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GLOBALIZATION OF BUSSINESS
The term globalization describes the increased mobility of goods, services, labour, technology and capital throughout the world.
"Globalization is a term for the horizontal and vertical integration of manufacturing and trade on an international level"
CHARACTERISTICS OF GLOBALIZATION
Planning expansion of their business throughout the
world. Treating domestic market & foreign market as one. Transactions are not restricted within a country. Entire globe as a single market. World wide operation. Global orientation in strategies.
Contract manufacturing
Management contract Joint venture Foreign direct investment
ADVANTAGES OF GLOBALIZATION
Free flow of capital
Free flow of technology Growth of industrialization
DISADVANTAGES OF GLOBALIZATION
Kills domestic business
Exploits human resources leads under employment
WTO
WORLD TRADE ORGANIZATION
ORIGIN
Established on 1st January 1995.
To over come problem of GATT. GATT is favor for developed countries.
Objectives of WTO:
Promote trade flows by encouraging nation to adopt
nondiscriminatory and predictable trade policies Raising standard of living and incomes, promoting full employment, expanding production and trade, and optimum utilization of worlds resources. introduce sustainable development a concept which envisages that development and environment can go together. Taking positive steps to ensure that developing countries, especially the least developed ones, secure a better share of growth in world trade. Establish procedures for resolving trade disputes among members
Function of WTO:
Acting as a watchdog of international trade, constantly
examining the trade regimes of individual members. Seeking to resolve trade disputes Overseeing national trade policies Cooperating with other international institutions involved in global economic policy making. Maintaining trade related database Acting as a management consultant for world trade. Technical assistance and training for developing countries.
EMERGING ISSUES
It seeks to eliminate tariffs to zero level by the year 2000 on the
rapidly growing $600 million world market in computer related product. Multilateral agreement on investment (MAI); the MAI aims to give MNCs the right to establish any business in any country without being discriminated against by virtue of being foreign MNCs. It would also give member state the right to settle any dispute arising out of compliance with the MAI at the WTO. Core labour standards; these provide that standardized international labour wages and working conditions must prevail. Trade and environment. Government procurement policies that should aim at weeding out corruption at governmental level.
interest of developed countries. WTO will not ensure open trade for goods produced by developing countries The worst fears expressed about the WTO agreement relate to the steep hike in prices of drugs and agriculture inputs.
3. CUSTOMS UNION: where, apart from elimination of all barriers to trade among themselves, the member countries follow a common policy in their trade with non-members. 4. Common Market: where the region becomes market for all factors of production including labour, service and capital. 5. Economic community: where the member countries follow common policies in respect of all economic matters.
operation.
Trade liberalization
Reducing the limitations on trade that countries around the world have erected over a number of years. It is the process where by a country opens up its markets to international trade i.e., reduces the taxes (known as the tariffs) & other limits (such as quotas) on goods coming in.