?
 They are originated from different
countries
 Their goods are sold not only in their
country but are sold globally
 Most of them are estabilished in the 20th
centuary
 They have both producers and consumers
globally

8. Overview in INDIA
 Indian economy had experienced major policy
changes in early 1990s.
 The new economic reform, popularly known as,
Liberalization, Privatization and Globalisation
(LPG model) aimed at making the Indian economy
as fastest growing economy and globally
competitive.
 The series of reforms undertaken with respect
to industrial sector, trade as well as financial
sector aimed at making the economy more
efficient

9. The Indian sectors which grew tremendously as a result of
globalisation of the Indian manufacturing sector are as:
 Capital goods
 Engineering goods
 Chemicals
 Petroleum
 Chemicals & fertilizers
 Packaging
 Consumer non-durables
 Electronics
 IT Hardware &
peripherals
 Gems & jewelry
 Leather & leather
products
 Mining
 Steel & non-ferrous
metals
 Textiles & apparels
 Water equipment

10. • Globalisation has also created new
opportunities for companies providing
services, particularly those involving IT.
• MNCs have increased their investments
in India over the past 15 years, which
means investing in India has been
beneficial for them. New jobs have been
created. Local companies supplying raw
materials, etc. to these industries have
prospered

11. Effects of Globalisation
 Social relations are stretching across the globe.
 Capitalist markets are spreading everywhere
 Competition became world-wide and became neck-tight
in all aspects
 Increasing travel and migration (international tourism
and domestic diversity)
 Increasing communication and interaction between
people (through all sorts of media)
 Greater employment opportunities
 Liberalisation of world trade , etc

12. • Effects of globalisation on Indian
Industry started when the government
opened the country's markets to foreign
investments in the early 1990s.
Globalisation of the Indian Industry took
place in its various sectors such as steel,
pharmaceutical, petroleum, chemical,
textile, cement, retail, and BPO.

13. DIMENTIONS OF GLOBALISATION
Economic Globalisation is the increasing economic
interdependence of national economies across the world
through a rapid increase in cross-bordermovement of
goods, service, technology, and capital
It has begun to occur at an increased rate over the last
20–30 years under the framework of General
Agreement on Tariffs and Trade and World Trade
Organization which made countries to gradually cut
down trade barriers and open up their current accounts
and capital accounts.

14.  Employees of a transnational corporation may
be well paid compared to other workers in
the country
 Increased investment in developing countries
stimulates their economies
 Free trade between nations is established –
countries can produce to its strengths and
import the goods it needs without the threat
of tariffs
 A wide range of products are available at
affordable prices due to free trade
 Sharing of technological innovations is fast
and fair

15.  Jobs are being outsourced from developed
countries to less developed countries
resulting in higher unemployment
 Transnational corporations are becoming so
large they are beyond the power of smaller
governments
 Economies are linked due to trade – economic
hardship in one country will more greatly
affect other nations
 Cultural identity is lost due to mass use of
western consumer products and entertainment

16. Political globalisation
This term means the process of spreading social
relations from one end of the world to the other end.
This help new ideas in one place become a idea in the
other and it helps people communicate with each
other from different countries.
This is a big part of society and could help bring
everyone closer.

17.  Gradually there is a world power that is being created instead
of compartmentalized power sectors. Politics is merging and
decisions that are being taken, are actually beneficial for
people allover the world
 Since we share financial interests, corporate and governments
are trying to sort out ecological problems for each other
 International agreements are working towards trying to
protect the environment from pollutants that cause global
warming, destroying ecosystems, and increasing acidity levels
in seas and oceans
 Communications allow for the message of political freedom
tyranny in the for of democracy to spread globally

18.  For nations that are at the receiver’s end are also
giving up the reins in the ends of a foreign company
which might again lead to a sophisticated form of
colonization

19. Cultural Globalisation
Cultural globalisation refers to the transmission of ideas,
meanings and values across world space.
Some critics argue that the dominance of American culture
influencing the entire world will ultimately result in the end of
cultural diversity.
A visible aspect of cultural globalisation is the diffusion of
certain cuisines such as American fast food chains. McDonald’s
is the world’s largest global food service corporation with more
than 35,000 chains serving approximately 75 million people in
130 countries each day

20. Cultural Changes
• Cultural Changes Access to television grew from 10% of
the urban population (1991) to 85% of the urban
population (2012).
• Cable television and foreign movies became widely
available for the first time and have acted as a catalyst in
bulldozing the cultural boundaries.
• Indian youths leaving education in mid-way and joining
MNC's.

21.  Globalisations of communications sees great quantities of
information shared around the world
 The best of cultures can be shared and understood on a
global scale
 There is more influx of information between two countries,
which do not have anything in common between them
 There is cultural intermingling and each other is trying to
know about the other’s cultural preferences and in the
process of doing so, we are actually coming across things
that we like and in the course of time, we adopt it

22.  A small number of private media companies decided what
information is to be shared and shape public opinion
through sensationalization (bias)
 Media and entertainment impact is westernizing other
cultures
 There are some experts who think that globalisation; along
with the positive aspects is also leading to the incursion of
negatives like communicable diseases and social
degeneration
 There has been an increase in the violence, particularly
against women.

