GLOBALIZATION

Defining Globalization Acc to IMF- Globalisation is the growing interdependence of countries IMFworldwide 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. Globalization involves removing restrictions on foreign trade and foreign investment so as to leverage the benefits of comparative advantage in terms of capital, technology and skilled labour. Globalization of the economy means integrating the economy with the global economy. It has two main components Globalization of market Globalization of products.

 

FEATURES OF CURRENT GLOBALISATION

1.New Market  Growing global markets in services like banking, insurance, transportation, etc.  New financial markets like deregulated, globally linked working around the clock, with new instruments such as derivatives.  Deregulation of anti-trust laws and proliferation of mergers antiand acquisitions.  Global consumer markets with global brands.

2. New Actors  Multinational corporations integrating their production & marketing dominating food production.
   

WTOWTO-having a authority to enforce national government compliance with rules. An international criminal court system in the marking. A booming international network of NGO's. Regional blocks gaining importance

3. New Rules & Norms  Market economic policies spreading around the world with greater privatisation and liberalisation.  Wide spread adoption of democracy as the choice of political regime.  Growing awareness among the people around the world.  Consensus goals and action agenda for development.  Conventions and agreements on the global environment.  Multi-lateral agreements in trade, taking on such new Multiagendas as environmental and social conditions.  More binding on national governments than any previous agreements.  The multi-lateral agreement on investment under debate. multi-

4. NEW TOOLS OF COMMUNICATIONS  Internet and electronic communication.  Cell-phones Cell Fax-machines. Fax Faster and cheaper transport by air, sea and road.  Computer aided design

ESSENTIAL CONDITION FOR GLOBALISATION

(i) Business freedom, minimising the trade barriers. (ii) Facilities -benefits, facilitating factors infrastructure that motivate globalization. (iii) Government support -Tax policies, rules, regulations and laws. (iv) Resources Required for gaining an edge in the international market. (v) Competitiveness Country should have comparative advantages in one or the other way over the competitors on the basis of comparative advantage. (vi) Orientation - Companies should have tendency to be known in the global market.

STAGES OF GLOBALISATION

The first stage deals with the arm's length service which is essential for domestic company for moving into new market overseas. In second stage the company takes over all the activities on it's own. In third stage the domestic based co. begins to carry out it's own manufacturing marketing & sales in the key foreign markets. Here, the company moves to a full insider position in these markets, supported by a complete business system including R&D & engineering. The company moves toward a genuinely global mode of operations

FOREIGN MARKET ENTRY STRATEGIES

         

Licensing/Franchising. Contract Manufacturing Management Contracts (contract for specific event, hiring people from outside for managing the particular event in organisation). Assembly operations Fully owned manufacturing facilities. Joint venturing Counter trade Mergers & Acquisition Strategic alliance Third country location. location.

GLOBALISTION IN INDIA-OBSTACLES INDIA

          

Government policy and procedures. High cost. Poor infrastructure. Obsolescence. Resistance to change. Poor quality image. Supply problem. Small size. Lack of experience. Limited R&D and marketing research. Growing competition Trade barriers

FACTORS FAVOURING GLOBALISATION IN INDIA

        

Human resources. Wide base. Growing Entrepreneurship. Growing domestic market. Niche market. Expanding market. Transnationalisation of world economy. Economic liberalisation. Competition.

CONCLUSION
The intent of globalisation is efficiency improvement and market optimisation taking advantage of the opportunities of the global environment. environment. Therefore, in many cases, Indian companies have to globalise to survive and grow in the emerging competitive environment. environment. The limitations of national market, the diversity and unevenness of resource endowment of different nations, complexity of technological development, differences in the level of development and demand pattern, production efficiencies , cost etc are few factors that enforces the need for globalised operations. This is the reason because of which not only India operations. but also a number of developing nations which, in the past, were against globalisation have now opened their doors for globalisation. globalisation.