The Global Economy and

Globalization Processes
Dr Kawal Gill
Associate Professor
Department of Commerce
SGGSCC
Pitam Pura
University of Delhi

What is Globalization?

Processes by which movements of

products, people, companies, money and
information grow in quantity and in
deepening ties across national borders
Interconnectedness is evident particularly
in finance and high-tech dimensions
Despite economic integration including
growing trade, national markets persist in
presenting differing cultural environments
which businesses must take into account

Internationalization vs.
Globalization

Internationalization processes: extensions of

economic activities across national borders;
growing quantitatively.
Globalization processes: both geographical
extension as in internationalization and the
qualitatively different functional integration of
internationally dispersed activities.

Different Facets of Globalisation

Globalisation of Markets: refers to managing of
historically distinct and separate national markets into a
huge global market.
Globalisation of Production: refers to the sourcing of
goods and services across the globe to take advantage
of national differences in the cost and quality of factors
of production.
Emergence of Global institutions: IMF and World Bank
in 1944, United Nations in 1945 and WTO in 1995.

Globalization Viewpoints
GLOBALIZATION VIEWPOINTS

Hyperglobalists

Transformationalists

Hyper globalists
An extreme view that believes in:
the emergence of a global
cosmopolitan corporate culture
the decline of nation states
the increasing power of TNCs

Transformationalists
View globalization as a complex, uneven
process
A multidimensional view: includes
economic processes alongside regional
and cultural issues

Elements of Globalization
Economic globalization

Political globalization

Cultural globalization

Economic Globalization
Globalization of the business corporation
Globalization of supply
Globalization of demand

Cultural Globalization
A process of cultural homogeneity of the
global economy. Cultural globalization is
characterized by:
Cultural homogenization: uniformity and
similarity in global products and processes
Cultural heterogeneity: local differences
Cultural hybridization: adaptation of the global
to local conditions, meaning reattribution and
re-contextualization

Political Globalization
The emergence and domination of global
and regional institutions and transgovernmental networks such as:
IMF
The World Bank
WTO
UNCTAD

Drivers of Globalization
Political
forces

Increasing
competition

Economic
forces

DRIVERS

Global
governance

Technological
developments

The Role of technological change

Microprocessor and Telecommunication
The Internet and the World Wide Web
Transportation Technology

The Changing Demographics of Global

Economy
The changing world output and world
trade picture
The changing FDI picture
The changing nature of Multinational
Enterprise
The Changing World Order

The pros and cons of globalization

Pros
Promotes economic growth
through FDI
Increases overall well-being
Offers consumer choice
Price competition benefits
consumers
Fosters technological
innovation
FDI provides employment
and skills training

Cons
FDI mainly benefits the
investing company and its
shareholders rather than
the host society
Environmental degradation
in host countries
Leads to global inequalities
between and within nations
TNCs become more
powerful than governments

Hidden Face of Globalization Part I

Hidden Face of Globalization Part II

Negative Effects of Globalization

Thanks
Any Questions?