23. 1. International Monetary Fund- IMF
2.World Bank- WB
3.World Trade Organization(WTO) / formerly the
GATT
4.Trans-national Corporations or Multi-national
Corporations
5. European Union –EU
6.United Nations – UN

24. Overview of IMF
• The IMF was created in 1944 for the purpose
of providing loans to mainly western
Europeans states that were facing balance of
payment (b.o.p) problems. It comprises of 188
member countries.
• Its overall mission is to oversee international
monetary system; ensure exchange rate
stability; to foster global monetary
cooperation

25. OVERVIEW OF WORLD
BANK
• The International Bank for Reconstruction and
Development or World Bank is a sister
organization to the IMF. It was established in
1944.
• The WB provides finance for projects to promote
development and in recent times the emphasis has
been on poverty reduction.

26. Policies of the WB
• Encouraging free market reform
policies
• Liberalization of trade and capital
markets

27. Overview of the World Trade
Organization(WTO)
 The WTO is an international organization that was established
in 1995 as a replacement for the General Agreement on Tariffs
and Trade (GATT).
 The WTO has 151 members, accounting for over 97% of world
trade and is the only global international organization
dealing with the rules of trade between nations
 Its objectives are: to liberalise world trade and create an open
global system; to supervise the settlement of commercial
conflicts.
 Decision making is by consensus. Each member has one vote.

28.  WTO treaties are said to show a bias toward
multinational corporations and wealthy nations.
 Small countries in the WTO do not have much
influence.
 Countries that are not members of WTO are
effectively under an embargo.
 The influential countries of the WTO focus on their
own commercial interests and the needs of
developing countries are perceived to be
insignificant.
 The WTO’s promotion of free trade may result in
uneployment and increased poverty.

29. Multi National Corporations
(MNC’S)
When a corporation that is registered in
more than one country or that has
operations in more than one country may
be attributed as MNC. Usually, it is a large
corporation which both produces and sells
goods or services in various countries.

30. CONT..
 They play an important role in globalisation.
 The first multinational business organization
was the Knights Templar, founded in 1120.After
that came the British East India Company in
1600 and then the Dutch East India Company,
founded March 20, 1602.

31. European Union (EU)
• Established in 1951 as the European Coal
and Steel Community by the six
founding members
• Today, the EU has 27 member states and
acts in a wide range of policy areas -
economic, social, regulatory and financial
where its actions are beneficial to the
member states.

32. MISSIONS OF EU
• Provide peace, prosperity and stability for its people,
• Overcome the divisions on the continent,
• Ensure that its people can live in safety,
• Promote balanced economic and social development,
• Meet the challenges of globalisation and preserve the
diversity of the people of Europe,
• Uphold the values that Europeans share, such as
sustainable development and a sound environment,
respect for human rights and the social market
economy.

33. United
Nations(UN)
• The United Nations (UN) is an inter
governmental organisation established on 24
October 1945 to promote international
cooperation.
• At its founding, the UN had 51 member
states; there are now 193.

34. Grant free access to their markets for goods
produced in poor countries,
Implementing debt relief program,
Grant more generous development
assistance,
Work with pharmaceutical companies and
other partners to develop an effective and
affordable vaccine against HIV,
Make special provision for the needs of Africa.

35. ADVANTAGES OF GLOBALISATION
o Developing international trade and companies
o Increased free trade between nations
o Increased liquidity of capital allowing investors
in developed nations to invest in developing
nations
o Corporations have greater flexibility to operate
across borders
o Greater ease and speed of transportation for
goods and people
o Increases in environmental protection in
developed nations

36. DISADVANTAGES OF GLOBALISATION
• Exploitation of Underdeveloped Countries.
• Greater risk of diseases being transported unintentionally
between nations.
• Spread of a materialistic lifestyle and attitude that sees
consumption as the path to prosperity.
• Increase in the chances of civil war within developing countries
and open war between developing countries as they vie for
resources.
• Increase in Unemployment.
• Widening of Rich-poor Gap.

37. CONT..
• Prisoners and child workers are used to work in inhumane
conditions. Safety standards are ignored to.
• Terrorists have access to sophisticated weapons enhancing
their ability to inflict damage. Terrorists use the Internet for
communicating among themselves.
• Companies have set up industries causing pollution in countries
with poor regulation of pollution
•
• Fast food chains like McDonalds and KFC are spreading in the
developing world. People are consuming more junk food from
these joints which has an adverse impact on their health.
• Bad aspects of foreign cultures are affecting the local
cultures through TV and the Internet.

38. Role government can play in making the
globalisation a success :
 Government should prepare such policies that must protect the
interests, not only of the rich and the powerful but of all the
people in the country.
 Government can ensure that labour laws are properly
implemented and the workers get their rights.
 Government can reserve some items exclusively for small scale
and local producers.
 If necessary, the government can use trade and investment
barriers like quota system, imports, duties etc.
 It can negotiate with the WTO for fairer rules.
 It can align with other developing countries with similar interests
to fight against the domination of developed countries in the
WTO..

39. THANK-YOU