GLOBALIZATION

By: Ibrahim Mulla Sunay Khaire Shilpi Jajodia

DEFINITIONS

Globalization is the process of social, political, economic, cultural, and technological integration among countries around the world Globalization is nothing but the growing economic independence through increasing cross- border transaction in goods and services. Globalization enables a business to operate and plan to expand throughout the world. Entire globe is becoming a single market. In short, it is The shift towards a more integrated and interdependent world economy

ROOTS

When did globalization begin?

Ancient trade routes barter trade Standard weights and measures Mercantilism the highways of the sea Post WWII institutions of global governance Past 1980s Information & Communication Technologies (ICT), globalization defined

DRIVERS

What drives globalization?

Individual and social needs and aspirations Technological innovation Reduced technological and economic barriers to trade

What are its sustaining forces?

Greater policy liberalization Greater efficiency of business Greater market access Increased flows of goods, services, and people

Search for competitive advantage

Development of new technologies

Reduced barriers to trade

FEATURES

Globalization encompasses the following features:

Operating & planning to expand businesses throughout the world. Buying & selling goods and services from/to any country in the world. Establishing manufacturing & distribution facilities in any part of the world. Product planning & development are based on the market consideration of the entire world, Setting the mind and attitude to view the entire globe as single market. Erasing the differences between domestic & foreign market Sourcing of factors of production & inputs like raw materials, machinery, finance, technology ,human resources & managerial skills from the entire globe.

PROS & CONS

Economic, Cultural & Political Aspect

PROS ECONOMICAL ASPECTS

Employees of a transnational corporation may be well paid compared to other workers in the country.

A wide range of products are available at affordable prices due to free trade Free trade between nations is established countries can produce to its strengths and import the goods it needs without the threat of tariffs.

Increased investment in developing countries stimulates their economies.

Sharing of technological innovations is fast and fair

CONS ECONOMICAL ASPECTS

Jobs are being outsourced from developed countries to less developed countries resulting in higher unemployment. Transnational corporations may have fewer environmental regulations to follow and can pay lower wages they can shop around for best options Corporate headquarters are usually located in the USA or western Europe resulting in resentment in the accumulation of economic power Cultural identity is lost due to mass use of western consumer products and entertainment

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 Profits usually do not stay in developing countries they are returned to developed world

PROS CULTURAL ASPECTS

Globalizations 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 others cultural preferences and in the process of doing so, we are actually coming across things that we like and in the course of time adopt it.

CONS CULTURAL ASPECTS

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 globalization; along with the positive aspects is also leading to the incursion of negatives like communicable diseases and social degeneration.

PROS POLITICAL ASPECTS

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 democracy to spread globally

CON POLITICAL ASPECTS

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

PROS & CONS CAPITALIST, SOCIALIST & MIXED ECONOMY

United States of America China

India

CAPITALIST ECONOMY - U.S.A.

PROS

CONS

The main aspect to the global spread of capitalism is that of finance financial trading is now a global practice. The same products are being sold all around the world. Conversely, you can go anywhere in the world and buy the same things. Has led to global way of living, but it really has lead to the standardization of life. Unfettered capital flows give the U.S. access to foreign investment and keep interest rates low.

American companies have migrated most of their manufacturing jobs to foreign countries where it is cheaper to do business. Service & technical jobs are currently undergoing a large exodus to foreign labor. U.S. employees can lose their comparative advantage when companies build advanced factories in low-wage countries, making them as productive as those at home.

SOCIALIST ECONOMY - CHINA

PROS

CONS

Productivity grows more quickly when countries produce goods and services in which they have a comparative advantage. This has fasten the living standards of China.

Multinational corporations are accused of social injustice, unfair working conditions (including slave labor wages and poor living and working conditions).

Global competition and cheap imports keep a lid on prices, so inflation is less likely to derail economic growth. Resulting in an increasing GDP.
An open economy spurs innovation with fresh ideas from abroad. Export jobs often pay more than other jobs.

Lack of concern for the environment, mismanagement of natural resources, and ecological damage.
Multinational corporations which were previously restricted to commercial activities are increasingly influencing political decisions. Globalization has led to exploitation of labor. Prisoners and child workers are used to work in inhumane conditions

MIXED ECONOMY - INDIA

PROS
o

CONS

It has increased economic prosperity and opportunity of India. With globalization, there is a global market for companies to trade their products and a wider range of options for people, to choose from among the products of different nations. Has led India with higher degrees of political and economic freedom in the form of democracy.

Companies are as opening their counterparts in other countries. This results in transferring the quality of their product to other countries, thereby increasing the chances of depreciation in terms of quality. The threat that the corporate would rule the world is on high, as there is a lot of money invested by them. It is often argued that poor countries are exploited by the richer countries where the work force is taken advantage of and low wages are implemented.

Improved standard of living reduction in poverty by providing jobs (Outsourcing).

The focus is diverted and segregated among all the nations. No country remains the single power

CONCLUSION
Globalization is the LIFE LINE of World Scenario and

It could involve all these things....

Where......

Stock Markets are now accessible from anywhere in the world....

But also....

How far does trade help children like these...

So to conclude ....

Globalization

is the process where it is helping in growth some countries economy and halts some countries economies.

THANK YOU!!
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